“You don’t have to worry about the good retailers” Lee Anderton on why the recent spate of high-profile closures doesn’t mean that guitar shops are doomed
The last few years have been a brutal time for musical instrument retail across the globe. The enforced closures of the pandemic period might have been offset somewhat by a temporary boom in online musical instrument sales, but in many ways that shift just accelerated a trend away from brick and mortar stores that many retailers are still struggling to recover from.
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In the last five years we’ve seen Guitar Center enter and exit Chapter 11 bankruptcy protection, and scores of smaller retailers go to the wall across the globe, but things seem to have accelerated in recent months. Last year the legendary US music chain Sam Ash filed for bankruptcy and closed all its stores, and earlier this year Dutch retailer Bax Music filed for bankruptcy only to be saved by a buyout led by founder, Jochanan Bax. The UK has been hit particularly hard, with the loss of GAK earlier this year followed up by the shocking collapse of PMT earlier this month.
Lee Anderton is probably the world’s most well-known guitar shop owner. But the Andertons main man has been moved to speak out by the crisis of confidence that seems to have gripped customers in the wake of all this, and wants to reassure the world that guitar retail isn’t going anywhere.
“We’ve been getting all sorts of comments coming through with orders saying, ‘Please confirm that you’ve definitely sent this today, because I’m a bit nervous that you’re gonna go bust tomorrow as well’,” Anderton reveals. “So it’s really important, I think, that we put some balance back into the debate.”
The death of PMT – one of the UK’s most recognisable and largest brick and mortar music retail chains – has sent shockwaves through the UK music scene, and it was a loss felt by their peers as well.
“Every single day the team at Andertons comes to work – and it’s the same at GuitarGuitar or PMT or anyone – and their job is to convince customers to buy something from them, as opposed to one of their competitors. That is the job. And yet, when you realise that something has happened and one of those competitors can’t continue anymore… ultimately you have to take some responsibility for their downfall, and it’s a validation that we must be doing something right. But then also it’s a moment of genuine sadness and sympathy for the people who now have to find other ways to pay the mortgage.
“It is a weird one, especially in the music industry, because above everything else, everybody in it just loves guitars and music, and it’s an industry where there’s quite a lot of camaraderie.”
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Shop Talk
Anderton is at pains to explain that he has no special insight into what went wrong at PMT, GAK or any of the other retailers that have passed into memory over the last few years. But as someone intimately familiar with MI retail, and someone who has overseen a business that has, by his estimation, bounced back from the recent industry-wide downturn to almost the same level they saw during the Covid boom, he does have some feelings on where retailers that focused on brick and mortar might have struggled.
The enforced closures due to the pandemic are unsurprisingly one of the top culprits in this sad tale. “You just couldn’t have thrown a worse curveball, to a business with a large number of retail stores,” Anderton explains. “And then I think, honestly, it’s never recovered. I think Covid accelerated customers’ propensity to shop online, and probably accelerated what was going to happen anyway over a 10- or 15-year period, into a two-year period.”
Anderton’s point that it was always likely to happen eventually probably chimes with a deeper truth – and one that you probably relate with reading this. That the way people shop for things has changed dramatically, and it’s making it increasingly difficult for physical shops to compete.
“People like the selection and the freedom to shop online that bricks and mortar retailers just can’t compete with,” he admits. “I shocked myself with this stat, right? But if I add up the number of guitar amp and pedal products that you could order today on the Andertons website – I’m not even counting strings and cables, just guitars, amps and pedals – there are 14,000 different products. And 10,000 of them are in stock! How on earth is your average bricks and mortar store gonna get close to that? It’s financially not possible to have that kind of operation in every major city.”
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The Power Of Passion
And yet, Lee Anderton still owns a brick and mortar store. The Andertons shop in Guildford, UK continues to offer an in-person retail experience that, while being as well-stocked as any shop of its size could be, still has to work with the same limitations and drawbacks compared to online – so why does he persist?
“Anybody who’s in the music business, we’re fundamentally trying to enable people to make music somehow,” Anderton explains. “And that’s quite an inspiring thing to do. I’m still a complete sucker for getting a lump in my throat every time I see parents with their 10-year-old kid coming in and buying a starter guitar pack. We mustn’t take for granted what a profound moment that could be for that kid’s life, you know? And if they go on to be a superstar, what a profound moment that could be for millions of people!
“So I never want to lose that. And I suppose to a certain extent, I do think it’s slightly sad when you periodically see [UK supermarket giant] Tescos selling guitar packs at Christmas. I do accept that if it reaches a wider audience and gets more people playing, it’s a good thing. But do I really think that the best way for you to start your guitar playing life is chucking it in with a half a chicken and a pound of potatoes in your shopping basket? No, I’m not about that.”
