Love it or hate it, I don’t know a single guitarist who hasn’t purchased from Guitar Center at one time or another. But according to Bloomberg News, the age of eCommerce has cut into their sales deeply, which could see the once mighty music store facing some tough decisions in the near future. Guitar Center has accrued a massive amount of debt – $1.3 billion, to be exact – that has the companies’ investors up in arms.
What does this mean for Guitar Center?
Well, unlike some other news websites have reported, don’t expect to be reading about them in the guitar store obituaries. Their annual revenue is still around $2.1 billion, which doesn’t say much for their net income while they’re trying to balance their debt, but it does show that the music store still has potential.
They are still the largest music retailer in the US, so in spite of their bonds reaching a record low, the thought of them closing the doors on all 269 locations and putting 10,000 employees out of work is pretty unfathomable.
The likely outcome of all this is mostly action behind the scenes – refinancing and restructuring, buying back their crappy bonds, etc., while the customer-facing front end of the guitar store won’t change much at all. Guitar Center has been attempting to branch out recently though, particularly through offering in-store music lessons.
The Music Store Everyone Loves to Hate
Guitar Center’s critics have cited (among many other qualms) the company’s scale and selection puts local music stores out of business, creating a monopoly on guitar and instrument sales wherever they open their doors. But with news like this that shows the company’s downward spiral being a result of their inability to compete with Amazon and other major eCommerce businesses, one has to wonder if brick-and-mortar music stores are all going the way of the dodo – regardless of size.
The eCommerce business model has dropped a sledgehammer on virtually every retailer that relies on physical locations to make sales, and Guitar Center had every opportunity to take advantage of this rising trend during the early 00’s – they have the stock and the resources, but for some reason they did not adapt quick enough – or, just as likely, Amazon and company were just too far ahead of the curve to catch up with.
This is not spelling out a grim fate for music stores though, but the opposite. Tons of other guitar retailers have sprung up in the decades that Guitar Center were sitting on their thumbs and praying Amazon wouldn’t do the inevitable. Online music stores like Cream City Music, The Chicago Music Exchange, and Rainbow Guitars continue to thrive (and many others that can be found here). They’ve fully embraced eCommerce, and focused their efforts on creating online communities, social media buzz, and direct customer service – as well as providing instruments from smaller companies and boutique guitar makers that you’d never find in Sam Ash or Guitar Center due to their exclusive arrangements with bigger brand guitar companies.
Guitar Center will not die any time soon, sorry guys.
As a guitarist who doesn’t dislike Guitar Center, I still find myself unable to shed any tears for the company. More competition only ever means the customers will have more to choose from. But I still have some fond memories of heading out to guitar center with a group of friends and spending the afternoon having a good time playing all of their instruments. And I like the fact that they bought my Jackson DKMG from me at the price I chose, rather than trying their hardest to haggle me down like every music store I’ve sold anything to – they did the math and knew I was giving them a fair price.
Anyway, for the time being, there’s no reason to lament. Guitar Center is not going anywhere, they’ve been in debt for a very long time, it’s nothing new. Right now they’re hitting a new low, that much is true. But wondering if they’ll be shutting down is not necessary at all, the most we’ll see is some new ventures and services being offered to try to drum up business.
And for anyone wanting to kick Guitar Center while it’s down, I recommend checking out the Luthier’s Directory and getting yourself a nice custom made guitar to contribute to the ‘other side’ of instrument retail. Or maybe even building your own.