CMS Author Craig Vecchione Posted July 30, 2014 CMS Author Share Posted July 30, 2014 Mr. B has left the building Link to comment Share on other sites More sharing options...
Members abzurd Posted July 30, 2014 Members Share Posted July 30, 2014 Explanation from Behringer http://forum.behringer.com/showthread.php?4402-BEHRINGER-no-longer-with-Guitar-Center What is says below - After 20 years, Guitar Center recently decided to terminate our relationship. Frankly, it became increasingly difficult to do business with GC as they sought to increase their profits, which would have forced us to increase our prices to you. We didn’t agree. 25 years ago, Uli Behringer founded our Company on the principle of offering products at “Double the Experience for Half the Price”. Because Uli was a struggling musician himself, he made it his mission in life to offer amazing products at amazing prices, so YOU can fulfill your musical dreams. This will never change. We thank you for all your loyalty and support. You guys are wonderful! We'd also like to thank all of our independent dealers who share our vision that customers are #1. Joe SanbornSenior Manager, Marketing CommunicationsMUSIC GroupBEHRINGER Link to comment Share on other sites More sharing options...
Members abzurd Posted July 30, 2014 Members Share Posted July 30, 2014 And Guitar Center's side of the story.... as you might expect, the complete opposite of Behringer's. http://www.musicincmag.com/News/2014...140519_GC.html Meh, 2 companies that have pillaged their way through 2 decades. One has succeeded (B), the other may not be long for the world (GC). Oh well, enjoy GC center shelves not full of the absolute cheapest thing while you can! Link to comment Share on other sites More sharing options...
Members abzurd Posted July 30, 2014 Members Share Posted July 30, 2014 One more thing. I just found an article about GC. It's a good read, IMO. - http://www.ericgarland.co/2014/03/29/parasite-economy/ Link to comment Share on other sites More sharing options...
Members Dogoth Posted July 31, 2014 Members Share Posted July 31, 2014 One more thing. I just found an article about GC. It's a good read, IMO. - http://www.ericgarland.co/2014/03/29/parasite-economy/ Wow that's fascinating. The question I have is "How do you tell the good guys from the bad guys?". In other words he calls for a boycott of companies owned by greedy hard core bottom line corporate weenies but without a lot of deep research, how can you know? Great read though Thanks! Link to comment Share on other sites More sharing options...
CMS Author Craig Vecchione Posted July 31, 2014 Author CMS Author Share Posted July 31, 2014 Does anyone actually believe that either Behringer or GC wouldn't seek "to increase their profits"? That's not a reason to sever a business relationship. But it's no surprise that they'd try to pull the "we're looking out for YOU" line. Here's some interesting dialog that includes people who used to work for GC/MF:http://forums.prosoundweb.com/index.php/topic,150038.0.html Link to comment Share on other sites More sharing options...
CMS Author Craig Vecchione Posted July 31, 2014 Author CMS Author Share Posted July 31, 2014 Wow that's fascinating. The question I have is "How do you tell the good guys from the bad guys?". In other words he calls for a boycott of companies owned by greedy hard core bottom line corporate weenies but without a lot of deep research, how can you know? Great read though Thanks! You can't know without a lot of deep research and a little luck. It's set up that way on purpose. Link to comment Share on other sites More sharing options...
Members Pro Sound Guy Posted July 31, 2014 Members Share Posted July 31, 2014 I read both....sure is a lot of grey area. But bottom line is WFC's? Link to comment Share on other sites More sharing options...
Members agedhorse Posted July 31, 2014 Members Share Posted July 31, 2014 You guys might want to borrow some muck boots when reading either side of the argument Link to comment Share on other sites More sharing options...
CMS Author Craig Vecchione Posted July 31, 2014 Author CMS Author Share Posted July 31, 2014 Oh don't get me wrong...there's BS a-plenty from both camps. And sadly both will suffer because of their failure to agree to and abide by terms. Link to comment Share on other sites More sharing options...
Members abzurd Posted July 31, 2014 Members Share Posted July 31, 2014 If I had to guess by reading between the lines, I'd say Behringer probably wanted to shorten "days to pay". GC feared putting B on more favorable terms would be suicide as other vendors would demand the same terms, else everyone is letting B cut to the head of the line at the bank. In this case you can't really blame either party. B wants to be paid and GC is in debt up to their eyeballs and can't suddenly come up with a large cash payment to shorten the payment cycle. With the amount of B gear they move, I would imagine just shortening the cycle on just B would be a huge outlay. If they suddenly go from 60 days to 30 days net, for instance, there would be a lump sum extra month of all B gear due. So GC calls B's bluff and B doesn't budge..... stalemate. All of that was pure conjecture, but if Behringer is selling at every other major chain in the USA, you have to assume their terms are not that unreasonable. After all, other vendors have boycotted B before, for different reasons in the past (Sweetwater for quality issues about 10 years ago). You do have to know when to get off the gravy train and being the first one off isn't necessarily a bad thing. I would imagine there are a lot of MI companies out there with pretty shaky balance sheets (Mackie for instance) and GC going under with several months outstanding, would be a big blow. Link to comment Share on other sites More sharing options...
