Will high end boutique guitar shops go bust?

stonevibe

With all the chaos that is happening in the world right now, I kind of think that the high end guitar retailers are going to be in some serious trouble.

When you are selling instruments that start at a few grand a pop and can go up into tens of thousands, you must be in for some bleak times over the next six months or so.

I really hope they all survive, but it looks like it is going to hit hard in the UK and Europe. 

Epsilon

I agree that they will struggle, but I expect probably less-so than box shifters or shops specialising in low end stuff. Given that what they sell is quite niche and specialised, they're probably used to sitting on stock for longer and don't rely so much on a constant churn of cash flow. They probably also have less big contractual commitment orders (like those required to be a Gibson or Fender dealer). Probably also more likely to be sole proprietor or a small staff, rather than masses of people on the payroll covering a host of central services (HR, finance, marketing, distribution etc). The business rates holiday will no doubt help a lot.

I also wonder if their clientele are less likely to be affected, or certainly more able to absorb a financial hit and can afford to continue their patronage of boutique luthiers.

Certainly a struggle, but I do hope they can muddle through. We have some fantastic high end shops in this country and it would be such a shame to see them go.

stonevibe

Yeah, valid points. I think it might be hard to shift guitars at any price in the next few months.

mbe

Accelerating bucket list acquisition (ABLA) may kick in and save the day.

Dominic

I don't think they will suffer any more than any other "luxury" goods or the Housing market, cars,furniture, High Fashion or even the more random things like Garden Centres , Jewellers etc...........it's all relative .
 There will be a huge shift towards less conspicuous consumption and focus on essential living for most people .
It will be a New World when we finally come out the other end .
 

Skipped

mbe said:

Accelerating bucket list acquisition (ABLA) may kick in and save the day.

I think that is a good point.

When I was about 20, a long time ago, my plan to (eventually) get my holy grail dream guitar included this important detail:

"In this lifetime".

Because.....what if you come back as a  Garden Slug?

hotpickups

Skipped said:

mbe said:

Accelerating bucket list acquisition (ABLA) may kick in and save the day.

I think that is a good point.

When I was about 20, a long time ago, my plan to (eventually) get my holy grail dream guitar included this important detail:

"In this lifetime".

Because.....what if you come back as a  Garden Slug?

At least I think I’ve achieved that I.e. guitar. Everything else now is icing on the cake. Not sure I’d trade it for a slugs life after all the slug bait I’ve put around the garden over the years  

Nunogilberto

Call me flippant, but I think if you run a shop selling high ticket goods like high end guitars, you're probably well off enough to get by...

DanR

Nunogilberto said:

Call me flippant, but I think if you run a shop selling high ticket goods like high end guitars, you're probably well off enough to get by...

That makes no sense.

hotpickups

DanR said:

Nunogilberto said:

Call me flippant, but I think if you run a shop selling high ticket goods like high end guitars, you're probably well off enough to get by...

That makes no sense.

Yeah I was trying to make the sense of that statement too 

rossi

The people with a lot of money mainly are not in the usual system of work,get paid ,lose job  etc .They inherit ,have stocks that go up in the end and own their own properties  so the its usually the great unwashed  that suffer.Few  actual bankers lost any money in the 2008 crash .Banks lost a fortune and the government bailed them out and we paid for it .Politicians will protect the rich but only help the average guy to survive long enough to work for the rich again.And its still better than communism  !!!

richardhomer

I can’t remember the figure - Mark @guitars4you quoted it in a thread on here IIRC - but the total value of the UK MI market is surprisingly small. There are relatively few ‘true’ high-end dealers. By definition, their clientele are not likely to be poor. In hard economic times, typically the poorest suffer more hardship than the richest - ergo, whilst I doubt high-end guitar shops will escape completely unscathed, they probably stand a better chance than some.

Incidentally, the amount of ‘will this sector survive/can I shaft a seller at the moment’ type threads are kind of depressing....

