RED DOG MUSIC IN DIFFICULTIES - hence administration

guitars4you

http://mmrmagazine.com/mmr-global/red-dog-music-in-difficulties/

Just picked this up within a trade e-mail

Whitecat

Their Leeds shop closed a while back... sign of things to come I guess...!

DougCoda

Tough times at the moment with margins, lots of lines going out at just over cost..some at lower than cost at some dealers.

Jimbro66

DougCoda said:

Tough times at the moment with margins, lots of lines going out at just over cost..some at lower than cost at some dealers.

That's not good It doesn't bode well for the independent dealers we so much value.

How can this trend be reversed?

DougCoda

Jimbro66 said:

DougCoda said:

Tough times at the moment with margins, lots of lines going out at just over cost..some at lower than cost at some dealers.

That's not good It doesn't bode well for the independent dealers we so much value.

How can this trend be reversed?

Ulimatley if it carries on then stores will stop stocking the lines that are being trashed meaning that you can't try them in a retail enviroment which will not be good for checking out new products, some will sell regardles and some will lose market share due to their lack of exposure to the end user... and the race to the bottom will mean more casualties in the retail trade

guitars4you

Jimbro66 said:

DougCoda said:

Tough times at the moment with margins, lots of lines going out at just over cost..some at lower than cost at some dealers.

That's not good It doesn't bode well for the independent dealers we so much value.

How can this trend be reversed?

It is a big problem not just for our trade but for the whole retail industry - High streets are moving to serviced based businesses like beauty salons (hair/nails) and coffee shops or to become empty depleted ghost towns - In my town, an old traditional market town that is not in a 'poor area' and popular with tourists, so take out a host of antique shops, coffee shops and charity shops and the town would be dead - We currently have 6 empty shops on the main street and all within a stones throw of each other - This is a first in my memory of this town 

Some towns/cities are worse than others 

the problem can't be resolved by local town planners/authorities and not sure the government have the ability/interest to help, as a slight reduction in business rates alone is a token gesture at best 

Rightly or wrongly the trend to large 'on line' shopping is with us and I don't see that changing - I'm guilty of doing likewise for some products, because I don't want to sit in a traffic jam for 15 mins, waiting to park at a shopping centre on a busy day - Then wait in a line again to pay at the counter

I was lucky last week - Needed to update my daughters phone with Carphone Warehouse - Went to the shopping centre last Sunday - Must have been 10 staff on - All but 1 was busy serving - Got attended to by a helpful guy so I asked him about why so many staff doing nothing - He said you got in early - Come back in an hour or so and they'll be a 15 min wait to be served and it might take an hour to do the transaction - i was in/out in 15 mins - There is no way Id have waited for 15 mins to be served etc 

I'm not so sure there is a strong surplus of funds within the economy at the moment and the uncertainty over Brexit is not helping - The available funds is one problem, hopeful any uncertainty over Brexit will be resolved soon, one way or another, but could take  a while for any upturn

Any answer would need far more input than 2 or 3 paragraphs on a forum

guitars4you

Jimbro66 said:

That's not good It doesn't bode well for the independent dealers we so much value.

How can this trend be reversed?

I know a few sets of strings sold via Amazon on a Black Friday Promo won't by the saviour of  the guitar shops, if such sales had have gone to the local store - But that recent D'addario promo was cheap - They cost UK dealers more than (was it 3 sets for £10)  ?? - If they had have had 9-42, 10/46 and 11-49 gauge I'd have purchased 100's of them, from Amazon, as they were cheaper than buying direct from D'addario

This is not a cry for help either, just an observation - But for many of us a trip to the local dealer for a new set of strings, was more than just a 1 min in/out transaction - It was  a chance to walk around the store - Maybe see something of interest - Even chat to some old band mates etc have a chat with the dealer and have a coffee - I recall when Sat was more than just a days trading, it was a meeting place - Years ago Sat was often the busiest day of the week - That changed a few years ago now and has since become one of the most quiet days of the week

I'm not your regular high street store  -  And I'm closer to retirement than a new upstart - But it is tough and speaking to other retailers, big and small and to the trade suppliers, it is tough - Some say the worse they have known in 20 years - As a one man business I can afford to hang on in there, wheal n deal and scrape through - But many can't 

Winny_Pooh

My thoughts are that Red dog also does lots of home and semi pro recording gear and that market may perhaps be reaching the start of saturation at the moment. They're competing with Thomann at the low end and places like FunkyJunk/KMR at the high end. Plus their guitar stock has always been very bland and unimaginative. 

guitars4you

Winny_Pooh said:

My thoughts are that Red dog also does lots of home and semi pro recording gear and that market may perhaps be reaching the start of saturation at the moment. They're competing with Thomann at the low end and places like FunkyJunk/KMR at the high end. Plus their guitar stock has always been very bland and unimaginative. 

