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Guitar Pedals – What’s with all the Stomp Boxes?

February 10th, 2013

On a recent business trip, I took along a recent edition of Guitar Player to read on the plane. In that issue they had a special section where they reviewed sixty guitar pedals. Sixty. Six Zero. Even at that, there were several well known brands that were not even represented! Every day it seems that there is a new boutique pedal maker out there with a new take on and old classic, and occasionally something really different. What is going on?

In the interest of full disclosure, UpFront Guitars does not sell many pedals. Honestly, I have found that it’s a bad fit for my business model, and I don’t do well with them. To be taken seriously, you need to carry lots of brands, and there is a lot of competition from the eBay used pedal market where players are frequently dumping their latest experiments in sonic bliss. Also, many of the boutique builders sell direct, so there you are carrying somebody’s pedal and they are selling against you. In that case why have dealers? But this is not about sour grapes, it’s about why there are so many darned pedals out there. I have a few theories:

Low barrier to entry – As I have said in previous writings, it’s not hard to get in the pedal business: Buy a die-cast box, a soldering iron, benchmark a few classic designs, and you’re in business. OK, not that easy, but a lot easier than making a guitar and much better certainty of sales. Pickups have become this way too. The raw materials are very easy to obtain, and boutique winders have sprung up all over the place. Most of these “noveau” builders are not breaking any new ground, so it’s hard to say what they are doing other than saturating the market. This is not to denigrate the folks that are really turning out new imaginative product, but it’s hard to argue that there isn’t a ton of me-too stuff out there.

The 2009 Recession – The recession in 2009 was bad for a lot of things, including musical instrument sales. The only category that grew during that time was effects. People still wanted to buy some type of new toy, but had to watch their wallet. Stomp boxes fit the bill even when guitar and amp sales were tanking.

Modeling Amps – Is it just me, or does it seem as though the craze over modeling amps has blown over? Aside from really sophisticated stuff like the Fractal, Eleven Rack, and Kemper, many amps have sort of gone “basic” again. Possbily buyers have decided it’s more flexible to have a couple pedals than it is to buy a box of so-so “amps” in the form of a sterile sounding combo amp. To me, the affordable modeling stuff has typically sounded blah to occasionally awful, and most players settle in on one or two sounds anyway.

Active secondary market – This is also known as “used pedals”. Don’t like what you just bought? You can probably get 60% of your money back in ten days on eBay. Most players don’t keep pedals long enough to wear them out, and the Next Greatest Thing is often for sale used a few weeks after they hit the streets. It’s not nearly so easy to sell your amp if you don’t like it, and shipping it can be daunting.

Cheaper than Amplifiers – The amp market is pretty terrible these days, especially at the upper end where even some of the well-known names are struggling to move product. There are also lots of “used” amplifiers for sale dirt cheap as dealers try to unload inventory while trying to respect MAP pricing (which further depresses new amp sales). Plus look at the well known amp builders that are now making pedals: Mesa, Bogner and Rivera to name a few. All three of these companies make expensive amplifiers, and the market for high end stuff is limited (and an imported “value” line can hurt your image). If you cannot sell someone an amplifier, sell them the essence of your amplifier in a box. While fundamentally I maintain that a great amp is worth your hard earned money, it’s tempting to do a pedal-makeover to breathe some new life into your old rig. I’m not sure that a pedal will make a bad amp good, but the economics are tempting. I have carried some of the Rivera pedals, and while they are good they violate an important rule: Price. Keep it under $179 and it’s almost an impulse buy. Price it at $250 or higher and buyers look elsewhere.

The theory of “What the heck” – What other product promises the ability to transform your sound at such a low price? Plus installation could not be easier: Just plug it in. It’s not like a pickup, which requires some dis-assembly, soldering, and the risk that it won’t sound good (some makers like Seymour Duncan now offer solder-less pickups to lower the skill barrier). Pedals are like a new diet shake or a magic wrinkle cream that promise so much for so little effort. It’s actually marketing genius; and has certainly been a boon for magazine advertising, stores and e-tailers.

