Fender is in trouble too
I remember the washington post headline “the death of the electric guitar” in 2017
Any thoughts?
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Well, I was a bit sad to hear this as I like Gibson as a brand, although they have made some bad design decisions over the last lot of years.
Personally I just spent a lot of money on a Les Paul and now I’m concerned how much value it will loose when it comes to selling it.
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It’s essentially poor management. Obviously Gibson guitars have been facing criticism but very ironically that part of the Gibson activities still works decently in terms of revenue. It’s declining, but it works. The video below sums up well the obvious.
There’s also this recent interview of the CEO and owner of Gibson Henry Juszkiewicz.
There’s (some) truth to what he says, which echoes things Fender’s CEO said few months ago: there seems to be some issue into getting new people into guitar/instruments. Guitar isn’t going away, but it’s no longer the 80’s anymore where it was the main instrument about everywhere.
That said, the situation Gibson is facing is nothing new, so there’s a lot of it that’s simply on him and his management. In other words, they had it coming. And there’s no bloody way any brand would be able to match the emulation around Apple products. It would be similar to imagining a Gibson store where in a corner you’d have Gibson, Steinberger, Dobro, Kramer instruments. Then in another corner Philips consumer electronics with headphones and the likes. Then in another corner pro audio and electronics with KRK and Cakewalk products. And you’d have at least one of these shops in most big cities if not more. Said like that it sounds sexy on paper, doesn’t it?
Gibson has the nasty tendency to acquire companies and assets and essentially do little if anything with it to value them. 80’s guitars and Metal guitars are popular again? No Kramer to be seen: Satchel even switched from Kramer to Charvel recently. Ergonomic guitars are the craze? Gibson owns the “original” ones with Steinberger. They only resurrected a couple of models this year but the brand was essentially dead despite .strandberg* making a name for themselves. They acquired Cakewalk in 2013 from Roland to set their foot into digital mediums with the TASCAM platform? TASCAM never happened, Cakewalk was shut down last November to save money for the Philips consumer electronics activities Gibson owns, and the intellectual properties were very recently (almost saved) acquired by BandLab Technologies. So on so forth unfortunately.
The mismanagement also struck the relationships side of things, notably with endorsees. Bill Kelliher from Mastodon, who used to be endorsed by Gibson wasn’t exactly kind in his comments about the brand after they parted ways.
Neither was James Hetfield from Metallica.
I doubt Thomann (major European music online retailer) holds Gibson in their heart either… Coming back to what I started this post with, it’s pretty ironic that the instrument crafts section of Gibson’s activities is the only one doing decently well.
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Discussed this and Guitar Center with Frank Gambale this week when we met up. He agrees with the “bad management” theory. As a counterpoint, he’s a Carvin endorser and apparently they’re growing, just opened up a huge new factory. Changing times. Carvin has been catalog-only, direct sales since the beginning. Surprise, along comes the internet and the entirety of online shopping is essentially a turbocharged version of catalog sales. Carvin is ideally poised to win in such a scenario, and other companies can adapt or die. It’s the way of things.
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Carvin is a weird one. The inheritors split the business in half: the guitar/instrument side of things became Kiesel Guitars while the audio part became Carvin Audio (like the Steve Vai Legacy amps). Carvin Audio went under last year. EDIT: And you can still find their gear heavily discounted on their website.
Jeff Kiesel isn’t exactly the most popular figure on some forums due to how he handles communication and customer service, but he seems to be something right somewhere regardless. But I digress.
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You’re right, forgot that, Frank mentioned the Kiesel name. Didn’t know that about the audio side of the business going under.
Not familiar with Jeff, but I have a healthy respect for customer service and the challenge of providing it. I like to take the optimistic view that at this stage of the game, there is not a complaint that a customer can have that hasn’t been had a thousand times before, and handled gracefully a thousand times before. You just need to know what that graceful response is, and offer it. And then get on with running your business.
To be accurate it’s more that they had to close their factory, so it’s not dead as in… well, dead. The brand was relaunched with focus on smaller equipments. Amps and similar systems like monitors are gone apparently.
But anyway, I should get back on topic.