As an online retailer first and foremost, however, the challenge is to bring as much of the good stuff from shopping in person onto a digital platform.
“A big part of the e-commerce offering at Andertons was to try to replicate the store experience,” Anderton reveals. “Because I do still think that the greatest experience that you can have in retail is in an amazing bricks and mortar store. Doesn’t matter what you want to buy, a really amazing store with amazing demonstration facilities, and a vibe, and a great sales person and great after-sales service… if that can happen, it’s amazing.
“But when in reality did you last experience that? It’s so hard to consistently achieve that experience. I certainly think that part of the reason Andertons has never opened a second store is that it’s hard enough trying to do it most of the time in one store, yeah, trying to do it most of the time let you know, let alone all the time in 15 stores.”
The way that you can bring some of that magic to the fore however, is by reflecting the passion, knowledge and engagement of the store staff in a digital sphere – for Andertons, the most visible way this is done is through the brand’s hugely popular YouTube channel.
“I always describe our social media stuff as our foot in the door,” he explains. “And also, if you come and talk to the guys at Andertons, whether it’s someone who’s just joined yesterday, up to me and some of the team who’ve been here for 25-plus years, you’ll see that the YouTube stuff is quite genuine. That is what we’re all really like. And I kind of feel it’s still nice to know that you are shopping with people who really care, you know? And I buy lots from Amazon, and I don’t necessarily have a bad word to say about Amazon, but I don’t suppose Amazon is as passionate about music and instruments as we are.”
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The Problem Of Choice
When talking about retail, it’s easy to forget that the people making the products have a part to play in all this. People assume that stores must be making huge margins, but in guitars especially this is not always the case. Anderton cites the example of a typical big-selling budget guitar, a Squier Classic Vibe Strat. With a retail price of about £379, Andertons’ margin on that guitar is around £50 – a hair over 15 per cent.
This might work if you’re selling these guitars by the hundreds, as big retailers like Thomann and Andertons surely do, but how does that work for a small local guitar store? If that guitar sits on the wall for a month or two, how much of that £50 profit is a shop going to actually make when you factor in the rent and other expenses accrued in the time it’s taken you to sell that instrument?
Another issue facing guitar stores is one of scale. It’s not an exaggeration to say that there have never been more products hitting the market in the history of guitar than there are right now. Anderton’s figure of 10,000 products is wild enough, but that scales up even further when you consider a mega-retailer like Sweetwater or Thomann. Thomann, for example, claims to have over 100,000 different products in stock and available for shipping from its cavernous warehouse in Germany at any time.
All this leads to a huge problem for brick and mortar stores, and even large chains. How can they possibly compete with the demand for choice that the industry has foisted upon them? Especially you have a thriving online guitar community that does a fantastic job of hyping and publicising these constant launches (and Guitar.com is absolutely part of that ecosystem, by the way), and driving a constant demand for the new hotness.
“Nowadays, you’ve got hundreds and hundreds of products in every manufacturer’s catalogue,” Anderton agrees. “You’ve got brands who are famous for making one style of guitar in search of more and more growth every year, going, ‘Let’s make other styles of guitar, or amps, or pedals, accessories.’”
It puts retail stores, especially smaller local ones, in an impossible position – because they just can’t offer the breadth of choice that the industry has created. “Any music store with less than 10 million quid to invest in inventory, you’ve got absolutely zero chance of being able to say to most customers, ‘Yes, I’ve got what you want today,’” he ruefully observes.
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Forward To The Future
Anderton acknowledges that there are huge challenges facing the retail sector in general, and music instrument sellers are certainly not immune to this. Brands are bypassing retailers and selling direct more and more, consumers are finding themselves with less disposable income, and the basic costs of running a business are increasing exponentially. But despite all this, Anderton is optimistic about the future of your local small guitar store – provided that lessons are learned.
“It’s a fruitless task for that music shop to think they’re going to be able to service the same kind of customer that one of the big guys will be able to service,” he insists. “If I was starting again today, I’d be diversifying, I’d be shying away from anything mainstream – I wouldn’t be stocking any new Fender, Gibson, PRS or Ibanez.
“I still think that a small guitar shop that really, really specialises in what it does can work. There’s bucket loads of used gear around now, so just get into that – buy used gear, give it a really good overhaul, sell it for more than you paid for it. There’s a business there. And find all the weird and wonderful brands that are making really cool stuff, but just can’t get their voice heard because the big brands make so much noise.”
And while there are still people who pick up an instrument, music retail will continue to exist in some form or another.
“Fundamentally, we have to hope that human beings continue to want to make music and enjoy listening to music,” he reflects. “There are all sorts of retail challenges, but fundamentally, young bands are picking up guitars again. Schools have consistently carried on offering music tuition. And you’re still the coolest kid in school if you’re the guitar player in the band.”
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