But do stomp boxes really transform our playing enjoyment, or just give us a shiny new object to chase instead of playing our guitars? The music industry benefits from this constant “pedal churn” but does the player? To me, pedals are like pizza: Most of them are pretty good, and rarely are they awful. Yes, there are some “bad” pedals out there, but I don’t think it takes a lifetime to find a few pretty good ones to form your core sound. My board has been pretty solid the past three years, and is mostly gain pedals, one modulation pedal, and a reverb. Some were carefully chosen and some were just cheap, like a BBE Minder Bender because I needed chorus for a couple songs and did not want to spend a lot. So what’s on there now is:

  • Peterson Strobe Tuner
  • Lovepedal Kalamazoo
  • JHS Charlie Brown
  • Voodoo Lab Sparkle Drive (ten years and running)
  • BBE Mind Bender
  • Lee Jackson Mr. Springy Reverb

That’s it, and I used my own “brand” of Evidence Monorail patch cables. Plus I don’t have any more room on the PedalTrain. I have been messing around with a Voodoo Lab Giggity, which is not even an effect so much as it is a parametric EQ of sorts. But I like it, and if it stays, something may have to go.

I do like other pedals: A have a Fulldrive that I used to play a lot, and I like a lot of the Wampler stuff, but it’s not as if they get me to some new musical place. If I don’t like the way I sound, it’s probably me and not the pedal. If your new pedal makes you want to play more, that’s great. If it just makes you want to re-arrange your board instead of playing, that’s not great. For a person who sells gear, this is dangerous advice. But I guess there is no quick route to being a great musician, and pedals are not the musical equivalent of Rogain. Playing, playing with other people, and optionally playing live are what really makes us better. Everybody has heard a great guitar player in a guitar store making a $150 guitar sound good. There’s a reason for that: Practice, and the gift of talent. We can’t all be gifted, but we can all practice.

Fender: 25 Years at the Ensenada Factory

October 24th, 2012

We sometimes like to take pleasure in kicking the big guys when they are down. GM, Goldman Sachs, Microsoft…the Yankees. Seeing the seemingly invincible struggle sometimes makes us little guys feel better. In the world of guitars, certainly the two electric heavyweights Fender and Gibson have had their share of troubles. Fender has been in headlines for their struggling profitability and the much publicized IPO that never happened (probably because the Private Equity people realized that the stock value just wasn’t there). Gibson of course hit the papers with their government raid and fines related to the improper importation of restricted hardwoods. I still maintain that if everyone else in the industry can manage to buy fingerboards legally, then Gibson most likely was doing something not kosher. Also there’s just something about a $3500 guitar with lacquer drips, but that’s for another day.

Fender however recently hit a real milestone with the 25th anniversary of their manufacturing facility in Ensenada, Mexico. What is so great you say about celebrating a factory that makes guitars in Mexico rather than in the USA? The importance of the Fender Ensenada factory is that over two decades ago Fender realized that as global competition would continue to drive manufacturing to low cost countries, that is was better to control their destiny rather than subcontract it. The Fender factory in Mexico now employs over 1000 people and occupies over a quarter million square feet, turning out electric guitars, acoustics, and amplifiers.

It would be nice to think that this manufacturing could have stayed in the US, but by nature guitar making is labor intensive. And with 80% of the worlds guitar market being under $600, nearly all this market is going to be fulfilled by suppliers in low cost countries. In a recent Music Trades article about the Fender plant, it was pointed out that in 1990 China produced 0% of the world’s guitars. Now China produces over 70% of the world’s guitars, but only 45% of the total market value. In other words, they make a boatload of inexpensive guitars. And most of these China factories don’t have names that we would recognize. They are contract manufacturers that produce guitars and then brand them with names that we do recognize. This is how much of the consumer product world works, but it’s hardly the image we like to have of guitar making as a craft.

Fender deserves a lot of credit for investing to maintain control over their intellectual property, their manufacturing processes, designs, materials and product quality. Building a factory is a huge undertaking, and it would have been much less expensive for Fender to just find a factory to build their designs. However, when we stop manufacturing, we also lose touch with the skills and technology to actually create the product. Product designers who know how their designs are made invariably design better products. Take a guitar pickup for example: Here is a product where several companies can take the same wire, magnets and bobbins but all get different results. It’s the process of making the pickup as much as it is the actual design. When manufacturers and designers work together, products and quality naturally improve at a faster rate. The pace of product development increases too, and it takes less time to bring a new product to market. Although the factory is in Mexico, it’s a day trip from the Fender HQ in Arizona. They are in the same time zone and the same continent, and it makes a difference.

