Guitar stores, yeah that's the problem

[skiboyny]

Since the market has changed that's not possible

Or possibly staying in the same place, quietly doing what you've been doing for many years, and staying in the same place.

[Hammertone]

Since the market has changed that's not possible

Tell that to the many successful small luthiers who quietly do what they've been doing for many years, and stay in the same place. It's very possible. So long as they are able to cover cost increases due to inflation, thay do just fine for themselves. Some do more than fine for themselves.

[Cunamara]

I never assume.

And I am amused that a professional musician attacks me on the topic of macro and micro economic judgment.

What attack? Disagreement is not an attack.

[Jazzstdnt]

Why do you feel attacked?

I don't feel. I think.

And don't play dumb and try the "aw shucks" routine with me. You're "who me?" act now doesn't diminish your snarky "amusement" about what you assumed I assumed.

[skiboyny]

Just not a fair or realistic comparison. Gibson is an established giant guitar manufacture. They churn out guitars this is what made them what they are. Those small luthiers have a name that the majority of guitar players wouldn't recognize. They could scale back, but businesses just don't do that. We look at Gibson as guitars, the reality is, it's not about guitars at all. It's about money and the folks that own it are far past the love of guitars. The love of money on the other hand....

Tell that to the many successful small luthiers who quietly do what they've been doing for many years, and stay in the same place. It's very possible. So long as they are able to cover cost increases due to inflation, thay do just fine for themselves. Some do more than fine for themselves.

[Jazzstdnt]

Is that a true statement of fact though? I’m merely repeating something from a video. It’s quite possible it’s bollocks. I haven’t done any research on the matter, so mostly it’s just riffing.

Some people seem a bit more earnest in their positions.

That Gibson have been trying to reposition the brand for sometime it probably has something to do with a general decline in guitar sales globally. Strategically it makes sense to do so.

However it seems to have done this in quite a stupid way, that’s quite fun to laugh at.

The fact that the company owns so many other brands both in the guitar world and without gets overlooked in these sorts of discussion. It’s not ‘Gibson made duff guitars now they face bankruptcy’, more like ‘Gibson made poor business decisions generally.’

As a result I find Henry Js attempt to blame guitar retail completely risible. This to me smacks of hubris.

If anyone can counteract this view, you are welcome to have a pop possibly using some actual facts, which I haven’t included myself.

Possibly I am wrong and it is the fault of guitar retail?

What? Yes they diversified, and no it didn't work. Do you have ANY concept of how many other companies, states, and even whole economies do the very same when their prospects are under threat from some kind of disruption? It is standard.

It is very interesting to note that you find it funny that Gibson is struggling. Why would that be? Do you always take pleasure in seeing businesses fail, or is it something about Gibson in particular? Most curious indeed.

And Henry didn't "blame retail" for all of his woes. Only that linked articles headline and the Gibson bashing thread herein says that. He certainly pointed it out and held them accountable though. Why shouldn't he? Do you think he doesn't know the numbers that he ships? Do you think that you have the numbers and he's mis-informed? It's fact. Would you prefer that he blew sunshine and rainbows at everyone?

You want hypocrisy? I'll show you hypocrisy.

On this very site sometime back, people spent some considerable time ragging on none other than the good old Guitar Center. Complaining that it knocked out the little guy, complaining about its staff and service, falsely complaining that Mitt Romney bought it and was simultaneously responsible for (1) all of the above - plus (2) the ruination of the goodness of GC (whatever that was). And last but not least - folks took great delight in GC's struggles and prospects for bankruptcy.

Yet fast forward to today and Henry J. points out that the numbers through retailers (and GC is his biggest mover) have slid, and all of a sudden - he couldn't be more wrong! My what convenient amnesia some people have.

Now some may find all of that funny to watch. Me? I think it's just pathetic chicken$h!t behavior.

[christianm77]

I think you are more emotionally invested in this then me dude, I'll leave you to it.

[ptchristopher3]

Or possibly staying in the same place, quietly doing what you've been doing for many years, and staying in the same place.

Hiya Hammer.

Of course that works for many businesses, arguably most businesses - depending on how you want to define staying in the same place.

But best to consider “wage or salary” as compensation for work, and “profit” as the compensation for money one puts at risk.