Members Vito Corleone Posted July 31, 2014 Members Share Posted July 31, 2014 Does anyone actually believe that either Behringer or GC wouldn't seek "to increase their profits"? Well, in some instances increased profits for one is going to come at the expense of the other. But I suspect abzurd is correct here that this is probably about terms. I would imagine Behringer's profit margins are pretty low and they make it up in volume. In that case they need the cash flow provided by short net terms. GC wants longer terms because they don't have cash. That makes the most sense. Seems they are just circling the drain at this point. Behringer probably knows this and figures GC isn't going to be selling their stuff much longer anyhow.... And yes...if I was selling gear to GC on terms, I'd want as little receivable outstanding with them as possible. Not getting paid after they file bankruptcy isn't going to be fun for any of their vendors. Link to comment Share on other sites More sharing options...
CMS Author Craig Vecchione Posted August 1, 2014 Author CMS Author Share Posted August 1, 2014 Well, in some instances increased profits for one is going to come at the expense of the other. But I suspect abzurd is correct here that this is probably about terms. I would imagine Behringer's profit margins are pretty low and they make it up in volume. In that case they need the cash flow provided by short net terms. GC wants longer terms because they don't have cash. That makes the most sense. Seems they are just circling the drain at this point. Behringer probably knows this and figures GC isn't going to be selling their stuff much longer anyhow.... And yes...if I was selling gear to GC on terms, I'd want as little receivable outstanding with them as possible. Not getting paid after they file bankruptcy isn't going to be fun for any of their vendors. While it's always possible GC could go bankrupt, I think there's money to be made by playing the corporate money shift game that's been going on for years now. If it wasn't working for all involved, it wouldn't be happening. And there wouldn't be much loss for a big corp like Behringer if GC did suddenly go under...a few containers of merchandise isn't going to make or break Music Group, and most of the loss would be written off or could be insured. Link to comment Share on other sites More sharing options...
Members cappttenron Posted August 1, 2014 Members Share Posted August 1, 2014 Well looked up what employees are saying at Glassdoor and easily one of the worst companies I have ever seen for disgruntled employees. Here is a typical post. Most liked coworkers but thought management was the worst. ~2 people found this helpful “The worst mistake of my life.” Anonymous Employee (Former Employee) Pros – Really awesome co-workers. The people who work there are great. For the most part. Watch for spies. Cons – Uli Behringer is a sociopath, plain and simple. Seriously, you can't imagine how awful it is to work with this nutcase. Rapid turnover. You might have a job and get fired for no reason weeks later. It happens A LOT. Advice to Senior Management – Uli, go stick your head in a blender you psycho. No, I would not recommend this company to a friend Link to comment Share on other sites More sharing options...
CMS Author Craig Vecchione Posted August 1, 2014 Author CMS Author Share Posted August 1, 2014 Yeah, I was going to avoid mentioning any of the employee comments I've found over the years there. While it's way more common for those sites to be populated with the disgruntled, I agree that I've rarely seen people hate the CEO as they do Uli. Link to comment Share on other sites More sharing options...
Members cappttenron Posted August 1, 2014 Members Share Posted August 1, 2014 Rapid turnover is usually a symptom of a serious problem in a company. Then again its pretty easy to see that GC has financial problems and if Behringer tightened up the credit terms then of course the relationship will stop working. Bain Capital is the one Romney was associated with by the way and where he made his fortune. The have now handed off the debt/ownership to Ares and here is an interesting quote: ~More details about the Bain-Ares handoff came out around 48 hours ago. They revolve, unsurprisingly, around a restructuring of senior PIK (payment in kind) notes that offered money up front with huge balloon payments on the back end. Under the current deals, GC would owe over $950 million in 2017 alone, an amount that would be impossible to pay off. I was skeptical about any form of refinancing, since the ratings agencies have compared their debt to scratchers tickets. But Ares is charging ahead and is preparing a bond offering to the market despite all the hullaboo: Link to comment Share on other sites More sharing options...
Members Vito Corleone Posted August 1, 2014 Members Share Posted August 1, 2014 What it might be like to work for Uli isn't really relevant to a financial dispute between Berhinger and Guitar Center I wouldn't think. As far as they being insured for losses? Perhaps. But GC also must be one of their biggest clients. I would imagine the amount of money GC owes them on any given month must be pretty substantial. Berhinger must be figuring they will get many of those same sales through other outlets, but they certainly must also know their overall sales will drop as a result of this. That can't be an easy decision to make. . Writing off the losses on your taxes is a last resort and small condolences at best. Pennies on the dollar. Link to comment Share on other sites More sharing options...
