Father Knows Best

It might have been a silly TV show from the ‘50s, but it was also a “house rule” of my child years. My pop was opinionated (I know it’s genetic…sorry) and today most of his opinions seem to be right on.

One opinion he constantly liked to say was, “Bigger doesn’t necessarily mean Better.” He passed away in ’01 but, in the ‘80s and ‘90s, mergers and big-box stores were driving him crazy. He hated them. He always believed customer service was as important as price. Of course he was right, but that wasn’t the opinion of most shoppers and that’s why the big-box guys kept expanding. They really thought trees could grow to the moon. Dad figured the only big box guys left standing someday would be Wal-Mart, Target, Lowes and maybe Home Depot. I wish he knew how right-as-rain he was.

There are literally thousands of giant operations with hundreds of stores each that are long gone. Some were merged into even bigger stores, like K-mart/Sears whose problems only got bigger as they did. Recently Office Depot-Office Max are cohabiting and co-hoping.

The subject most interesting to me is the music business, because I’ve been involved in every aspect of that business since I was five years old. From a student to a professional player I’ve been involved in playing/buying/dropping/breaking musical instruments. Music is a gift that lasts a lifetime and it makes your kids smarter when they learn to play a musical instrument.

kid playing guitarI’ve been a retail musical instrument sales guy, music store manager, music store owner, music instrument manufacturing representative, professional artist relations (providing equipment to the traveling pros), recording musician, recording producer, copy-righted songwriter and always nosy about what the hell is happening in the music business.  I’m here to tell you my dad is still right. Bigger is definitely never better when it comes to musical instrument stores.

Any dummy with tons of money can start opening giant big-box stores selling anything the public is interested in. As you keep opening stores your gross income looks great (duh) and you keep shifting more capital into assets—packing your giant stores with big rooms of guitars and amps and whatever. Manufacturers are inherently greedy, after all they also have a big horse to feed, and they will stupidly always give you ample credit to buy on time, because then their books look good with all the huge sales. They will also stupidly give the “huge orders” extra discounting so the big guys can sell to the public almost as cheap as the little stores pay to hang it on their walls. Little guys soon fold because they can’t compete (duh). Unfortunately, the smaller music shop was the place you could get the thing fixed (everything breaks sooner or later). You could also learn to play the damn thing from the little store because they had wonderful teachers packed into their square footage, instead of blow-out cheap guitars and drums.
Buying a musical product or accessory today is similar to buying a particular piece of hardware, a needed office supply product, or even shopping for some great used or old books. A sad fact: the little guys who love to take care of you, know your name, and are incredibly knowledgeable about their products…many are  gone now. Gone to small-store heaven with mom/pop hardware stores, office supply shops and cool book stores.  Now you have to talk to some kid about your stereo needs who can’t spell stereo. You have to look around on-line for some guitar method to help you learn, but watch out there, because the charlatans have found that niche too, and you will spend much more money to learn nothing or buy crappy-made guitars from guys like Esteban (please… never).

I watched the guy that made many millions from his first big-box venture called Office Depot. His name is Mark Begelman and he decided he needed to open big-box music stores to compete with Guitar Center (the only really big guys at the time). In 1996 he started MARS MUSIC, and opened 49 stores in 20 states. The dumb manufacturers bought into the biggest line of bullshit I’ve ever heard a business man sling. He scored one point for having teaching studios but no points for his merchandising. He only lasted six years and in that time he took his bank for $33 million and my good friends in the music industry got taken for over $15 million. Huge companies like Fender, Gibson, Roland, JBL, etc. were each owed over one million dollars. Why? Why would you give anybody that much credit?  So MARS (Music And Recording Superstore) disappeared in 2002.

Now we’re looking at a very shaky Guitar Center who is barely staying alive. They took their company public in ’97, but in 2007, Mitt Romney’s old friends, the Bain Capital vultures saw an opportunity to grab tons of money to throw off-shore to pay little or no taxes on. They did a TWO BILLION dollar buyout. (Of course it was purchased with 1.6 billion in “borrowed” money stripped out of GC’s assets. They did their usual modas operandi and loaded GC up with huge debt they will never repay. Their interest alone, on the Bain 1.6 billion debt is over 160 million a year. I read they lost about $25 million last quarter. Very Bad. Recently S&P changed GC’s rating from “stable” to “poor.”  Yuk.

I personally sold Guitar Center millions of dollars of goods. I did hundreds of sales-seminars and weekly training in dozens of their stores. I knew them very well. Yes, I took their money. I earned it. But, I never enjoyed doing business with them. I personally didn’t like most of their management team.  They probably didn’t like me either so we’re even. I’m sorry for another big hit to many of my friends in the business if they “walk-away” from their billion dollars owed. I’m also sorry for the 10,000 employees in the 250 stores that will be out of a job.

I’m happy for the regular guys in the music business.  Guys and Gals who personally own and manage their local music shop. The guys who know your name, know their products, repair the stuff they sell you, teach you how to play the damn thing, and simply love to talk to you about music. I’ve met hundreds of them and liked everyone.

music shop

music repair guy

Shop and Buy Localwhenever it’s possible.

About bakoheat

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