Best to consider it that way because that is what it actually is.

One can have a very large income, yet no actual “profit”. Some dentists come to mind here.

Once you have shareholders or bond holders, you bear some burden to provide a return on the money put at risk. And your return needs to at least seem to compete with the general returns available elsewhere in an economy. Otherwise your investors go elsewhere.

This all requires “growth”, even when it sounds absolutely asinine to promise eternal growth.

**********************

But,...

As a self-owned small business the money you put at risk (rent, tools, materials, employees, etc.) may only secure you the ability to generate a salary for yourself. There may be no “return” on this investment - thus no “profit”. Yet the business can be a raging success at providing the salary opportunity.

In such a case, there is no need to compete for investors with other investment possibilities. The proprietor sees a huge benefit in provinding the salary opportunity but no actual “profit”.

It works or course. There is not the compelling need for eternal “growth” to keep investors seeing a profit on the capital they put at risk.

So your small business luthier, can indeed have a great and very rewarding life and rewarding salary, without ever having any actual “profit” on the at-risk capital. Some day he drops dead and the business is worth the depreciated value of tools and materials only. It never generated a profit, yet was a huge success.

It happens in many types of businesses.

It works. It is the model for a staggering number of busineses in the world.

No idea why it is a mystery to so many who seemingly know only the buzz words.

Go figure.

[Bach5G]

Um, that's a Fender couch. Just sayin'

. And a very cool Fender table!

[rio]

What? Yes they diversified, and no it didn't work. Do you have ANY concept of how many other companies, states, and even whole economies do the very same when their prospects are under threat from some kind of disruption? It is standard.

It is very interesting to note that you find it funny that Gibson is struggling. Why would that be? Do you always take pleasure in seeing businesses fail, or is it something about Gibson in particular? Most curious indeed.

And Henry didn't "blame retail" for all of his woes. Only that linked articles headline and the Gibson bashing thread herein says that. He certainly pointed it out and held them accountable though. Why shouldn't he? Do you think he doesn't know the numbers that he ships? Do you think that you have the numbers and he's mis-informed? It's fact. Would you prefer that he blew sunshine and rainbows at everyone?

You want hypocrisy? I'll show you hypocrisy.

On this very site sometime back, people spent some considerable time ragging on none other than the good old Guitar Center. Complaining that it knocked out the little guy, complaining about its staff and service, falsely complaining that Mitt Romney bought it and was simultaneously responsible for (1) all of the above - plus (2) the ruination of the goodness of GC (whatever that was). And last but not least - folks took great delight in GC's struggles and prospects for bankruptcy.

Yet fast forward to today and Henry J. points out that the numbers through retailers (and GC is his biggest mover) have slid, and all of a sudden - he couldn't be more wrong! My what convenient amnesia some people have.

Now some may find all of that funny to watch. Me? I think it's just pathetic chicken$h!t behavior.

Have you seen the Les Paul speakers they are charging so much for that no one will buy? Come on, that is funny enough that it could be an April Fool’s Day joke but they seriously did it. Personally I would not prefer sunshine and rainbows but some honest admittance that he messed up and so did whoever is making these decisions to try to make Gibson a “lifestyle” brand. They bought more companies when they were already deep in debt and they knew 2018 was coming soon and profits plummeted. Guitar Stores didn’t do that. They might have contributed as to less people playing and buying guitars but a lack of couches in guitar stores is an insulting straw man when a large part of the accountability here is on him and whoever made these decisions.


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[Hammertone]

Of course that works for many businesses...wage or salary...compensation...“profit”...risk...shar eholders or bond holders...return on the money put at risk...compete with ... returns available elsewhere...requires “growth” ... sounds absolutely asinine to promise eternal growth.
...self-owned small business ...generate a salary..may be no “return” ...raging success ...no need to compete for investors ...not the compelling need for eternal “growth” ...model for a staggering number of busineses...No idea why it is a mystery to so many...

I suspect that Rickenbacker is a good example of a successful company that quietly does what it has been doing for many years, and stays in the same place.

[LtKojak]

On this very site sometime back, people spent some considerable time ragging on none other than the good old Guitar Center. Complaining that it knocked out the little guy, complaining about its staff and service, falsely complaining that Mitt Romney bought it and was simultaneously responsible for (1) all of the above - plus (2) the ruination of the goodness of GC (whatever that was). And last but not least - folks took great delight in GC's struggles and prospects for bankruptcy.

