Not looking good for Henry...

NelsonP

crunchman said:

NelsonP said:

Bigsby said:

NelsonP said:

Brexit should have put about 15% or so onto the cost of imported goods.

I haven't looked at the detail but it feels like Gibson's price increases over the last 2-3 years have been way beyond inflation plus exchange rates.

What would you prefer, feelings or facts?

We can eliminate the effect of Brexit by looking at $ prices (if only it were always that simple!)

Gibson Les Paul Standard, prices from Gibson's web site:

2015 - $3,759
2016 - $2,799
2017 - $2,799
2018 - $3,299

So, the 2018 price is still LOWER than the 2015 price! Of course, 2015 had seen a big price hike, but nonetheless, over the last 2 or 3 years prices haven't gone up dramatically.

Feeling better?

Ok I'll look at the detail:

2012 UK price £1999
www.musicradar.com/reviews/guitars/gibson-2012-les-paul-standard-553126

2014 UK price £2099
www.musicradar.com/reviews/guitars/gibson-les-paul-standard-2014-597113

2016 UK price £2099
www.musicradar.com/news/guitars/gibson-promises-best-year-ever-with-2016-electric-guitar-models-628642

2018 UK price £2499
www.musicradar.com/news/gibson-reveals-2018-guitar-line

ONS reports around 3% inflation pa in both 2016 and 17.

Assuming 15 % currency deval post brexit that would bring the retail price up to £2560, assuming everything else remains equal.

So actually prices are in line. Its just that the pound in my pocket just buys less guitar these days.

That doesn't change the fact that £2500 is an awful lot of cash to drop on a new les paul. 

Except that the pound is only 4% lower than it was just before the referendum.  $1.38 now vs $1.44 then.  4% is quite a difference from the 15% you are quoting.

You are also double counting because the 3% inflation in 2016 and 2017 was partly caused by the currency devaluation.  If you are considering the currency devaluation separately then you should ignore that component of the inflation figures.

There is no denying that they have jacked up prices by well above inflation.  They aren't the only one.  Fender and PRS prices have gone up by large amounts as well.

Fair points those, and they do indeed support my original assertion that "it feels like Gibson's price increases over the last 2-3 years have been way beyond inflation plus exchange rates".

Roysterdoyster

No doubt as can be seen from the above posts,iffy management seems to have been an issue. But surely,evolution and the good old t'internet (whilst on one hand being great for selling things) must have hurt the industry. In 1987 a guy in my band had a Les Paul Custom,which I drooled over for years,and was probably a factor in igniting my interest in guitars. But when I wanted a guitar ,I had to go into a shop and buy one. There was virtually no second hand market. But look at the platforms that are available now for buying used guitars. The last thing Id be doing when I want a new guitar is going to a shop to get it. Ill glady sit it out and buy a used one off the any gods amount of platforms that are available,be that gumtree,ebay,reverb,second hand dealer,forums etc. That's got to hurt new sales massively?

Plus a sad reality is, how many teenagers are drooling over Les Pauls? or any guitar for that matter?

 

guitars4you

NelsonP said:

crunchman said:

NelsonP said:

Bigsby said:

NelsonP said:

Brexit should have put about 15% or so onto the cost of imported goods.

I haven't looked at the detail but it feels like Gibson's price increases over the last 2-3 years have been way beyond inflation plus exchange rates.

What would you prefer, feelings or facts?

We can eliminate the effect of Brexit by looking at $ prices (if only it were always that simple!)

Gibson Les Paul Standard, prices from Gibson's web site:

2015 - $3,759
2016 - $2,799
2017 - $2,799
2018 - $3,299

So, the 2018 price is still LOWER than the 2015 price! Of course, 2015 had seen a big price hike, but nonetheless, over the last 2 or 3 years prices haven't gone up dramatically.

Feeling better?

