Guitar Center Reported Facing 'Imminent Bankrupcy'

GC, Bon Ton, Sears, and others, They are all falling victim to internet sales. How long before the government realizes they are losing money too, and puts the internet stores out of business to reopen stores so they can collect taxes.
 
Wakester said:
GC, Bon Ton, Sears, and others, They are all falling victim to internet sales. How long before the government realizes they are losing money too, and puts the internet stores out of business to reopen stores so they can collect taxes.
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A debt of over ONE Billion Dollars is not due to competition from 'internet sales'; it's gross mismanagement by the 'Management Committee'...in my opinion.

https://www.guitarcenter.com/pages/company-information
 
I think that the big thing with Guitar Center is much the same as what happened to Radio Shack. Primarily, they lost their focus....or, should I say, ownership and leadership lost focus.

"Drive revenue!! Every department needs to drive revenue!! Even the Service Department needs to DRIVE REVENUE!!"

That's not a bad thing in and of itself. Hell, every department in any business should be able to support itself and bring in a profit (or lend itself to the profitability of one/all I.E. HR or IT).

But just like Radio Shack, Guitar Center has lost sight of it's main focus - bringing quality gear at lower prices through massive buying power, a large network of stores....oh, and top notch customer service and a knowledgeable staff. Quite honestly, there is no good reason why these two companies are failing as they are. Rather, both of these businesses forgot about their customers and what the market asks for.

Yes, online sales has played into it the failure of both businesses. But it was their failure to adjust and provide a better mouse trap that did them in. However, there are many online stores with store front properties that do quite well no matter the markets.

Best Buy is going down the same route these days.
 
I can only speak for the three GC's in my area that I visit. To be honest (and to agree with WeFixFlats), I don't think "Internet stores" or anything online has much to do with their massive debt. I think they ran themselves into the ground all on their own.While I've had good an bad service at mine (they managed to lose my 2009 305 factory case and didn't seem to care about it either), I'll continue to make random visits to look for used deals. New stuff there might as well be considered used with all the damage to just about ever floor model. Maybe all of this will end up teaching them something...
 
they could have transitioned to online sales a bit better. It’s impossible to buy used gear because the pictures are God aweful.

I know they don’t make much on flipping used gear but they still charge nearly double what they paid for it.. Online used sales are nothing to skimp on when your business is going down the tube and online sales are growing.
 
I spent most of my adult life managing a multi-line powersports dralership. I started just after college in 1991 and "retired" in 2006. At first, the good old interwebs was just a baby...it just so happend, that baby was on high doses of HGH and Anabolic Steroids! It seemed that almost overnight...we were faced with more educated buyers, more competition, and a critical need to quickly adjust the way we did business. Fortunately, I was a tech weenie and I positioned my store to adapt to the ever changing market. We started small, but over time we became a formitable player in the internet market space. It was a beautiful thing.

I watched several dealerships that refused to adapt to this new way of doing powersports retail. Then I watched them slowly and very painfully die.


Bottom line is this...customer service has to be the #1 priority...period. You have to make it as easy as humanly possible to do business with you. If you don't... you end up becoming a cautionary tale that some business school professor uses as an example of...what NOT to do!

IMHO, customer service needs to make a serious comeback...from what I've seen...it's about as easy to find as bigfoot these days...I'll bet the deeper they dig into what went wrong...they'll find a lack of customer service to be a huge part of the problem overall...
 
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RaySachs said:
I stop into two GC stores on a somewhat regular basis - most of those folks who work at those two are pretty damn good. I feel bad for them if this is really going down.
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I have one that I've had the same experience with. The guy that helped me was knowledgeable, friendly and passionate about his job and music.

I thought about him when I read this. Ultimately, he and his family will be the ones that will suffer the most. All because of bad descisions made by the people way up the foodchain from him. So sad...who can say for sure but.. I would bet the C Level executives for GC that drove the company into this storm; wont be as hurt by the final outcome. At least not as much as this guy (and many like him) that loved what they did for a living.

Corporate greed at its finest...just sad...really really sad.
 
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We have one in Cedar Rapids Iowa. I've noticed in the last year their PA inventory has dwindled to bare minimum.
 
I think they also have a brand identity image. They sell online as Guitar Center, Musician's Friend, Music 123, Woodwind & Brass, and probably some others I don't know about. Just a guess here, but maybe they bought out too many other companies and didn't do enough consolidation.
 
...and all this debt in this unprecedented era of "free money" with interest rates in the 1% neighborhood. When investment capital regains its seemingly lost lustre and prime rates rise to 3-5%, look out, it'll be a bloodbath.
 
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