CMS Author Craig Vecchione Posted August 1, 2014 Author CMS Author Share Posted August 1, 2014 What it might be like to work for Uli isn't really relevant to a financial dispute between Berhinger and Guitar Center I wouldn't think. As far as they being insured for losses? Perhaps. But GC also must be one of their biggest clients. I would imagine the amount of money GC owes them on any given month must be pretty substantial. Berhinger must be figuring they will get many of those same sales through other outlets, but they certainly must also know their overall sales will drop as a result of this. That can't be an easy decision to make. . Writing off the losses on your taxes is a last resort and small condolences at best. Pennies on the dollar. The sad fact is that it's the employees who are often the only players to suffer in these situations. The executives are well insulated and typically are so wealthy that any of them could retire and live in comfort at any point. This is rarely necessary as the network of executives sitting on boards and in corporate officer positions is so entrenched that few ever go more than a few months without "work". Link to comment Share on other sites More sharing options...
Members Vito Corleone Posted August 1, 2014 Members Share Posted August 1, 2014 The sad fact is that it's the employees who are often the only players to suffer in these situations. The executives are well insulated and typically are so wealthy that any of them could retire and live in comfort at any point. This is rarely necessary as the network of executives sitting on boards and in corporate officer positions is so entrenched that few ever go more than a few months without Oh, no doubt. when and if GC finally goes under thousands of employees will be without jobs, money owed to countless vendors will defaulted on, but the golden parachutes for the execs will remain intact. it's the American Way, is it not? Link to comment Share on other sites More sharing options...
Members nchangin Posted August 1, 2014 Members Share Posted August 1, 2014 Oh yes the corporate exec just slither to another company for their annual 300 k bonus's even when the company shows a loss and files banko, funny how all that works to pay for their fancy clothes and 8 weeks of paid time off. Link to comment Share on other sites More sharing options...
Members Telecruiser Posted August 1, 2014 Members Share Posted August 1, 2014 Beringer is owed a lot of money I'm sure but there are other companies holding the bag for GC, Fender being one of them as well as many, if not all, of the top tiered vendors. I'm sure their attitude is either keep shipping in hopes of getting paid or pull the plug (like Beringer), cut your losses and walk. Tough decision. As far as employees losing their jobs at GC, there are a number of people at the vendors who will lose theirs also if GC goes under, which it likely will. After Beringer decided to cut their losses I wouldn't be surprised to see others follow. If this happens GC's demise will be accelerated drastically. Link to comment Share on other sites More sharing options...
Members abzurd Posted August 1, 2014 Members Share Posted August 1, 2014 I despise Behringer, but the sad fact is, they are likely one of the more healthy companies in the industry and have the ability to cut ties with a large vendor. Other companies, especially public ones, need every sale they can get and are willing to put up with the credit risk. Behringer is privately held I think so that helps. Link to comment Share on other sites More sharing options...
Members fdew Posted August 1, 2014 Members Share Posted August 1, 2014 This seems like a reasonable explanation of GC problem. The customers are broke,http://www.ericgarland.co/2014/03/19/guitar-centers-real-problem-customers-broke/ Dude, WHAT? This is an industry that depends on consumers – period. There’s no heavy industrial level drumset market. And professional musicians? We ain’t making any more of those compared to past decades that featured a record industry. So in what universe does lower consumer spending not matter? This is a common self-deception in America in 2014: That we had some recovery and everything is normal. We did not. Link to comment Share on other sites More sharing options...
Members cappttenron Posted August 2, 2014 Members Share Posted August 2, 2014 Well when I walk into GC on a Saturday its always busy in my area. This seems to be a common theme in retailers they grow like a weed until like Circuit City the management and Wall St. milk them and load them up with debt to sustain unsustainable growth. I feel sorry for the GC employees who mostly arepart time musicians. Link to comment Share on other sites More sharing options...
CMS Author Craig Vecchione Posted August 4, 2014 Author CMS Author Share Posted August 4, 2014 Beringer is owed a lot of money I'm sure but there are other companies holding the bag for GC, Fender being one of them as well as many, if not all, of the top tiered vendors. I'm sure their attitude is either keep shipping in hopes of getting paid or pull the plug (like Beringer), cut your losses and walk. Tough decision. As far as employees losing their jobs at GC, there are a number of people at the vendors who will lose theirs also if GC goes under, which it likely will. After Beringer decided to cut their losses I wouldn't be surprised to see others follow. If this happens GC's demise will be accelerated drastically. Just want to point out that GC made the break, not Behringer. Link to comment Share on other sites More sharing options...
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