Ok I'll look at the detail:

2012 UK price £1999
www.musicradar.com/reviews/guitars/gibson-2012-les-paul-standard-553126

2014 UK price £2099
www.musicradar.com/reviews/guitars/gibson-les-paul-standard-2014-597113

2016 UK price £2099
www.musicradar.com/news/guitars/gibson-promises-best-year-ever-with-2016-electric-guitar-models-628642

2018 UK price £2499
www.musicradar.com/news/gibson-reveals-2018-guitar-line

ONS reports around 3% inflation pa in both 2016 and 17.

Assuming 15 % currency deval post brexit that would bring the retail price up to £2560, assuming everything else remains equal.

So actually prices are in line. Its just that the pound in my pocket just buys less guitar these days.

That doesn't change the fact that £2500 is an awful lot of cash to drop on a new les paul. 

Except that the pound is only 4% lower than it was just before the referendum.  $1.38 now vs $1.44 then.  4% is quite a difference from the 15% you are quoting.

You are also double counting because the 3% inflation in 2016 and 2017 was partly caused by the currency devaluation.  If you are considering the currency devaluation separately then you should ignore that component of the inflation figures.

There is no denying that they have jacked up prices by well above inflation.  They aren't the only one.  Fender and PRS prices have gone up by large amounts as well.

Fair points those, and they do indeed support my original assertion that "it feels like Gibson's price increases over the last 2-3 years have been way beyond inflation plus exchange rates".

but remember all minor price changes at the factory are compounded as exchange rates and other factors come into play - For example

Take a $2000 Guitar as a cost price and at the old exchange rate supplied above (of 1.44 $ to £) ='s £1388.89 - now add UK import duty at 4% so it is now £1444 - then add UK vat at 20% so it becomes £1732

Now take the same $2000 cost price and add a 5% factory annual price increase so it becomes $2100 cost price - now exchange rate is 1.38 - Therefore cost is now £1521.74 -  Now add 4% import duty so it is now £1581.84   - Now add vat UK vat and the price is now £1899

So the price increase is always amplified  as such

NelsonP

So the armchair CEO view is:

- Simplify the range to focus on the core models across the key price points - e.g. Studio, Standard, Custom
- If the Standard must be £2.5k then develop the £1000-1500 price point and offer Gibson brand to people at more realistic prices, but still with decent quality - e.g. Les Paul Junior, Double Cut, USA SG etc (they are already doing this, so just do it more)
- Keep Custom shop doing its thing and target the wealthy middle aged rockers who want to be Slash, Joe Perry, Pete Townsend, Steve Jones
- Consider how to compete against Fender MiM for the younger, less cash rich guitarists (e.g. high end Epis with 'Made in USA' hardware, or MiK Gibsons (that last one might be a stretch too far?!)
- Identify some relevant contemporary guitar based bands, given them Gibson's and PR the hell out of it
- Improve quality control
- Stop innovating for the sake of it
- Dispose of non-core businesses
- Cut financing costs
- Stop dictating terms to the retailers. Maybe hand pick the very best ones and treat them better?

Anything I missed?

crunchman

NelsonP said:

Anything I missed?

Sort out the endorsements.  Apart from Bonamassa having about 50 of them, some of the other endorsement/signature things have been ridiculous.  Good an actor as he is, the world does not need a Kiefer Sutherland 336.  

stickyfiddle

crunchman said:

NelsonP said:

Anything I missed?

Sort out the endorsements.  Apart from Bonamassa having about 50 of them, some of the other endorsement/signature things have been ridiculous.  Good an actor as he is, the world does not need a Kiefer Sutherland 336.  

To be fair, that was a long time ago, and it was a really nice guitar. At least it wasn't just a les paul with mismatched knobs.

I'd be keen to see some signature models from anyone under the age of 50 and not playing blues.  I'm also amazed they've never done a run of The Edge white les pauls and/or Explorers after he sold his for charity (granted he's over 50, but not blues, so halfway there).

crunchman

stickyfiddle said:

crunchman said:

NelsonP said:

Anything I missed?

