Mesa Boogie and Guitar Center

[glassjaw7]

Just talked to a manager at the GC I used to hit up. They are indeed done with Mesa (or vise versa). Selling out the rest of their stock and that's it. Only thing on clearance is an Electra Dyne for $1100. Great price for a new ED!

 

[glip22]

GC is going under pretty soon, and Mesa is the first of what I expect to be many manufacturers that pull out of there. GC is going to pull a whole bunch of manufacturers down with them. Fender is struggling right now too!

https://www.thegearpage.net/board/showth ... ?t=1251829

That thread has a bunch of info, mostly pertaining to Fender, but also to the state of Guitar Center. Craigslist, eBay, and even sites like Rig-Talk, TGP, not to mention manufacturer to consumer sales are hurting big box stores like GC.

Obie will save Fender just like he did GM with a bailout. No worries.

 

[RG955TT]

My GC is offering 10% off on some, 15% on other pieces. That to me isnt really that great of a deal. I wanted a mini Recto but all they have is demos left (used IMO) so $850 doesnt really inspire me to pullt he trigger.

 

[angelspade]

Thought I would chime in here: Guitar Center doesn't actually have a sales / market share problem...They actually never have. They have a debt to equity ratio problem...Thereby creating a NET profit problem, their margins have evaporated. When things were good (economy), they got fat, happy...And stupid very quickly. We see this with publicly held entities all the time. They over-expanded and over saturated...And used a disproportionate amount of debt and issuance to facilitate this directive. They were more than happy to trample upon the graves of long standing, family owned and regional instrument retailers through volume purchasing power undercutting, price fixing and bullying exclusivity agreements with manufacturers. On top of all this good news, they completely ignored service and quality control. Now they have re-consolidated / renegotiated their debts (one again) at a rate approaching 10% (a severe market premium). Ironic, GC will ultimately fail....As it should, as these are the laws of capitalism that should govern fat and over-weighted corporations. The musical instrument superstore: a good idea conceptually, that went horribly wrong.

 

[rupe]

For the record, my understanding from some "insiders" is that this decision was made by Mesa, not Guitar Center.

 

[baron55]

Thought I would chime in here: Guitar Center doesn't actually have a sales / market share problem...They actually never have. They have a debt to equity ratio problem...Thereby creating a NET profit problem, their margins have evaporated. When things were good (economy), they got fat, happy...And stupid very quickly. We see this with publicly held entities all the time. They over-expanded and over saturated...And used a disproportionate amount of debt and issuance to facilitate this directive. They were more than happy to trample upon the graves of long standing, family owned and regional instrument retailers through volume purchasing power undercutting, price fixing and bullying exclusivity agreements with manufacturers. On top of all this good news, they completely ignored service and quality control. Now they have re-consolidated / renegotiated their debts (one again) at a rate approaching 10% (a severe market premium). Ironic, GC will ultimately fail....As it should, as these are the laws of capitalism that should govern fat and over-weighted corporations. The musical instrument superstore: a good idea conceptually, that went horribly wrong.

Exactly, this is also pretty much across the who big box store industry, Best Buy, Circuit City, etc. Best case for GC is to file Bankruptcy Chapter 11 and re-emerge as an online only business. Pretty much what Circuit City did. I keep hearing people say Fender, Gibson won't let them go under. They have no choice in the matter. In some ways I hope Gibson and Fender get royally shafted, they deserve it! They treated all the smaller mom and pop stores like crap since GC sold the bulk of there gear. Now they will literally pay the price.

 

[ratter]

Mesa is smart. They are simply evacuating a listing ship.

+1

And good riddance, IMO. What has Guitar Center done other than Walmart-ize the gear biz...

 

[marvcus]

Thought I would chime in here: Guitar Center doesn't actually have a sales / market share problem...They actually never have. They have a debt to equity ratio problem...Thereby creating a NET profit problem, their margins have evaporated. When things were good (economy), they got fat, happy...And stupid very quickly. We see this with publicly held entities all the time. They over-expanded and over saturated...And used a disproportionate amount of debt and issuance to facilitate this directive. They were more than happy to trample upon the graves of long standing, family owned and regional instrument retailers through volume purchasing power undercutting, price fixing and bullying exclusivity agreements with manufacturers. On top of all this good news, they completely ignored service and quality control. Now they have re-consolidated / renegotiated their debts (one again) at a rate approaching 10% (a severe market premium). Ironic, GC will ultimately fail....As it should, as these are the laws of capitalism that should govern fat and over-weighted corporations. The musical instrument superstore: a good idea conceptually, that went horribly wrong.

