GC being Sold!

[Norrin Radd]

Norrin
A 2 billion dollar with dept of 200 million? Where is the rub?

We just finished a thread about what you could do if you could change one thing with GC. This was a thread about the sale and not that your salesman of 14 years cannot act as a free agent when it comes to pricing. Turn over is the bain of all companies especially in entry level retail. Marty adressed this fully in Dallas.



Your thread was poorly thought out and a bit of a hijack.

Probably was a bit of a hijack. I'll delete it for you.

 

[Marty Albertson]

hello all......been a busy day. Thanks to all of you for your well wishes and support. This is a good thing for GC as it will help us focus our resources in areas that will more specifically benefit our customers. We have opened over 200 stores in the last ten years, grown Musicain's Friend from 70mil to 500mil and taken on Music and Arts. It has been a wild ride and the hardest part has been maintaining our customer service standards while dealing with the need to move our best people to all the new stores as we open them.

You guys are right to complain about our sales staff turnover.....it is too high. But with that said we have decreased it over 40% in the last two years. We have goals to reduce it another 50%. Our best stores have turnover rates of about 25% which is actually very low for retail. Our worst stores have turnover rates in the 150% range.....terrible. And no surprise, our best performing stores have some of the lowest turnover.

Regarding a sales person's ability to discount......we find that our sales people too often reduce a price for no competitive reason or for any good reason for that matter. We believe that our GLP is already the lowest price available and we will be happy to lower it if a competitor has a lower one. However, the biggest cause of sales staff turnover is low wages and the key to raising the wages is insuring that our profit margin is secure. You may not like having to go through a process to receive a discount from GLP but we want to insure that there is a valid reason to discount below GLP. We also believe that we have a responsibility to the brands we represent to maintain a credibility with their brand. Discounting below GLP discredits the product brand and over time can erode the value of the brand.

Frankly you can't have it both ways.......great long term sales associates and deep discounting. If we go that direction we will be forced to go to a clerk sales environment like that seen in most big box mass merchants.....and believe me if you think our service levels are challenged today.......

Lastly.....I want to insure that anyone on this forum feels free to speak candidly about their experience at GC.....just remember in a candid environment you will get push back if your comments create a debate.....which is a good thing. OPen debate is how we can learn. You have to appreciate that in a debate your comments can be vigorously challenged which I will do openly and candidly if necessary.

With that said.....200mil of debt for a 2bil company is considered ridiculously low.
Check this out....when we close this private transaction we will have 1.5 BILLION in debt.....NOW THAT'S A LOT OF DEBT.......but very carefully calculated to be easily managed.

I'll be with you all for years to come.....but for now it has been a long day and I need a scotch and a Cuban.

 

[Big Poppa]

I hope you mean a cigar, Marty.

Hey Norrin, thanks! Look what it got us!

I guarantee that we just got more info than the Wall Street Journal, Cnn, CNBC combined and it is very much appreciated, Marty.

 

[Norrin Radd]

BP -

I really didn't mean to start anything. BUT, if it means Marty will be posting more I'll just keep ruffling feathers! (I'm just kidding - but it sure is nice to have Marty's input!) Suffice it to say, I completely understand (and agree with) his reasoning about not being able to have it both ways. And like I said previously - I really don't know the workings of a large corporation like GC or what is good business practice on the $$ side of things. I only know what I want as a consumer, and I'll stick to that. Believe me, with four GCs within 20 miles of my home, I want them all to be successful!

You are right though. My GC comment didn't need to be in this thread and for that I am sorry. Can I be forgiven if I go restock all my Wonder Wipes tomorrow???

 

[bovinehost]

Not much to add but I did want to also say thanks again, Marty.

Sounds like you've had quite a day and, to top it all off, you read the EBMM Forum and give us the scoop.

Thanks!

Jack

 

[lock-ny]

Marty, I live in Long Island New York and I will tell you that both the GC's here are great, granted the personnel has changed over the years and you do have some schmucks working there from time to time it doesnt change the fact that i can grab any guitar off the wall I please and play it through any head or combo I want to check out without someone nagging me to buy it. I have also gotten some INCREDIBLE deals there, I wont post what I paid for my silo special brand new but its unheard of, and I recently picked up a squier 51 for 60 bucks to mod the hell out of for fun - no complaints here but hey, you cant make all the people happy all the time but If I need something I goto GC, plus the 30 day return policy is necessary for fickle musicians -

 

[Big Poppa]

NOrrin Like Marty said your opinion is welcome but niehter one of us is going to give you corporate speak and will defend the position.

I dont think that all of you understand the depth of Marty's post and I think it could be the single best post since I have been hanging around.

Im going to make sure those dullards on the bass side see this. (dont tell them I called them dullards...they get sensitive usually four hours after I insult them...It take a while for it to sink in)

 

[midopa]

It take a while for it to sink in)

hey...






So what are you trying to say?






Big thanks to Mr. Marty Albertson for taking the time to post here and reveal information to us as BP said isn't available to any other media outlet. I can't wait to see what's in store for GC. The three local GCs in my area are really great (I like the Sherman Oaks ones) and/or have come quite a ways in improving themselves for the customer.

 

[Jim_F]

Thanks for the insight Marty -

Question from a dullard here - any plans to expand into Europe (specifically the UK - even more specifically, London)?

 

[newtley]

what the..

Im going to make sure those dullards on the bass side see this. (dont tell them I called them dullards...they get sensitive usually four hours after I insult them...It take a while for it to sink in)

huh..?

well golly.. today IS a brand new day!

whaddya know...it's neat to be given such an insightful window into a very complex machine. Nice dialoging on everyone's part.
Thanks, (insert spiritual iconic figurehead) .

