A pandemic-fueled surge in people wanting to learn how to play guitar and piano has given the country’s largest retailer of musical instruments a second chance at life, as investors and creditors have signed on to a plan that will allow 500 Guitar Center stores to emerge from bankruptcy.
In announcing the plan, which cuts its $1.3 billion of debt by more than half, Guitar Center CEO Ron Japinga called the proposal “an important and positive step” that will “enhance our ability to reinvest in our business to support long-term growth.”
Guitar Center said it hopes to complete the Chapter 11 reorganization by the end of the year, and that it will continue to pay employees and vendors in full through the critical holiday shopping season. It is also worth noting that Guitar Center posted an 85 percent increase in sales in August as consumers sought the solace of music to fill time in their increasingly home-based lifestyles.
Forget About Life For A While
Although Guitar Center’s huge debt and bankruptcy could have put it amongst a group of chain stores that have succumbed to the “retail apocalypse” caused by the coronavirus and other factors, it is also uniquely positioned to capitalize on a craze that is driving record numbers of would-be musicians to learn how to play the instrument of their dreams.
For example, the CEO of iconic Fender Guitars said his company went from furloughs, pay cuts and “looking into the abyss” to now record sales, inside a matter of months. “We’re selling more guitars than we know what to do with,” said Tom Sumner, Yamaha Corp. of America’s president and CEO, noting that his company has also sold five to six months’ worth of digital keyboards in two months during the pandemic.
The trend is also being seen outside the walls of traditional retailers and manufacturers. Not surprisingly, Reverb, the largest online musical instrument marketplace, said it has seen a significant increase in pandemic-era sales. According to the company’s Nov. 2 press release, consumers’ increased preference for online shopping, as well as traditional efforts like increased marketing, have also helped drive results.
“This year has brought many challenges to the musical instrument industry, but online sales have been a bright spot, with continued demand and growth,” said David Mandelbrot, CEO at Reverb.
Reverb also noted substantial double — and in some cases — triple-digit increases last quarter in searches for items such as ukuleles, microphones and guitars. It is a trend that was welcomed by the small business owners who cross-post their instrument inventory on Reverb’s platform.
“The world is weird right now,” said Reverb-poster Frank Gross of Thunder Road Guitars. “As people are getting more comfortable with shopping online for musical instruments, our Reverb shop helps us get our inventory in front of a broader community of musicians. We feel very lucky.”
This newfound passion for music and arts is also being noticed outside the U.S. where reports have shown solid increases overseas too. Sales of pianos and guitars in the U.K. were up 80 percent in the second quarter and confined consumers were also increasingly listening to music — and dancing to it, at least as digital streaming and demand for ballet lessons are concerned.
With concerts and live performances pretty much on hold for the past eight months, the DIY music craze is also seeing a large increase in downloads of music editing apps, such as Apple’s GarageBand, causing Rolling Stone magazine to ponder if the deadly pandemic might just inadvertently give birth to a new renaissance era.
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