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Henry J. puts some blame on bricks and mortar guitar shops for problems at Gibson.
In my many years of working in music retail, I have never personally seen a more difficult and arrogant company. Gibson imo has had zero regard for medium size and under retail business for decades.
Gibson Boss Blames Guitar Stores for Financial Woes
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02-28-2018 02:56 PM
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Henry J. is right! I'm eagerly looking forward to the future, when I can walk into Guitar Center, sit in the nice comfortable chairs and try out the vast assortment of L5s, Super400s and all the other high end archtops they keep within everyone's reach.
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I did not see much in that article that I would disagree with, other than having high end models being subjected to buckle rash.
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Seems to me he makes some good points.
Let's be honest. The mfg./dealer relationship is always going to be fraught with conflict.
What does the mfg. want ?: To maximize sales to dealers....how to do this?....Mfg gets his price, and he wants the dealer to sell tons of them for one penny more. More units sold. Good for mfg.---not so good for dealers.
What does the dealer want ?: Unlimited supply of all he can sell, and make decent profit....he wants low price from mfg., and ability to price in way that maximizes profit.
And that's just mfg. v. dealer....throw in question of competing dealers in next town, etc., and then financing issues...
It can all get confrontational and conflict-ridden very quickly....and there are very real issues that can't be wished away.
(In one law firm I worked at, we represented a computer reseller company run by an old guy who didn't know jack sh*t about computers, technology, or anything else...but somehow he had this company, at least for a while. We then figured out, he was in "the box business"....as in "how many boxes can my dealers blow out....". The funniest thing was when an audit uncovered $46K of lingerie expenses to his mistress at Victoria's Secret....we had to tell him about making "full and fair disclosure" and "transparency" in financial reporting. Anyway, the responsible partner turned out to be the biggest sucker of all....and accepted paper (unregistered stock) in lieu of payment of $200K or so of legal fees....of course the company tanked...the senior partners were not amused, and the "responsible" partner was kicked out.)
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When I read Henry's piece my first reaction was, "He's not much wrong." On reflection I'm less sure.
Henry's luxury-vehicle shopping experience makes some sense when you're dropping thousands on a Magenta Custom-Bench Extraordinarily-Historical Leo Pool or a Super 700. Henry has done a good job moving as much of his line as possible away from the cheapo plank guitar and toward the M C-B E-H LP.
The flaw in this viewpoint -- and it's a limited perspective as noted below -- is that many people, including Your Humble Correspondent, will never buy one of those brand-new in their life. The luxury-auto-sales model that Henry seeks is simply out of touch with what 97% of people stepping into a guitar store at any given moment are there for.
But more fundamentally, Henry is purposely overlooking this important fact about his current situation: Gibson Brands, Inc. is not in trouble because of guitar sales. Guitars is the most profitable arm of Gibson Brands, Inc. Gibson Brands, Inc., is in trouble because it's not selling enough Baldwin pianos, Onkyo stereos, Cerwin-Vega speakers, Cakewalk software, TEAC gadgets etc.
Fender has done a ton of 'lifestyle branding.' There are Fender/Harley-Davidson guitars, Fender bluetooth speakers etc. ad nauseum. But Fender hasn't bet their own farm on any of that stuff. Gibson Brands, Inc., at Henry's express direction, has bet the farm. I bet that Henry lies awake reconsidering that.
Back to work, you!
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Well I agree with others that on the surface what Henry J says makes sense, but Gibson behavior belies that. Dave's Guitars had until recently one of the largest inventories of Gibsons in the world. Dave's was exactly the place Henry J describes--comfortable, knowledgeable staff, no pressure--I should know cause I've spent many hours there playing guitars, 99% of which I did not buy. I also know Dave on a casual level, follow him on Facebook, and know he was flummoxed by Gibson's decision. (He posted one of the links below online.)
The Gibson news is coming fast and furious, and none of it is good for Gibson...
Chinese Investment Group Considering a 'Fire-Sale Acquisition' of Gibson Guitar
Gibson guitars could be on the brink of bankruptcy | Woodworking Network
Gibson lays off staff in Nashville custom shop | Nashville Post
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Man.. I hate seeing skilled workers out of a job.