Guitar Center Problems

This is the thread you cited. If you care to "refresh your memory", you'll see by yourself that the accusation points you've made are either false or simply wrong. Reading/comprehension skills anyone?

Or, after another asessment, Dunning-Kruger effect anyone?

Dunning–Kruger effect - Wikipedia

[LtKojak]

Gibson a “lifestyle” brand.

This is Henry's basic "winning" concept. His "brainchild". His "legacy".

It had FAIL written all over since day one, but as it happens most of the time, nobody at the board of directors had the guts to confront him and tell what a loser idea it really was. Firebird X? Les Paul Monitors? Hi-speed network connection? 40 Million R&D costs for the robot tuners? And those are just the fails I remember from the top of my head. Feel free to cite others.

Basically, Henry thought about himself to be the re-encarnation of King Midas. Or God himself! Difficult to tell, really.

And the coward enablers inside the Gibson Co. allowed it to happen, as they wouldn't the ones with the responsability to pick up the tab and/or the pieces.

Also, the failing of the Guitar Center group, (including Music123 and Musician Friends) to timely honor the payments for the inventory they were forced to buy by contract with their suppliers didn't help either.

Anyway, this situation's been on the public eye from at least five years, most probably longer for the ones "in the know". Why it comes as such a surprise to some fine people here?

I just don't get it.

[ThatRhythmMan]

What about this practice of some online stores? The Gibson website clearly shows the MSRP on one of these monitors as $799.

[Mark 63]

I suspect that Rickenbacker is a good example of a successful company that quietly does what it has been doing for many years, and stays in the same place.

John Hall has been roundly criticized over the past decade for his conservative, no-debt, sustainable approach to his legacy business. But Rickenbacker may very well be a model for what a successful guitar manufacturer will look like.

[Jabberwocky]

Ha! I know that trick. Gibson dropped MSRP sometime in 2015. $799 was the MAP. Using the old formula, dividing by 0.60 yields would-have-been MSRP of $1331.67. MAP was 60% of MSRP. And street was between 10% and 25% of MAP. Most got about 15% to 20% of MAP.

[Thumpalumpacus]

The market is dwindling, Gibson's QC issues mean that there is less bang for buck, they've restricted themselves to larger stores which limits market penetration ... but in the end, HJ's insistence on fixing what isn't broken has a role to play as well. Brass nuts and zero frets weren't ever going to be successful with the traditionalists which comprise Gibson's target market. Autotuners? Perhaps, depending on how many GINOs are buying. Pare your product line to core models, and then build them to the fine standard your pricetag implies.

Perceived value is great ... until reality intrudes. If I lay out six large for a guitar, there had better be no binding bleed, orange peel, mis-set necks and other obvious QC issues. Period.

[Thumpalumpacus]

Sure, and IF Gibson's guitar business was/is turning a healthy profit, there would be no need to diversify. So why did they?

Might they not want to grow as a company? It's not unusual for companies to desire growth in bottom line, market share, or other metrics. Perhaps HJ and Dave looked at trends in music and realized that electric guitars are a shrinking market?

I can think of several reasons to diversify that don't impugn current profitability. I manage gas stations for a living. Electric vehicles are on the way in, and that means in my line of work -- even though we're turning good profits now -- that we must prepare for the changes that are on the way. I'd question some of the diversification decisions that Gibson has taken -- especially the debt-leveraging that has put them where they are today -- but given the relative decline of guitar-presence in modern music, looking to broaden your company's market seems smart.

[Thumpalumpacus]

Bondholders holding almost 70% of Gibson's outstanding debt are making a change of leadership and ownership stake a condition of any rescue package.

A group of bondholders advised by PJT Partners Inc. is pushing for a restructuring that would hand them ownership of the guitar maker and let them install new leadership, according to people with knowledge of the plans. The holders don’t expect Gibson’s earnings will be strong enough to attract new money for a refinancing to head off a default looming later this year, and creditors are reluctant to invest more funds while Juszkiewicz is still in charge, the people said. They asked not to be identified because the plans remain private.

Gibson Creditors Want New CEO Before Rescue Deal - Bloomberg