I've just had a look at their web site and yes quickly easy to see it is a tech based business with a selection of guitars tagged on - The hardcore of their business is anything but guitars or 'rock n roll'

I recall Digital Village as  a chain that was 100% tech based - margins, competition became tough so they moved into guitars, without really having any 'expertise' in that area - Eventually it all went tits up - I recall meeting a senior member/director of their management team on a PRS trip to the USA - All other dealers on the trip included guitar related guys from the UK from Peach, Guitar Village, GuitarGuitar, World Guitars etc, so we all knew each other and had a similar ethos - At the time the PRS Private Stock was good business and we all had a 2/3 hour slot in Paul's Private Room, to hand pick wood , to create our own guitars - Most of us were in dream land and helping each other pick bodies/necks etc - I recall this DV director saying to a senior  UK PRS representative  'what are they doing' 

octatonic

They are good guys, so I’m sad to hear this, but not surprised.

randella

guitars4you said:

Any answer would need far more input than 2 or 3 paragraphs on a forum

There's some good wisdom in all of your other posting on this thread, and I'm not trying to quote you out of context - but I think the little snippet above probably sums it up.

There are whole university departments now dedicated to this sort of thing - marketing and shopping habits.  I feel sorry for the small guys at the moment, I really do, because it's not through lack of ideas or work ethic that they're going to the wall.

Freebird

Winny_Pooh said:

My thoughts are that Red dog also does lots of home and semi pro recording gear and that market may perhaps be reaching the start of saturation at the moment. They're competing with Thomann at the low end and places like FunkyJunk/KMR at the high end. Plus their guitar stock has always been very bland and unimaginative. 

I know a guy who got a deal with Universal Music, and the only musical equipment he owned was a MacBook Pro, an audio interface, a 25-key MIDI keyboard, a NI Maschine Mikro, a microphone, and a set of headphones. Gone are the days where you needed shedloads of expensive gear to get anywhere.

guitars4you

randella said:

guitars4you said:

Any answer would need far more input than 2 or 3 paragraphs on a forum

There's some good wisdom in all of your other posting on this thread, and I'm not trying to quote you out of context - but I think the little snippet above probably sums it up.

There are whole university departments now dedicated to this sort of thing - marketing and shopping habits.  I feel sorry for the small guys at the moment, I really do, because it's not through lack of ideas or work ethic that they're going to the wall.

Thanks for the comment

Funnily enough in some trades it is not the small guy who has an issue - They can be fun, quickly adaptable, offer flare and inspiration - By me is  small 'coffee shop'  that has funky milk shakes, cakes and a great interior that appeals to a younger market - Run by 2 sisters who are barely 20 - Think this is their 2nd store - I admire their ideas and willingness to open in this climate - It always looks busy when I walk past, or visit for a treat with my daughter - But it reflects that the high street is now for 'coffee shops' and service industries  - In some trades the small are in a good position, albeit a 'lifestyle' business - And the very big are doing okay in our trade, like Andertons and Thomann - It is the middle ground that is at risk in our trade - 1 to 2 million £ turnover - 3/4/5 staff - Often secondary locations with a falling foot flow on their high street and struggling to compete on the web and appropriate social media sites - Narrow it down regarding your stock profile and identity and be very specialists can work, but stay small and discerning

In part the issue in our trade is that a stock level of £200,000 at cost means you are small fry - So hard for any new 'entrepreneurs' to enter the market - If you don't have the stock you can't compete - If you don't have the funds you can't have the stock - The days have gone when you could open up a music store with the contents of the bands transit - Sell and re-invest - I know many who did this in the 60's and 70's - But these days have long gone

Yet we all know many big names on the commercial high street are struggling and/or have gone - It will be interesting to see fresh ideas and how it might pan out - In some towns/cities, then the suburbs are re-inventing themselves, with small specialists shops, be it coffee, cake, fruit/veg, butchers etc on a 'local high street' with maybe 10/20 shop fronts that are busy - This approach appears to feed further interest and visitors

We have a 'farm shop' near us in Denstone that is heaving (Denstone Farm Shop) - My wife went yesterday with 3 friends and went for a bite - they were asked had you booked - Yes 'booked' in a farm shop !!!!!!! - they said no but a table was available 15 mins later - They have won numerous awards - Customers travel from a wide area

guitars4you

randella said:

guitars4you said:

Any answer would need far more input than 2 or 3 paragraphs on a forum

There's some good wisdom in all of your other posting on this thread, and I'm not trying to quote you out of context - but I think the little snippet above probably sums it up.

There are whole university departments now dedicated to this sort of thing - marketing and shopping habits.  I feel sorry for the small guys at the moment, I really do, because it's not through lack of ideas or work ethic that they're going to the wall.