As a lot of people already know and appreciate, a “MIM” (Made in Mexico) Fender is a good quality product. It’s not a cheap guitar; it’s a guitar that delivers top value for the price point. As the factory continues to increase its capabilities, the price point and value of the MIM products  will continue to rise. From the standpoint of brand equity, the Fender MIM products are largely embraced by the guitar playing public, and while some would rather be playing a true USA Fender, nobody is being done a disservice by playing an Ensenada product.

Whether it is Foxconn producing the iPad or whoever actually makes Nike footwear, there is increasing separation between the creators of products and the manufacturers of the products. Some pundits will argue that owning the design is the only true value, and that manufacturing is strictly a matter of finding the lowest cost source. That’s how we get Barbie Dolls with lead paint, and why it’s hard to buy a Toaster Oven that will last more than three years. Guitars are not appliances or toys, and should not be built that way.

Fender has its share of troubles, and for some purists the only real Fender guitars are those made before 1965 when a man named Leo ran the company. But for people of normal means, Fender Ensenada products are the pathway to owning what are arguably the most recognizable shapes in rock and roll. Kudos to Fender for keeping the dream of rock and roll alive.

Where are the good rock radio stations?

October 10th, 2012

If you’re like me, you still listen to a fair amount of radio. For me these days, it’s mostly news via Public Radio, but I still attempt to discover new music by listening to the radio. With radio stations so tightly formatted to a certain genre, it’s quite a chore. Also radio ownership is highly concentrated these days, which leads to musical conformity and homogenized playlists. A quick check on Wikipedia showed that just three companies own more that 1600 stations across the US. Check it out here:

http://en.wikipedia.org/wiki/Category:Radio_stations_in_the_United_States_by_owner

This is why the FCC is supposed to limit things like concentrated ownership of radio, TV and newspapers within a given media market. Yeah, right.

But, all is not lost. Between independently owned and college stations, you can still find new music created by new bands, old favorites, and artists that fell off the charts years ago but still ply their trade with integrity.  So I’m going to try an experiment here: If you know of a good radio station that plays a wide variety of new and old rock, blues, R&B….and they stream over the internet, send me an email with the link and I’ll post it here. Just send it to sales@upfrontguitars.com and I will put the link on this blog page. Half the fun of music is hearing new music. So let’s start a movement for good radio and spread the word. Here is my first submission:

WXRV “The River” in Haverill, MA: www.wxrv.com

 

 

Will Country Music Save the Electric Guitar?

October 8th, 2012

If you’re a person of a certain age — let’s say over 35 — your definition of rock music is probably very different than somebody who is currently in high school or college. For the first forty years of rock music, the primary driving force was the electric guitar. From Scotty Moore backing up Elvis in the 50’s to Kurt Kobain in the 90’s the electric guitar was inseparable from the music.

But as rap, hip hop, house music and the generic category of dance pop came to dominate what was left of Top 40 radio, electric guitar and the guitarist started to fade into the background. In the realm of pop music, how easily can you name current popular figures that are known for playing guitar? Unless you are into really hard rock, metal, or ply the pages of Guitar Player it’s not easy to come up with many names. John Mayer perhaps, Dave Grolsch (sort of) but in general it’s a short list. Now of course you might do better if we include College Radio or Adult Contemporary, but in the world of Pop it’s pretty slim pickings.

Go back to any decade, and rock on the radio just oozed guitar. You name it: Chuck Berry, Beatles, Stones, Hendrix, Deep Purple, Steely Dan, Lynyrd Skynyrd, Bon Jovi, Aerosmith, Doobie Brothers, Def Leppard, Pearl Jam, Van Halen….you name it. I’m not even touching on the whole Hair Metal era which essentially revolved around pointy guitars and spandex.

Not all of this was great music, but it all featured guitar, and kids who listened to this music wanted to play guitar. What do they want to play today? Their Laptop? When a lot of today’s music can be sampled, programmed, or mashed, creating music may not involve playing an instrument at all.

For certain, I’m sounding like an old man right now, but this can’t really be good for guitar companies. If the music young people are listening to doesn’t inspire them to play guitar — or they don’t even hear a guitar — guitar sales are going to suffer. It’s not news that companies like Fender and Gibson are struggling, and while some of this is obviously related to the economy, popular music is less guitar driven than it used to be.

