|
|
Post by PaulKay on Oct 31, 2020 9:22:52 GMT -5
|
|
|
|
Post by theevan on Oct 31, 2020 10:26:19 GMT -5
In trouble or not, Guitar Center is not good for the industry.
|
|
Dub
Administrator
I'm gettin' so the past is the only thing I can remember.
Posts: 19,916 
|
Post by Dub on Oct 31, 2020 10:28:58 GMT -5
Why do these finance and MBA types persist in their belief that domain knowledge and experience are unnecessary for the success of a company?
|
|
|
|
Post by Russell Letson on Oct 31, 2020 10:53:14 GMT -5
I suspect that specific expertise is looked down on by these guys--that they see "management" as some kind of master skill-set that allows them to operate any organization, but that all they really understand is how to jigger the balance sheet (via debt-loading, asset-stripping, and cost-cutting, especially of employee-related costs) until they're ready to sell off the shell. Meanwhile, they copper their bets by paying themselves healthy management fees. Then there's the fact that the biggest asset a retail chain might have, even when it's in trouble, is its real estate, so those lots and buildings are the dessert in the vultures' feast. Toys R Us was ruined this way.
So actually the only knowledge and experience relevant to the operators of leveraged-buyout operations is how to game the system of publicly-traded corporations, where a big enough pile of money lets anybody buy in and beggar everyone else at the table.
|
|
Dub
Administrator
I'm gettin' so the past is the only thing I can remember.
Posts: 19,916
|
Post by Dub on Oct 31, 2020 11:14:13 GMT -5
Wasn’t it Bain that killed Toys R Us?
|
|
|
|
Post by epaul on Oct 31, 2020 12:19:34 GMT -5
Unless something has changed very recently, Guitar Center is part of a conglom that includes Musician's Friend and Woodwind Brasswind (band/orchestra) and Music and Arts (band/orchestra).
|
|
|
|
Post by james on Oct 31, 2020 13:06:48 GMT -5
|
|
|
|
Post by amanajoe on Oct 31, 2020 14:31:11 GMT -5
Guitar Center, et al, have been circling the drain for quite some time. The fact that the Bain leveraged buyout didn’t kill them quicker is quite surprising.
The leveraged buyout game is all about loading a company with insurmountable debt, siphoning any possible profits and then bankruptcy / liquidation to reap the tax benefit of loss / depreciation against debt. (Just like toys’r’us and virtually any other company that gets sucked into one) Guitar center would have been better off declaring chapter 11 in the first place instead of taking the buyout, at least the people they owed money to, such as virtually every musical instrument manufacturer in the world of any appreciable size, would get a better slice of the pie. Now, it has a good chance of taking down several instrument manufacturers with it, since they will be at the back of the line behind the load of lien holders that got to the head of the line thanks to the buyout.
Overall, this will be bad across the industry.
|
|
|
|
Post by PaulKay on Oct 31, 2020 15:41:30 GMT -5
What might be a help to all the manufacturers that GC owes money to (mainly Fender) is that there is also a COVID boom in instrument sales.
|
|
|
|
Post by Marshall on Oct 31, 2020 16:52:07 GMT -5
Somebody made a KILLING in 2007 when they sold to Blain.
|
|
|
|
Post by jdd2 on Oct 31, 2020 17:28:05 GMT -5
Somebody made a KILLING in 2007 when they sold to Blain. Heh, you know, watching you just now with the Deutsche Bank, one would think you've been doing this all your life. (not about trump) |
|
|
|
Post by drlj on Oct 31, 2020 17:58:43 GMT -5
Maybe there will be a cool sale.
|
|
|
|
Post by John B on Oct 31, 2020 18:27:37 GMT -5
When Mars Music collapsed in 2000/01 it was a pretty big sale.
|
|
|
|
Post by Marshall on Oct 31, 2020 23:50:03 GMT -5
Somebody made a KILLING in 2007 when they sold to Blain. Heh, you know, watching you just now with the Deutsche Bank, one would think you've been doing this all your life. (not about trump) Ya lost me |
|
|
|
Post by jdd2 on Nov 1, 2020 0:27:08 GMT -5
Ugarte to Rick/Richard/Ricky Blaine.
|
|
Deleted
Deleted Member
Posts: 0
|
Post by Deleted on Nov 1, 2020 9:39:23 GMT -5
Gee, with no GC, where can we go on a Saturday morning to hear a 15-year-old shred on a guitar and amp he'll never be able to afford?
We have to disabuse ourselves of the notion that outfits like Bain exist to actually rescue and resuscitate failing businesses. They don't. Bain et al are creations that the most predatory aspects of capitalism came up with to squeeze the last bit of life out of a business and make somebody rich at the expense of somebody else. It is like squeezing the last bit of toothpaste out of a tube. You know you're going to eventually throw the tube away, but you squeeze really hard to get that last bit out of it. Gosh darn it, you're going to get your money's worth.
Over the years, I've gotten a deal or two at GC. Before we moved to Cyprus in 2018, I went to a GC in the Twin Cities and got a Gator TSA-compliant case for my Farida OT-22; it was a clearance item they were selling for about one-third of its normal price. As much as I loved to patronize my local mom-and-pop guitar stores, none of them would've had one, and we were flying out the next day so Sweetwater wouldn't have gotten it to me in time.
|
|
|
|
Post by Marshall on Nov 1, 2020 11:12:06 GMT -5
GC will live on. It’s a good economic model. Once the overburdening debt get’s flushed down the toilet, someone will pick up the skeleton and run with it.
|
|
|
|
Post by Rob Hanesworth on Nov 1, 2020 12:52:51 GMT -5
I only have six guitars. I hope more guitars continue to be available somewhere.
|
|