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The other day, we had a contractor over to take a look at our new-construction condo. We were complaining about drafts. He asked us what kind of windows they'd put in, and we looked and told him. He laughed. He told us that once upon a time, that company made really good windows, and now they're largely crap. What happened? In a nutshell, he said, Home Depot happened.
I can't help but see a parallel here.
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I believe his strategy here is referred to as "coming out slugging . . ." or alternatively, obsfucation and misdirection.
He's got a mountain of debt to service, but it's because guitar shops don't have couches. Hmmmm. Spurious logic.
Guitar shops are intimidating, but mostly because playing guitar is intimidating too. Despite the "humble pie" being dished out in another thread, the music world is full of Egos. Jam packed with 'em. Sometimes those Egos hang out in guitar shops.
Pecking order, chops, good enough to hang, pro level, etc. It is what it is.
But the local bricks-n-mortar shops I frequent are struggling and trying very hard to do their best. I buy most of my stuff there -- imperfect though they may be. And I've never heard anything but bad about how Gibson is to deal with as a dealer. Maybe Gibson might learn to be a bit more supportive of their retail network?
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Some good points by Henry. However, he would need to provide every single store with free floor models that are not for sale but just for test playing. So whenever a customer has made a choice and decides to buy one, he receives an unopened box. And if something is wrong with the guitar, the customer can send it back directly to Henry, not the store. Then we would see some substantial improvement of Gibsons QC.
Damn, I just woke up, it was all a dream.
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The problem is that the above statement today applies more to Mr Slaman's guitars than Henry's.INHERENT in every Gibson instrument is the spirit of the Master Craftsman. In every instrument there is no compromise with less than absolute perfection - either in materials or workmanship.
The outward beauty of the instruments created by the Master Craftsman is but a symbol of the greater beauty within - revealed to you gloriously through ownership.
To the finest materials obtainable from the four corners of the world, the Craftsman adds the ingredients, genius and skill, developed from a lifetime of devotion to the highest ideals ... Each Gibson created is more than a perfect instrument- it possesses a personality as marked and colorful as that of a human being.
The Master Craftsman's skill cannot be duplicated, for true craftsmanship comes only from genius mellowed by long years of experience. To him, the Craftsman, the greatest reward comes, not in terms of gold, but in the creation of a musical instrument with a soul. Introduction--Gibson 1931 Catalog.
Gibson need to offer fewer models with no low-end garbage. Junk the "Custom Shop" sales pitch. Offer only the best or nothing at all.
LP Standard Sunburst
LP Custom Black
SG Red
Firebird
Korina V
Korina Destroyer
ES335 Blonde Dot
ES335 Red Dot
BBKing
ES175 Sunburst
L5 Sunburst
400 Sunburst
Johnny Smith Blonde
And limited runs of stuff to keep interest up.
Etc...
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The Elm Hill Pike lay offs is the Crimson Custom Shop location. Henry laid off his best builders. The guys building L5's.
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My understanding is that only 15 out of 115 were laid off. If Gibson is no longer building spec guitars from the Custom shop, it is probably prudent to trim that work force. Maybe the 15 let go were some of the the guys building Les Pauls and 336's?
Originally Posted by vinnyv1k
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Some years ago (5? 6?) I was in a large Authorized Dealership trying to order an ES-137 Custom. The sales rep I talked to related to me that the cost of doing business with G at that time was a six-figure buy of guitars, 95% of which were LPs with baked maple fret boards (which, BTW, I'm cool with, ditto Richlite). It seems to me that perhaps the B&M stores should have some say in what they are being asked to sell. "One size fits all" assumes a non-existent identity in market profiles. "The customer is always right" used to be a thing when I was working retail. I guess that's gone. Originally Posted by Longways to Go
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I think there is frequently a pecking order in dealerships....big players who sell a lot...may get more choice, sometimes special models available in just those stores. It's a struggle between who has more perceived market clout.