Musicman20

I think buying high end guitars is very low priority now. 

guitars4you

I know the opening comment/question was with regards to 'high end boutique guitar shops' but IMO it applies to the whole of the Music Industry and other leisure based industries as a whole - For many of us, any hobby based product we purchase is more about wanting to buy it, as against needing to buy it

I recall on an other FB discussion, many months ago, some FB member saying 'if I purchased any guitar based on needs, then I would not have any guitar' - How true

As a result, like many other businesses, in a host of sectors, that are going to struggle, over the next few weeks/months, then it certainly won't be buoyant

guitars4you

Nunogilberto said:

Call me flippant, but I think if you run a shop selling high ticket goods like high end guitars, you're probably well off enough to get by...

time for me to sell the DB11 and the country mansion that I acquired on the way to become a capitalist fat pig  !!!!!!!!!!!!!!!!!!

Nunogilberto

DanR said:

Nunogilberto said:

Call me flippant, but I think if you run a shop selling high ticket goods like high end guitars, you're probably well off enough to get by...

That makes no sense.

What I'm saying is if you run such a business, the chances are you're probably comfortably off, so even if people aren't buying your goods at present, you're not going to go bust  because you can still afford the business rates and overheads etc. Unlike, say, the owner of a general music shop.

SimpleSimon

I doubt the top end of the market will be affected at all. The Pat Smear Falcon recently @ATB_Guitars proves this , Didnt it sell within a day or so? People with money will still have money. The smaller boutique sellers like Coda/Peach/WorldGuitars are much smaller operations compared to the box shifters, Plus surely the likes of Andertons and Guitar Guitar will have access to the same Government funds that any other business has. I imagine the biggest issue is protecting their stock inventory during these uncertain times and waiting out the situation like the rest of us.The like of ATB are niche so will always have a share of the market.

idiotwindow

SimpleSimon said:

Plus surely the likes of Andertons and Guitar Guitar will have access to the same Government funds that any other business has.

They will but businesses of all sizes will still struggle with cashflow drying up and there are other considerable overheads that the treasury aren't able to help with. Andertons and GuitarGuitar are probably not immune to these pressures as both will likely be leveraged and the business model depends upon a high turnover of stock going out of the door. I suspect Guitar Village decided to get in first and liquidate much of its stock to boost cashflow in advance of the possibility of further restrictions down the line that might scupper online sales of non-essential products. If Guitar Village acted hastily, the worst that can happen is that they need to restock when things start getting back to normal.

Jalapeno

SimpleSimon said:

 I imagine the biggest issue is protecting their stock inventory during these uncertain times and waiting out the situation like the rest of us.

On the contrary their biggest issue will be getting shot of inventory as fast as possible - witness Guitar Village 20% Sale - to get cash in and enable survival.  IMHO survival all depends how leveraged the businesses are, if they own their premises, how big the wages bill is etc.

RonnieHotdogs

Nunogilberto said:

Call me flippant, but I think if you run a shop selling high ticket goods like high end guitars, you're probably well off enough to get by...

Flippant. 

ICBM

Nunogilberto said:

What I'm saying is if you run such a business, the chances are you're probably comfortably off, so even if people aren't buying your goods at present, you're not going to go bust  because you can still afford the business rates and overheads etc. Unlike, say, the owner of a general music shop.

You clearly aren’t aware of the economics of running a small specialist music shop. If anything the owner of a general music shop will be doing better, but I still doubt they’re as well off as you think.

I have worked for both types of shop. The only reason a small shop might be more likely to survive this than a large one is if they’re so small that their expenses can be brought down close to zero - but that will mean cutting staff since they’re the biggest expense now that the government has delayed business rates and VAT.

Even the ones who specialise in repairs and so can normally fall back on that - which has helped them survive against online sales competition - are now facing a lack of income since they can’t take in new work or have finished work collected.

The only thing that’s going to save most of them is government help, and even that may well not be enough after we go back to ‘normal’, if ‘normal’ means a reduction in overall guitar buying - which I think it may.