Originally published at: In just one pandemic year, Guitar Center went from bankruptcy to IPO | Boing Boing
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one year after filing bankruptcy, instrument retail giant Guitar Center is now planning an initial public offering
Good for them for becoming solvent for planning to go into IPO seems like a big mistake, they need to plan for when this interest levels off and starts to dip again. Instead this seems like a cash grab to get their money now and then bail on the business when it craters again.
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As your accountant, I would caution against buying stock in Guitar Center. The market for musical instruments is very inelastic; they’re not consumable items. A good guitar or trumpet or amplifier can last for 2 decades unless you go all Pete Townshend.
As such, any bubble in guitar purchases (like what the Pandemic fueled) will take a very long time to work through the economy. The pandemic crammed 10 years of demand into a single year. That leaves 9 years of sales drought to follow.
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In some circumstances they can be considered a type of consumable:
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I wonder what real cultural changes the instrument buying and learning will have. Will Rock limp along for another few extra years before it is relegated to Rock and Roll Sundays on the NPR station? Will pop music be more focused on instrumentals? Is it just something that will affect people’s Instagram/TikTok feeds and not show up anywhere else?
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All very good points! Though one must also consider that GC also provides repair services, classes, strings, cables, accessories—so it’s not 100% built around instrument sales. That said, I still wouldn’t invest…but I’m a fan of local, independently owned music shops. Though there are few places other than GC where folks can experience the glory of 30 people shredding at once.
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Pandemic birthdays for teens are tough, so we decided to get Young Lady Peas her first brand-new guitar after years of playing everyone else’s used beaters. I instinctively avoided Guitar Center because, honestly I’ve only ever heard bad things. Unfortunately, the locally owned places around us didn’t carry the Race Red Telecaster we were after, so I went online and found Sweetwater. Their online reviews are unbelievably great, but I was skeptical anyway. Turns out, they’re an amazing company run by musicians with really competitive pricing and astonishingly great customer service. Highly recommended, although I doubt you’ll be able to buy stock anytime soon.
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the company says before pandemic shutdowns shuttered almost all locations, the chain had seen ten consecutive quarters of sales growth — but “COVID-19 wiped out much of (that) progress.”
The pandemic wasn’t responsible for the downturn in the company’s financial health. Guitar Center has for many years now been a private equity zombie, and this IPO is likely the Bain bust-out artists’ final cash-out. I smell an attempt to foist a gutted shell on naive investors as a fully operational and thriving business.
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At my local Trader Joe’s the piped in music is routinely AC/DC, Talking Heads, Rolling Stones, etc. This is, I’m afraid, the Late Stage Rock n Roll.
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When I hear more people are buying guitars it makes me think one thing: there will be more cheap guitars on craigslist and at yard sales when most of those people give up. Score!
Guitar Center is by far one of the most annoying places to shop. Salespeople try to strong arm you into buying stuff you don’t need or “scaling up” to the more expensive item, and the entire time you are assaulted by a cacophony of wanna-be-shredders trying out gear.
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5 Guys has an amazing rotation at our local place. Yeah, Rock and Roll is dead, guys (and it has been for 25 years).
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Was most of the gain made by Musician’s Friend and closing the brick and mortar stores?
I’ve loathed GC for decades. Mention the “Evil Empire” to any musician of my acquaintance and they’ll know exactly what store you are talking about.
And as @cannibalpeas mentioned, Sweetwater is great if you can’t find what you need locally.
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Came to say this. Going from bankruptcy to IPO in a year is not “an amazing turnaround”. That’s 1%er fat cat spin. This is all financial shenanigans and the IPO is just the vulture capitalists making their scheduled withdrawal. They feel they’ve faked sufficient value-building to convince struggling pension funds to buy their crappy stock so they can add a second helipad to their yacht.
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What percentage of the business of Mom and Pop music stores is going through Reverb.com now, do you suppose?
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Meh. The last time my son and I dared to enter Guitar Center we were totally ignored, which was kind of OK but not really. Spent our $$$ for a new keyboard for him at one of our local mom-and-pop shops, of which there are 3 in close proximity.
I try to buy instruments from them in person rather than online, since there’s something to be said for getting to try out an instrument before making a choice and knowing that it’s already been set up properly, too.
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The only thing worse than Guitar Center being my only option for buying gear would be Guitar Center being my only option for repairing gear. I’ve seen their own display guitars strung improperly, and if they can’t even put a set of strings on an instrument, what are they going to do if you let them try to use tools?
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The UK was at at that stage 25 years ago. Now it’s mostly house, trance and radio friendly indie.
There was that one time I went to Tesco and someone was playing bouncy techno over the speakers, but I suspect that was someones way of saying “I don’t care anymore, I quit”. It was the most entertaining shopping I have ever done, but I doubt most of the other shoppers felt that way.
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