Sort out the endorsements.  Apart from Bonamassa having about 50 of them, some of the other endorsement/signature things have been ridiculous.  Good an actor as he is, the world does not need a Kiefer Sutherland 336.  

To be fair, that was a long time ago, and it was a really nice guitar. At least it wasn't just a les paul with mismatched knobs.

I'd be keen to see some signature models from anyone under the age of 50 and not playing blues.  I'm also amazed they've never done a run of The Edge white les pauls and/or Explorers after he sold his for charity (granted he's over 50, but not blues, so halfway there).

Not a signature model but they do seem to be trying to get under 50 non-blues players:

http://www.gibson.com/News-Lifestyle/News/en-us/Taylor-Swift-London-Arena-Residency.aspx

Jalapeno

As well as Taylor Swift - they ought to have a Madge model. Thought the Avril Lavigne Tele was a brilliant idea.

ICBM

Jalapeno said:

they ought to have a Madge model.

That is *not* going to appeal to the under-30s!

Or quite possibly the over-30s either...

Moe_Zambeek

NelsonP said:

Bigsby said:

NelsonP said:

Brexit should have put about 15% or so onto the cost of imported goods.

I haven't looked at the detail but it feels like Gibson's price increases over the last 2-3 years have been way beyond inflation plus exchange rates.

What would you prefer, feelings or facts?

We can eliminate the effect of Brexit by looking at $ prices (if only it were always that simple!)

Gibson Les Paul Standard, prices from Gibson's web site:

2015 - $3,759
2016 - $2,799
2017 - $2,799
2018 - $3,299

So, the 2018 price is still LOWER than the 2015 price! Of course, 2015 had seen a big price hike, but nonetheless, over the last 2 or 3 years prices haven't gone up dramatically.

Feeling better?

Ok I'll look at the detail:

2012 UK price £1999
www.musicradar.com/reviews/guitars/gibson-2012-les-paul-standard-553126

2014 UK price £2099
www.musicradar.com/reviews/guitars/gibson-les-paul-standard-2014-597113

2016 UK price £2099
www.musicradar.com/news/guitars/gibson-promises-best-year-ever-with-2016-electric-guitar-models-628642

2018 UK price £2499
www.musicradar.com/news/gibson-reveals-2018-guitar-line

ONS reports around 3% inflation pa in both 2016 and 17.

Assuming 15 % currency deval post brexit that would bring the retail price up to £2560, assuming everything else remains equal.

So actually prices are in line. Its just that the pound in my pocket just buys less guitar these days.

That doesn't change the fact that £2500 is an awful lot of cash to drop on a new les paul. 

Remember VAT has been (variously) 15 - 17.5 - 20% over the past few years, so HMRC have had a significant impact on guitar prices too.

crunchman

VAT changed to 20% in Jan 2011 so it has been constant through the time that NelsonP referenced.

Moe_Zambeek

crunchman said:

VAT changed to 20% in Jan 2011 so it has been constant through the time that NelsonP referenced.

True, (I forgot how long ago the emergency cut was!) but there’s still been a variance of up to 5% over the past decade in VAT rates, worth noting when comparing prices over the long haul.

Bigsby

When talking about exchange rates you also need to consider that on many products, including Gibson guitars, prices do not vary directly with exchange rates - they would be too volatile! What you typically see is a price set in £ or € which will be revised from time to time, often just yearly unless there is a currency crash. Thus current 2018 range prices were probably set based on conversion rates in September 2017 (when the models were announced), but also taking into account predictions for changes.

If you really want to know what Gibson are doing with their prices, look at the $ prices they quote, that rules out changes in exchange rate, VAT, etc. And if you do that, the 2018 price on a LP Standard is lower than it was in 2015, and didn't change between 2016 & 2017.

Blueingreen

crunchman said:

NelsonP said:

Anything I missed?