Which brings us to the potential savior of the Electric Guitar: Country Music. Go ahead and laugh, but if you want to hear a half-decent electric guitar player on pop radio these days, chances are it’s going to be in a country band. Country music has largely taken the place of rock music on Pop radio, and as it evolves it becomes increasingly less country and more like just like rock. Take away the vapid lyrics about dirt roads, beer and cut-off jeans and bands like Rascal Flats and Jason Aldean are churning out arena rock just like the old days. If you go back a decade or so, producer Mutt Lang (AC/DC’s, Def Leppard) practically created the genre of arena country with his then-wife Shania Twain and her blockbuster album Come on Over.

Country music even has its own guitar heroes. Guys like Brad Paisley and Keith Urban manage to be both really hot players and popular music figures. And in general, some of the most talented bands in popular music are the country bands. Say what you will about the actual star performer, but the bands backing these singers are sharp as a tack. And if you check out their gear you’ll see some interesting stuff: PRS, Mesa, Victoria, Marshall, and of course Brad and his Dr. Z’s. It’s a far cry from the Tele’s and Tweed that defined country music for years.

So if Country Music is the current curator and preserver of electric guitar, should we be concerned? If actual people are playing real guitars in real bands with other instruments but it also happens to be country music, do we look down in scorn? If you feel that way, take some Brent Mason, Vince Gill or Albert Lee and call me in the morning. Talent runs very deep in country music; it’s just that like most forms of music it gets processed and homogenized for popular consumption, often ending up like musical equivalent of Twinkies.

There are quite a few things that bug me about country music, such as the beer-and-wings lyrics, lack of tempo change, and such glossy production that any real energy is often sucked out of the song. But imitation is the sincerest form of flattery, and what you have these days is a winning formula, with dozens of also-rans capitalizing on a trend. That’s not so different from any phase, whether it’s the British Invasion or Disco. There are always the creators and imitators. So while much of what is on country radio these days sounds totally packaged and phoned-in, that been true since to dawn of pop music.

I’m not trying to convince anyone to become a country music fan, and it’s certainly not my favorite format. But within any category of music there is true talent, and our job as music lovers is to look past what the “industry” is trying to sell us, and dig deeper to find the people that are truly making music. Country music is a big tent that runs from the traditional to essentially today’s version of pop-rock. In many ways it’s keeping the electric guitar in mainstream music, and if only for that, we rockers need to at least give it a deeper listen.

 

 

 

 

 

In Defense of Good Guitar Amplifiers

April 13th, 2012

This is somewhat a continuation of an earlier blog regarding the benefits of a good guitar amplifier, owning more than one amplifier and also the general state of amplifier sales.

Over the past decade we’ve witnessed a couple significant trends in amplifiers. One of those trends was the rise of the boutique amplifier business. This trend may have peaked at the during the recession of 2009, but there has been an explosion of small builders making everything from faithful vintage reproductions, to interesting and creative new designs. The boutique boom may have also reinforced the realization that 15-30 watts is typically more than enough for most jamming or club situations.

The rise of digital modeling amplifiers was not originally a topic that I was going to address, but it at least deserves honorable mention. Early pioneers like Johnson and Line 6 drove the concept that a player could in theory have many historic amplifiers in one cabinet. This has become a permanent fixture in the amplifier world, culminating in high end audio products like the Eleven Rack and the Fractal Axe-FX. Some of these products have frighteningly good emulations, although typically the more “processed” the sound you are emulating the better they perform. Getting a Fractal to sound like The Edge is more satisfying than getting it to really sound like a Deluxe Reverb.

The other significant trend over the past 5-7 years is the rise of really inexpensive tube amplifiers. In my opinion, once the boutique industry proved that simple low-powered amps were a great way to get wonderful tone at reasonable volumes, manufacturers with access to low cost sourcing took that concept to overseas with the idea of offering much lower cost with the same features. If you think about it, a 15 watt amp with three tubes and four knobs is not technically hard to make, and in China it’s also incredibly cheap to make. So now instead of paying $1500 for a hand-wired Tweed Deluxe clone, a player can go to their local big box and get a 10 watt all-tube Chinese screamer for $299.