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The Gibson brand name in guitars is valuable enough that even if the current cynical bastards running the company are forced to cease operations, another set of cynical bastards will buy up the brand name and assets for pennies on the dollar and continue to churn out guitars under the same name. Creditors would get screwed, and there would most likely be job losses and production might relocate, but somebody would still end up officially making guitars under the Gibson name no matter how this unfolds.
The article below talks about this with respect to Twinkies and the Hostess bankruptcy:
This is also a good place to mention Heritage Guitars, a company that was literally founded by former Gibson employees after Gibson closed its Kalamazoo, MI factory in the 80s.
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After Carvin became Kiesel the quality went up massively. Jeff Kiesel is that rare third-generation operator of a family business that knows what he is doing and isn’t ruining it.
I had the opportunity to check out the Carvin factory before it closed, awesome guitars. They would probably be $3000-5000 if made by a standard company like Ibanez, ESP, Jackson, or Fender.
@Lukhas I believe Carvin audio had a new product at 2018 winter NAMM so I don’t believe they are done.
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I wonder why we can choose the tyres,the wheels,the seats,the colour,the engine ,etc… when we buy a car,and we have instead to go to the custom shop route for a gibson,fender,etc… which are ridiculously expensive
Although this by itself perhaps is not going to grow the sales of the great guitar brands at least they would evolve , as they are almost always copying themselves ( the 59 model,the cbs model,…)
And of course new young guitar heroes not only talented as players but also as great song composers
Perhaps there are several in this forum
Surprised to hear people claiming Fender is struggling - I’ve seen a few poorly-informed articles about “ZOMG Fender haz millionz in debtz!” and the like here and there over the years (debt is a totally valid form of balance sheet financing) and while they have a high yield credit rating, I haven’t seen anything about impending balance sheet strees on thhem anywhere near what Gibson’s going through.
Bloomberg had an article on them in their Top News page a few days ago which I grabbed for a different forum - I’ve quoted it below. The gist, though, is they have a bond maturity coming due this summer, they will need to roll the maturity by issuing new bonds to pay for it (not abnormal, lots of firms do this), but it’s unclear if the investment bank they’re working with is going to be able to get enough interest in buying new Gibson bonds to actually float the offering. If they can’t refinance it, then bankruptcy restructuring is likely. And, a large group of existing bondholders is pushing for a debt-for-equity swap to take control of the firm and leave Juszkiewicz with a non-controlling minority stake, and kick him out of the CEO role, as part of their terms.
I’m definitely more investment grade than high yield, but this is kind of what I do for a living so happy to answer questions on this stuff as the story unfolds. Considering Juszkiewicz is the guy who thought the Robot Guitar was a good idea and who had the firm skip NAMM this year to attend a consumer electronics convention to push Phillips (which Gibson now owns) instead, I can’t help thinking some new leadership wouldn’t be the end of the world.
Meanwhile, Fender has been killing it lately - I’ve been impressed by the quality and consistency of ooff-the-wall US and Mexican Fenders for a number of years now, and my mutt '14 American Standard body/American Deluxe neck is all sorts of awesome.
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Fender’s biggest win over Gibson aside from realistic pricing is Squier having amazing quality control as of late. Squier is slowly diminishing the stigma against Made in China guitars. Epiphone’s lackluster QC is one of Gibson’s biggest blunders. Epiphone sends out way too many guitars with fret sprout, crackly pots, or overspray.
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It goes beyond that, on both sides - Fender’s QC has been excellent the last half decade or so, at least, whereas Gibson’s has been abysmal.
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QFA… I bought an Explorer a couple of years back (being a huge fan of Brendon Small was a lot to do with it so very much looking forward to CTC interview!)… and it was one of the 120th anniversary models, with nice white binding on the neck to mark it as a special edition.
Unfortunately when I received it I found the build quality was kinda sub par, the neck binding overshoots the neck a little so you can feel a slight ridge in where it joins the neck around the 3rd to 5th fret. Also the scratch plate screws were drilled carelessly which means the scratch plate never sits quite flush with the body. I really considered sending it back… but I love how it plays and sounds so decided to live with it. I would never buy another guitar from Gibson though as it was a very poor first impression (I’ve always used Fender/PRS in the past).