Best Buy and Guitar Center - WTF?

[PowerTube]

I realize that there have been other threads on this, so it isn't exactly news to most of you, but I have to say that I'm a bit blown away by this whole concept. A couple of months ago, as I was leaving the Guitar Center in Knoxville, I happened to look up and see the sign on Best Buy's building that said, "Time To Rock - Musical Instrument Store Now Open."

So being the naturally curious lad that I am, I had to step in there and see this for myself. I honestly expected to walk in there and see the same sad little section they had always had with First Act guitars and drums for the kiddies. I was wrong. They have an entire section of the store dedicated to musical gear.

Now here's the shocker: They're in the SAME building as GC and selling the SAME gear! No joke. Gibson, Epiphone, Line 6, Marshall, Fender. My former brother-in-law said that he heard a rumor that Best Buy, at least the one in Knoxville, is buying out GC and they're going to knock out the wall that separates them. I haven't been able to confirm this.

So do any of you know what's going on? Has Best Buy bought out GC? If so, is this nationwide or just a few select stores? If it's true, will Best Buy also carry those awesome Jackson JS series guitars and Squier and Epiphone starter packs like GC does now?

[Jack Napalm]

News to me. The last I heard is that BB is scaling back its music operations from the plans they had.

[PowerTube]

News to me. The last I heard is that BB is scaling back its music operations from the plans they had.

Interesting. The one in Knoxville is no different, except they no longer have any Jacksons. I don't know of they stopped carrying them or just sold the ones they had.

[scotty]

Our new GC wasn't even a year old when they built the BB with a music next door. There should be some old threads on this when the BB music store rumors started.

[MetalHeadMat]

*Tear*

[dg]

GC is still owned by Bain Capital, afaik, and there's no affiliation with Best Buy as of now. Would Bain sell to Best Buy? I think they would sell any of their holdings to anyone if the price was right. Anything's possible now. There are going to be tons of retailers failing or being bought up.

[Vass]

dg is right- Bain owns GC, LBO'd them in 07.

http://www.mailtribune.com/apps/pbcs.../BIZ/903120335

Alot of these deals are getting a little ugly- The debt loads in many cases were structured to deal with more "moderate" environments. Obviously this ain't that. It does surprise me that their debt is quite so low- Once you get into the C's you're talking about a real tangible chance of default.

Typically the barriers to entry vs. Guitar Center would be rather high. They are the only national musical instrument chain left, they have good deals in place with distributors and they have a very strong web presence with MF. It would be extremely expensive for anyone to try to compete with them. Obviously having alot of existing locations would help any competitor get started, although I have no idea if anyone will be able to make $$$ doing it.

For everyone who thinks it's a horrible thing for the "mom and pop" store, I would say that ship has already sailed- Those that are able to compete in a Guitar Center world will be able to compete in a GC world with a big competitor. For gear whores, it's on balance a good thing- GC will get a price competitor who can roll merchandise in bulk.