# Guitar Center bankruptcy looms



## JohnG (Nov 15, 2020)

Appears that it's a financing issue and the stores will continue to operate.

https://www.yahoo.com/finance/news/guitar-center-prep-bankruptcy-creditor-172419244.html








Guitar Center Expects to File for Bankruptcy After Debt Plan


Guitar Center Inc., the largest musical instrument retailer in the U.S., said it expected to file for bankruptcy after reaching an agreement to restructure its debt.




www.bloomberg.com


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## JonS (Nov 15, 2020)

JohnG said:


> Appears that it's a financing issue and the stores will continue to operate.
> 
> https://www.yahoo.com/finance/news/guitar-center-prep-bankruptcy-creditor-172419244.html
> 
> ...


This has been a long time in the making, John. It's amazing how the music dealers I know are doing more business than ever during the pandemic yet big box stores like Guitar Center and Sam Ash are struggling.


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## Nate Johnson (Nov 15, 2020)

Well, if Sears couldn’t hack it....

how many times can you ‘restructure’ almost a BILLION dollars of debt?

Yeesh. I wonder if we’ll see the demise of the big box stores altogether in my lifetime.


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## storyteller (Nov 15, 2020)

To be able to keep vendor contracts and receive the discounts required to sell items at the lowest prices, many vendors used to require the stores to buy new stock at a rate that was unsustainable. I imagine that’s a big part of it... at least that is how they used to be ages ago. It was basically a pyramid scheme on part of the vendors...


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## dcoscina (Nov 15, 2020)

JonS said:


> This has been a long time in the making, John. It's amazing how the music dealers I know are doing more business than ever during the pandemic yet big box stores like Guitar Center and Sam Ash are struggling.


Same here. I work for a reputable family run music store (not L&M) in Canada and our web sales have been significantly higher than ever before. Sweet water is also probably doing fine because they’ve been in the online order game the longest.


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## JonS (Nov 15, 2020)

dcoscina said:


> Same here. I work for a reputable family run music store (not L&M) in Canada and our web sales have been significantly higher than ever before. Sweet water is also probably doing fine because they’ve been in the online order game the longest.


Sweetwater is having a record year beyond anything they imagined.


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## wst3 (Nov 16, 2020)

JonS said:


> This has been a long time in the making, John.


A very long time coming. One of the things that keeps Sam Ash and Guitar Center alive is that they owe a ton to many manufacturers, and the manufacturers are not ready to write off those debts.

It is a very complicated mess!



JonS said:


> It's amazing how the music dealers I know are doing more business than ever during the pandemic yet big box stores like Guitar Center and Sam Ash are struggling.


See this makes sense to me. I have purchased two or three things from Sam Ash, and those purchases were made because I needed something immediately, and they were the only place that had them. I have yet to purchase anything from Guitar Center - the two times I set foot in their stores I was disappointed in the their sales folks - virtually clueless about musical instruments, well trained on the "hard sell".

The vast majority of my purchases are made directly from the developer, and when that is not possible I purchase from my local music store. For stuff they don't carry I will purchase on-line, usually from Full Compass or Vintage King. I still do some business with Sweetwater, but their approach is a little too aggressive for my tastes.

I fully expect both Sam Ash and Guitar Center to end up going out of business. For two NYC marquee business they lost their way, completely misunderstanding the marketplace. Yes, they enjoyed some time at the top, mostly for their low prices. But most musicians want to touch things before they buy.

This is also a problem in the sample library marketplace - there are a lot of folks that still bristle at purchasing libraries without getting to audition them first.

Time will tell, and if they do fail I worry about some of the smaller manufacturers that are still propping them up. Samsung/Harmon will survive, not so much Electro-Harmonix.

My two cents only!


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