Sort out the endorsements.  Apart from Bonamassa having about 50 of them, some of the other endorsement/signature things have been ridiculous.  Good an actor as he is, the world does not need a Kiefer Sutherland 336.  

To be fair, they were great looking 336s.  I came within a whisker of buying one off Ebay a few years back, but the asking price was low enough to make me a bit suspicious and an email to Gibson asking them to confirm it was genuine didn't yield any useful information.  Still wonder if I missed out on a very nice little bargain, or just avoided being ripped off.

Powerslave

To me, an interesting side-effect of the current pricing of the USA line is that Gibson are now competing against themselves in some respects.

I think it was established above that a new USA Standard is going to cost you around 2.5k in 2018 - which is firmly in the ball-park of current custom shop pricing (used). Pros and cons of going new Standard vs used CS, of course, but I know where I'd be inclined to put my money.

Similar to the conundrum for prospective PRS customers - new S2 vs used core line.

As an aside, I think used CS prices have nudged upwards recently - perhaps as a result of this pricing comparison, and also the continued upwards curve of new CS pricing.

Of course, Gibson still get to sell their new guitar - to the dealer. But it's going to have an impact on stock levels at dealers (swamped with them, forced to dump, etc) and potentially leads to dealers taking a break from their Gibson contract (Guitar Village, PMT, etc). That then does impact Gibson directly, I'm sure.

My personal take is that Standards and the Traditional model are over-priced for what they are, particularly if two-piece backs are still being used at the given price point. In turn, my suspicion is that the remainder of the line down is like-wise "over-priced".

The dealer "relationship" which Gibson is reported as having is ugly, and will no doubt deter many potential dealers (big and small). When times were really tough at PRS, Mr Smith tirelessly courted and embraced his dealers worldwide and delivered (arguably) some of the company's finest (limited run) guitars. He gave the dealers something which was mutually beneficial - attractive guitars that would sell, even at a high ticket value during an economic slump.

Henry's / Gibson's approach appears to be very different indeed.

Rabs

I don't think its just that..

I think the year on year model line up is their big issue..  Firstly because they feel they probably cant give up on the auto tuners they now have TWO lines of the same model which in itself is bonkers... 

Then because everyone now knows exactly when the new models will be coming out, most sensible people will then just wait for last years models to be blown out to make room for the new ones.. Then theres the fact that they also sell them on Amazon.

Its a totally unsustainable thing to do in the guitar world.. They arnt mobile phones or tablets that get thrown away every few years..  A good guitar will last more than one life time.

NelsonP

Bigsby said:

If you really want to know what Gibson are doing with their prices, look at the $ prices they quote, that rules out changes in exchange rate, VAT, etc. And if you do that, the 2018 price on a LP Standard is lower than it was in 2015, and didn't change between 2016 & 2017.

That might be fine if I lived in the US, bought my guitars with $ and had more then 3000 of the buggers burning a hole in my pocket.

But I don't :-(

Bigsby

NelsonP said:

Bigsby said:

If you really want to know what Gibson are doing with their prices, look at the $ prices they quote, that rules out changes in exchange rate, VAT, etc. And if you do that, the 2018 price on a LP Standard is lower than it was in 2015, and didn't change between 2016 & 2017.

That might be fine if I lived in the US, bought my guitars with $ and had more then 3000 of the buggers burning a hole in my pocket.

But I don't :-(

The point is to make it easier to see what Gibson are doing with their prices, (lower in 2018 than in 2015), rather than to make it easier for you to buy one... Sorry, I can't help you with the latter.

Whitecat

https://www.digitalmusicnews.com/2018/02/28/gibson-guitar-vulture-acquisition/

guitars4you

Whitecat said:

https://www.digitalmusicnews.com/2018/02/28/gibson-guitar-vulture-acquisition/

It would be interesting to see that if Gibson was Chinese owned, how they would go about protecting the IPR against other builders and the Ghibson fakes - Some irony there IMO