Guitar center is going under!

[Sunset Shalom]

I guess they are in major debt and likely won't survive the next year, though apparently they plan to leave a Hollywood and 1 other of their best stores open. All the other stores will be selling off their stock.

Can't say I am too sad to see them go, maybe now we will see more local music stores again. It also should be a good chance to snag some great sales depending on how they try and liquidate.

 

[bholder]

...any day now for about the last 10 years... ...will believe it when it happens.

 

[Sunset Shalom]

...any day now for about the last 10 years... ...will believe it when it happens.

Well according to that video it has already started:

"[CORRECTION: downgrade was not on the 5th. It was last week. Also, according to Moody's website, they downgraded GC to Caa1 from B3, so that's even worse than reported.]"

They may be going bankrupt before long.

 

[Gorn]

Bankruptcy ≠ going under.

 

[Sunset Shalom]

Bankruptcy ≠ going under.

Well they aren't bankrupt yet either but this seems like the beginning of the end.

The last time they were in this boat they were bought out but now the new owners have gone into serious debt. So I doubt they will just be bought out again.

One thing people in the comments of that video pointed out is avoid GC gift cards as who knows when they might not be able to accept them, and if you have any you should cash them ASAP.

 

[micguy]

I like their 30 day return policy. It's a great policy - so long as when I return an item, the doors aren't locked.

 

[Sunset Shalom]

I like their 30 day return policy. It's a great policy - so long as when I return an item, the doors aren't locked.

They have a decent warranty too I believe. I bought my Carvin BR510 from them even though Carvin had them for sale on Ebay, because the carvin warranty didn't seem as nice. Though I have had 0 issues anyways.

I kind of hope GC dies off and we see more local music shops pop back up, I saw some jokes about this being karma for all the mom and pop shops GC ran out of business.

 

[micguy]

My mind wonders if Musican's Friend is structured so that, if GC goes, it survives. I like MF better than GC.

 

[jmattbassplaya]

My mind wonders if Musican's Friend is structured so that, if GC goes, it survives. I like MF better than GC.

I feel like it is since they have far less overhead expenses to consider. That being said, I really have no clue.

 

[fretter]

I better invest in gold plated coins instead.

 

[Killed_by_Death]

I like their 30 day return policy.

It's 45 days now & even includes pre-owned gear. It has always been 45 days, but a while back they extended the 30 days on pre-owned stuff to the same 45 days.

 

[Gorn]

It's 45 days now & even includes pre-owned gear. It has always been 45 days, but a while back they extended the 30 days on pre-owned stuff to the same 45 days.

But not for what they consider vintage, unless that changed too. I haven't bought from them in a while and didn't know about the 45 day thing.

 

[Killed_by_Death]

There are special considerations, also for clearance items.
In some cases they'll mark Non-Returnable right on the receipt for clearance items, but sometimes not. I have no idea how they draw that line.

 

[two fingers]

Mom n pop stores carrying gear you can afford at good prices will not come back if GC goes under. Period.

Two good friends of mine own a mom n pop. They started out carrying nicer gear and providing great customer service. These days, live music gear is almost an annoyance to them. The only things that sell are entry level pieces and they only sell them to people who have money burning a hole in their pocket and can't wait 48 hours for an internet order to arrive for 15% less than they have to charge. Their profits come from church, school and commercial PA installs as well as band and orchestra rentals and maintenance contracts. They make virtually nothing on the kinds of gear we here at TB frequently use. They honestly wish they could drop all of that stuff but it creates foot traffic. Guy comes in for a new microphone for his church and you sell him a new PA install. Guy comes in for guitar strings and you sell his band a new compact PA system. That's the only thing basses and guitars and amps are good for in their world. Starter packs this time of year makes them about $12 a pop. Hardly worth stocking the 30 or 40 they will stock. But they do it hoping this young guitar players come back and buy a PA in 5 years or their mother signs their sister up for a flute rental.

The nearest GC is 75 miles away. What kills the market for them now is the interwebz.

I'm not beating up the interwebz or cryijng for mom n pop stores either. I like the free market just the way it is. Some survive and some don't. But their competing for our business always works out for us in the long run. It wouldn't hurt my feelings at all to see Fender Pro Player and Rumble stuff in Sam's Club for a hundy less than GC sold it for. D'addario XL Nickels and Chromes for $9.95 a set on the shelf at Wal-Mart? Sign me up!

I don't need a dear old friend with a smile and a cup of coffee waiting on me when I go to buy a bag of orange picks and a Fast Fret. I don't have time for the coffee anyway.

 

[ICM]

They've been going under for years. I just went to my local one recently, it's a hollow shell of what it used to be (and it was never great). I also heard that employees' commission was cut so they don't have much motivation any more, I don't know if there's any truth to that statement, but hey gotta love GC right?

 

[Aqualung60]

Another week, another "Guitar Center is going out of business" post.

 

[TheMaynorD]

The only benefit to a guitar center or any brick and mortar music store now that sweetwater, musician's friend, etc. are available is to actually get your hands on an instrument or piece of equipment and play it before you buy it or for emergency issues like strings the day before a show. And for the bedroom warriors to go and shred the same 5 rock songs on the most expensive guitar then leave without buying anything. Don't get me wrong, I have definitely played on basses I have no intention of buying, but I usually try and pick up some strings or something and not just sit there for 2 hours on that 1967 P bass only to noodle.

 

[Sunset Shalom]

Another week, another "Guitar Center is going out of business" post.

Maybe I just need to check around more but I can't say I had ever heard about them going under before. Sounds like they will be going the way of Blockbuster though

 

[PillO]

For GC right now, the bond rating is meaningless. It does not change the interest rate (coupon) that they have to pay. It does not change maturity terms or principle. It likely makes no change in the trading price of the bonds either; If the bonds were ever investment grade, then the losses were incurred when they dropped below investment grade. Although rating agencies make distinctions between grades of junk debt, it makes little practical difference.

Rating agencies do not declare companies to be in default; only the bond holder can do that and it requires a trip to court to have contractual obligations enforced. So, the individual narrating knows little about bonds and certainly won't be someone from whom I will take investment advice.

So, if GC is pushed into default, that is not the end of GC. It just means that the bond holders take control of the company and work out the best way to make themselves whole. In fact, there is a strategy to be played in this. Bonds heading toward default often trade at a fraction of the face value. By buying a large number of bonds, if the company works out its troubles, then you make a big capital gain. If not, you can get hold of a viable business at a very reasonable price.

 

[hsp-sandiego]

Guitar Center owns Music & Arts, LMI, Giardinelli, Musician.com, Private Reserve Guitars, Woodwind and Brasswind, Music 123, LiveWire cables... I am sure there is a default strategy as opposed to "closing their doors." They should consider "demo centers" and sell mostly online as their stores are typically a substantial Sq. Ft. space.