 

[Psycho Ward]

Im going to make sure those dullards on the bass side see this. (dont tell them I called them dullards...they get sensitive usually four hours after I insult them...It take a while for it to sink in)

I'm honored to be called a dullard... you are referring to the bluegrass band from the Andy Griffith Show… right BP?

I’m married to a CFO and there is always corporate type discussions going on around me, (I don’t understand a word of it, but I’m a musician so the spouses think I’m interesting.)

I really appreciate Marty posting here and it is a rare opportunity to hear from another major league player in the music industry, having access to BP has spoilt us. Boys and girls this is NOT the norm and I for one don’t take it for granted!

I’ve had good experiences with GC and MF and sure have spent lots of money there, (my CFO often reminds me of that.) Our new GC here in GSO has had some turnover since they opened but it’s been for the better here, the effort by the staff to get me a MarkBass amp was top notch.

I wish Marty and GC well and thank you for the great deals.

 

[Marty Albertson]

Not sure what a "dullard" is .......but yes we do have plans to expand in the EU...we think a lot of the UK and greater EU market and look forward to opening there in the not too distant future...

 

[AnthonyD]

Did somebody say "Dullard"?

This thread is another great example of why I hang-out here!



Glad to hear Marty and Team are staying on - a testament to the great work you've been doing and of more to come!

Wishing you much success!





You know, from a selfish perspective I suspect we will all benefit from it!

 

[Kristopher]

Thanks Marty! It's awesome to be able to hear your insight.

I bought a GK cab this weekend at GC and had a great experience with a very knowledgeable salesman who answered all my questions. Yay!

 

[tommyindelaware]

+1 !!!!
this means i can still use gc as my first go to for gear when i'm road doggin. ( which has been the case since i met u guys in dallas !!!!)
i think you guys do an AMAZING job. & i've worked...& dealt w/ many over the years....
wheres' my gc/ebmm ball tweekin permit card ????

This thread is another great example of why I hang-out here!



Glad to hear Marty and Team are staying on - a testament to the great work you've been doing and of more to come!

Wishing you much success!





You know, from a selfish perspective I suspect we will all benefit from it!

 

[Beth]

A 2 billion dollar with dept of 200 million? Where is the rub?

I was gonna say.... that's like turning down Elle MacPherson because she hasn't waxed her eyebrows in a couple weeks

Marty, thank you very much for your esteemed comments and for taking the time out of your day to post here on the forum. I think that this is a very important time for the industry -- in retail, recording and manufacturing. I'm proud to be a part of the company with whom you share this information and your thoughts. Thanks again.

-Beth

 

[Dargin]

thanks for the insightful post Marty. I read it several times!

Scotty

 

[paranoid70]

I just think it is really cool that the CEO of a huge company like Guitar Center posts comments here and genuinely welcomes our inputs. Working for a huge corporation myself I can honestly say that his comments seem alot more honest and sincere than the lip service I typically get from our high level managers. Good luck with the sale Marty.

 

[kbaim]

God I love these kinds of threads.

So I find myself wondering if Marty (and his top people) signed a 5 year agreement to stay on? And also if it's going to be harder (or easier) to offer perks to retain the best employees and attract new ones??

I'm gonna miss having a stake in the company. Should be getting a call from Pete Dubaldo any second.

 

[Smellybum]

hello all......been a busy day. Thanks to all of you for your well wishes and support. This is a good thing for GC as it will help us focus our resources in areas that will more specifically benefit our customers. We have opened over 200 stores in the last ten years, grown Musicain's Friend from 70mil to 500mil and taken on Music and Arts. It has been a wild ride and the hardest part has been maintaining our customer service standards while dealing with the need to move our best people to all the new stores as we open them.

You guys are right to complain about our sales staff turnover.....it is too high. But with that said we have decreased it over 40% in the last two years. We have goals to reduce it another 50%. Our best stores have turnover rates of about 25% which is actually very low for retail. Our worst stores have turnover rates in the 150% range.....terrible. And no surprise, our best performing stores have some of the lowest turnover.

Regarding a sales person's ability to discount......we find that our sales people too often reduce a price for no competitive reason or for any good reason for that matter. We believe that our GLP is already the lowest price available and we will be happy to lower it if a competitor has a lower one. However, the biggest cause of sales staff turnover is low wages and the key to raising the wages is insuring that our profit margin is secure. You may not like having to go through a process to receive a discount from GLP but we want to insure that there is a valid reason to discount below GLP. We also believe that we have a responsibility to the brands we represent to maintain a credibility with their brand. Discounting below GLP discredits the product brand and over time can erode the value of the brand.

Frankly you can't have it both ways.......great long term sales associates and deep discounting. If we go that direction we will be forced to go to a clerk sales environment like that seen in most big box mass merchants.....and believe me if you think our service levels are challenged today.......

Lastly.....I want to insure that anyone on this forum feels free to speak candidly about their experience at GC.....just remember in a candid environment you will get push back if your comments create a debate.....which is a good thing. OPen debate is how we can learn. You have to appreciate that in a debate your comments can be vigorously challenged which I will do openly and candidly if necessary.

With that said.....200mil of debt for a 2bil company is considered ridiculously low.
Check this out....when we close this private transaction we will have 1.5 BILLION in debt.....NOW THAT'S A LOT OF DEBT.......but very carefully calculated to be easily managed.

I'll be with you all for years to come.....but for now it has been a long day and I need a scotch and a Cuban.

Forgive my selfishness..... - is the expansion into europe still going ahead ?