Dealer reps. may be pushing the higher-margined stuff...or being asked to push stuff that is overstocked.
It's like the cartoon with the 3 fishes. The biggest fish says "the world is a very fine place", the small fish says "the world is a very dangerous place", and the medium fish says "the world is sometimes fine, and sometimes dangerous."
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Ummm Dave's has couches... Originally Posted by Longways to Go
(My lovely daughter in the pic, btw...)
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That's exactly right. My high school buddy who has a shop in Chattanooga negotiated with Gibson for over a year to carry (again) their products. He was told it would take a $1 million buy-in. He did work it out to sell Gibsons for awhile, but then that deal soured and eventually he moved toward selling boutique customized guitars. Originally Posted by citizenk74
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No those are made at the Nashville USA custom shop. Elm Hill is jazz boxes only. There are 3 custom shops. Originally Posted by Stringswinger
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Sounds like Gibson and Heritage are both getting out of the "jazz box" business. I am sure glad that I have 10 of them. With all the boutique luthiers (some of whom charge less for their guitars than a new Gibson example would cost), the Asian made examples still being made and all of the used American made examples already out there, I do not foresee a shortage anytime soon. But if there is, I have 10 and that is 9 more than I actually need. Originally Posted by vinnyv1k
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The article does not fit the headline. Typical of the press. They exaggerate in order to lure the reader. Online click bait.
Nowhere did he blame stores for his financial woes, at least not entirely. He DID point out at that stores haven't recovered from 2008, and that certainly hurts him. That stores haven't recovered from 2008 is either correct or incorrect. Who's saying that it's incorrect?
And we all know who the store in question is, don't we?
- Yes, they are in so-so parts of town.
- No they are not attractive in any way.
- No they are not welcoming or comfortable.
- Yes they have plenty of expensive guitars all over the walls, and yes you can play them - you just don't want to.
- Yes you want to exit as soon as possible from these homely stores.
- Some of their employees are great people you want to do business with, many are not
- Yes, NTB (tire stores) are nicer inside
What he says about brick and mortar stores is also true. I spoke with someone at Nieman Marcus recently who told me that they were looking to a day soon when MOST of their business would be online, from their website. I was surprised. For expensive clothes? Makes no sense to me unless you are buying an iteration of something you already know, like a certain shirt or something. Maybe a tie, socks, gloves. OK, some stuff. The internet is a very, very disruptive technology.
I know of some guitar stores that are comfortable and welcoming, and sell expensive stuff, one in particular. I don't know if they break even or make money, or if the wealthy owner is simply having a fun hobby.
Retail is tough, guitar sales are slowing, labor is expensive, real estate is expensive. I have no easy answers. Perhaps Gibson should open boutiques in big markets and operate it's own website to round out sales and re-define/reinforce the brand and customer experience.
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They have never been within "everyone's" reach. There's no reason that something with all those highly skilled labor hours, special manufacturing processes, and fine materials should be. Originally Posted by Ren
On the other hand "within one's reach" is relative to one's perceived value. I've paid for all of my guitars long ago but used credit on many/most of them.
Wes was far from rich, but went for broke and bought that L5. He highly valued it, so stretched for it. Not "everyone" will do that.
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Wow. This whole thing is surreal to me.
Gibson and Heritage out of the Archtop business. Henry is blaming the music stores for his companies demise. It’s like it’s all a bad dream.
It’s one of those things I never thought would happen. Right up there with no more baseball. And it just happened so quickly. It’s sad..
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Of course I agree, I was being sarcastic. A few years ago, when Gibson was making small batches of L5s and other high end archtops, they were mostly sold by the big on-line dealers (Wildwood, Rainbow, Dave’s, TMZ). You couldn’t just saunter into your local Guitar Center and check one out. You had to buy online and hope you got a good one (I know, I did).
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Wait, what happened with baseball? Originally Posted by Max405
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Um, that's a Fender couch. Just sayin' Originally Posted by Doctor Jeff
Ummm Dave's has couches...
(My lovely daughter in the pic, btw...)
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