Thinking about it again , many of the problems on the big high streets and shopping malls are not part of the problems in our trade - Yes there are common ground issues, but many of the best guitar stores in the UK are not in the big cities and/or on the major high streets

The work required to fix the high street is a social problem as well as economic problem and more than one problem exists - It doesn't help 'big retail' that so many chains are owned/financed by venture capitalist, so greed is at the centre of such stores - Some stores are still profitable and would survive in a smaller privately owned format, but the venture capitalist can obtain larger profits re-investing elsewhere, so they will close branches and adjust accordingly

Musicman20

Whilst there are issues with retailers, I've noticed a huge surge in smaller/independent restaurants and bars in Manchester.

I have spoken to a few of them (a few are people I've met through working in the city) and it seems that for a lot of them, business is great. I'm glad I do have some experience and skill in food as I might jump ship from law later in life. 

Whilst some will fail, if you hit it right with food and drink, you can have great success.

JimmyWings

At the root of it all is people's unwillingness to leave their houses for things like shopping. The internet.... siiigh....

guitars4you

Musicman20 said:

Whilst there are issues with retailers, I've noticed a huge surge in smaller/independent restaurants and bars in Manchester.

I have spoken to a few of them (a few are people I've met through working in the city) and it seems that for a lot of them, business is great. I'm glad I do have some experience and skill in food as I might jump ship from law later in life. 

Whilst some will fail, if you hit it right with food and drink, you can have great success.

Again, it is what certain experts are saying- If you can't buy it via Amazon, then a strong market can exists on the high street - ie  the service industry - hair cuts and beauty  - ditto coffee bars, food/drink/bistro (but I don't mean pubs), so 'social' gatherings

Guitar_Slinger

More people are living in city centres than did years ago as many old office buildings are replaced with new flats. These people are more likely to shop online and be walk-in trade for the service industries.

DanR

How loyal are modern customers nowadays.

Do we all just google everything and pick the cheapest price where ever it is?

I try to buy local and most of my purchases are through one shop unless they don’t stock it.

I normally get looked after so I prefer to buy through them wherever possible.

kt66

Mid range, high volume, low price, high street shops are toast.

In 10 years time High Streets will be homes, places to eat and drink, hairdressers and luxury shops.
I've also heard from a great source that Supermarkets days are numbered too.

Some needs to blow up Amazon

Paul7926

JimmyWings said:

At the root of it all is people's unwillingness to leave their houses for things like shopping. The internet.... siiigh....

I agree to a point but I think we have got to the stage where there is no reason to.  Let me try and explain what I mean.  I literally live about 30 paces away from a high street.  There is zero point me going to it because unless I want a haircut (the need for those is diminishing year on year!) a coffee, a mobile phone, a vape shop, a convenience store run by one of the main supermarkets or to nose around a charity shop I'm out of luck.  OK there are a few larger clothes retailers but they are all big name and have very little stock.  They are literally there to direct you to their web sites (or do it for you).  

If I choose to go to a larger town (Bournemouth, Southampton, Portsmouth) then I have to pay to travel and park and even then I've mostly got just the same big chains to choose from that I could have just looked up on the internet.  Sure they have bigger shops and hold more stock so I have more chance of getting what I want but why pay to travel/park on a chance when I can order online and be certain?

What internet shopping did was allow all consumers to be able to choose from a huge number of options.  Gone are the days where you had to buy the best thing you could find locally.  Price matching and fierce competition have got rid of the chance of finding a 'bargain' at a local shop.  Ebay, Gumtree and the other private selling platforms have pretty much killed off the pawn shops and bric-a-brac dealers.  Amazon and big name stores with an internet presence have almost done the same to the high street.

I'm old enough to remember the warnings about the bigger out of town supermarkets killing off the independent butchers and greengrocers.  That happened and now the same is happening to most other businesses.

Dragging this back to guitars I still think there is a chance for smaller businesses.  In another post I mentioned there is one near me that has been going as long as I can remember.  However they focus on the higher end of the spectrum and also set-ups and repairs.  Which I think is sensible.  Their intended market are people who will drop £1K+ on a guitar.  From what I've seen the people who can do that will do it more than once and they need to be able to hold that guitar in their hands as part of the purchase decision process.  Yes you can internet buy and send back but it's not like a pair of jeans where as long as they are not defective then a pair your size is fine.  Guitars vary on an individual basis so it's less suited to buy or send back logistics.

At this point I don't see the high street being 'saved' at all other than as a meeting place to socialise.  Some smaller shops can exist in niche/hobby areas like Music or say fishing supplies where part of the draw is to meet like minded people and share experiences but by their very nature these places don't need to be on a 'high street' as people will travel to them.