ALL this. I think the whole brick-and-mortar guitar store model will ultimately go to the wayside. It's good for first timers/parents and the few who still like to play before they buy, but buying on the Internet is becoming more and more the standard and less the exception. Probably more profitable to open a gear packing/shipping store - ha.

I think Mesa pulled out of Dallas a while back; The Guitar Sanctuary (a small high-end shop here) has been a dealer for a while now.

 

[thiswaythatway]

And watch the thinking of TGP will probably have it that Mesa has suddenly improved their QC and the tone of their amps.

 

[Valtyr]

Some GC locations never carried new Boogie gear, like the one near me. I guess it depended on whether or not some other local shop already did, Mesa seems to want to wield a lot more control over their dealer network than many other brands.

 

[yes indeed]

This is the official statement.
http://www.mmrmagazine.com/7647/news/me ... s-with-gc/

 

[Norton666]

I was a Mesa dealer for quite a few years and this move doesnt surprise me. Mesa have VERY strict requirements of their dealers and when I became a dealer , one of their main selling points to me was that " You'll never see Mesa in Guitar Center or online stores " . Of course that didnt hold true. When I cancelled my dealership and offered discounts on my Mesa gear to clear it out , I was threatened with legal action from Mesa. They also would not honor any warranties on equipment I sold , whether it be at full retail or not , after they found out that I was cancelling my dealership. The whole situation felt like I was dealing with a ex girlfriend throwing a fit because you dumped her.

 

[yes indeed]

Online sales tax legislation being passed soon will help what i think is the intended outcome of this whole thing.

 

[napalmdeath]

Everyone knows about GC's financial trouble. If I were an amp company I wouldn't want a huge IOU out there for floor stock when the end comes. Smart business move by Mesa IMO.

This.

Mesa does not want to take the hit on gear thats had "Master of Puppets" cranked through it at full volume continuously, out of tune, and in 5 second increments.

And plugged into a B52 cab with mismatched ohms.

 

[napalmdeath]

This is the official statement.
http://www.mmrmagazine.com/7647/news/me ... s-with-gc/

Welp, says it all. Never seen GC offer "thorough and professional representation" of ANYTHING. I haven't set foot in a GC in nearly 5 years because of stupidity they employ. Last visit, they tried to charge me almost $60 for a 10-pack of D'addarios, and called me a liar when I told them I was paying $29.99 regularly from AMS.

 

[yes indeed]

GC is what it is and Mesa is what it is.... and that's why Mc'Donalds doesn't serve t-bone steaks. It will be interesting to see what companies follow this trend in the near future.

 

[Viesczy]

Did I miss where Bain Capital was pointed out as the company that saddled GC with the suffocating debt?

Gotta love pirate capitalism.

Derek

 

[glip22]

I was a Mesa dealer for quite a few years and this move doesnt surprise me. Mesa have VERY strict requirements of their dealers and when I became a dealer , one of their main selling points to me was that " You'll never see Mesa in Guitar Center or online stores " . Of course that didnt hold true. When I cancelled my dealership and offered discounts on my Mesa gear to clear it out , I was threatened with legal action from Mesa. They also would not honor any warranties on equipment I sold , whether it be at full retail or not , after they found out that I was cancelling my dealership. The whole situation felt like I was dealing with a ex girlfriend throwing a fit because you dumped her.

Mesa does have that reputation. They have filed so many suits against other builders and companies for stealing Mesa ideas that never really were there ideas to begin with.

 

[Shiny_Surface]

I was a Mesa dealer for quite a few years and this move doesnt surprise me. Mesa have VERY strict requirements of their dealers and when I became a dealer , one of their main selling points to me was that " You'll never see Mesa in Guitar Center or online stores " . Of course that didnt hold true. When I cancelled my dealership and offered discounts on my Mesa gear to clear it out , I was threatened with legal action from Mesa. They also would not honor any warranties on equipment I sold , whether it be at full retail or not , after they found out that I was cancelling my dealership. The whole situation felt like I was dealing with a ex girlfriend throwing a fit because you dumped her.

Did Mesa force you to stock their low selling items? They have many more low selling items than the few they are known for, so I imagine much of it would just sit around in inventory compared to the relatively few popular sellers.

 

[yes indeed]

Norton can answer that question as far as his experience goes. IMO it doesn't make sense for a dealer to carry a line if he is just going to carry a few top sellers as this does not adequately represent what products are available. A reasonable mix of items that fit the stores clientle works because if products are not selling through at a profit it helps absolutely nobody. On the other hand , it also doesn't make sense to carry these items and have them take up valuable realestate in their store if someone is just going to come in and try it out only to order it online to save the sales tax. So that's the long and the short of it.