So the trend these days is that players are buying fewer amplifiers, and they are also buying cheaper amplifiers. In 2008 the average price paid for an amplifier was about $340, and there were 1.1 Million sold. In 2011 amplifier sales were 900,000, and the average cost had dropped to $255, 25% drop in average price (in contrast the average guitar price over this period dropped only 9.8%). This is a significant trend over a short period of time, and higher end amplifier builders must be feeling it. While the drop in average price may be partly due to post-recession caution and less disposable income, I think there is also a perception that, “Hey, it’s got tubes and it’s a grand less, why spend more?”

Why indeed. Guitar players incessantly focus on their axe, but often treat the amplifier as an appliance that will instantly transform the wonderfulness of their guitar into beautiful music. It’s almost as if you could plug into your washing machine and essentially get the same tone. Truth be told, the amplifier is at least 50% of “your sound,” maybe more. Heck, the just the speaker in the amp is a major determining factor in how you sound.  Amplifiers are inherently complex and every component — transformers, capacitors, type of tubes, layout, speakers, component values — has a contribution to the overall quality of your tone. Every manufacturer has a cost target they need to meet, but there is no way that the $299 amplifier manufacturer pays the same attention to detail regarding component selection than the guy making the $1000 amplifier does. When a manufacturer chooses to save $1.50 by installing an inferior speaker or transformer, they risk making an otherwise reasonably good product into something flat and uninspiring.

With amplifiers it’s not just the labor that costs money, it’s the hardware. A worker in China can solder just as well as a worker in the USA. They can probably fabricate a cabinet and apply tolex just as well too. It’s not as important that you can solder, it’s what are you soldering. Is it a transformer made by people who really know what makes a quality product optimized for guitar, or is it a transformer that went out for bid and was chosen because it was $.15 cheaper?

Historically, China’s edge has of course been labor. And while the landscape in China is changing, in general labor has been cheap, and the majority of their costs are in the materials. When it comes to manufacturing, they are much less sensitive to labor cost as they are to material cost (in many ways the complete opposite to the US). When a Chinese manufacturer needs to reduce cost, there is much more leverage in reducing material cost than labor cost (this is changing too: See Indonesia). The plain truth is that China is a very good place to assemble product. The risk in China is not the ability to assemble quality products, but the quality and reliability of the material supply chain. With material cost being king, there is intense pressure to squeeze every cent out of material cost, often to the detriment of product quality.

The point is that component quality and selection is critically important to the sound qualities of a guitar amplifier, and  the costs of these materials are essentially the same regardless of where the product is manufactured.  The $299 guitar amplifier is not using the same components as the $1000 amplifier, period. The parts really matter, and at this time, most of  the top quality amplifier components are not being made in Asia. Can you assemble a “kit” of top quality components and ship it to China for assembly? Sure, and you will pay to ship the components to China, and then you will pay to ship the amplifier on a boat back to the US. It will still cost less, but probably not a lot less, and that amp will have a pretty large carbon footprint.

Ultimately, good amplifiers cost money, and good amplifiers matter just as much as your guitar. I’m not suggesting that in order to be happy and have good tone you must spend at least $1500 on an amplifier. But to some degree cost and quality of sound are inextricably linked. Take the Vox AC 30 for example: They are made in China and run anywhere from $999 to $1500. Vox/Korg is taking advantage of lower cost labor, but they are also not skimping on components, including shipping British-made speakers to China. These amps are made in China, they are not junk, but they are also not inexpensive.

A quick story: We were recently displaying at a guitar show that had a lot of custom builders in attendance. So this was not an amp show, it was a guitar show. But some of these builders were displaying guitars that cost thousands of dollars, but all they brought to demo product were $150 10 watt modeling amps. Result: They sounded like garbage. What were they thinking? On the other hand, we brought a couple Rivera heads, a Rivera 1×12 cab (and to be to “PC” a Rivera RockCrusher Attenuator). When somebody tried any of our guitars, people stopped and listened. The guitars sounded good because the amps were good.

Playing through a really good amplifier that melds with your tone and style is a transformative and immensely satisfying experience. Choosing an amp needs to be taken seriously, and placed on the same level as choosing your guitar. You may even find that one  amplifier — just like one guitar — does not adequately address the range of tones that you are looking for. However, once you find an amplifier that speaks to you, you may find that the constant urge to experiment with pedals, pickups and guitars suddenly becomes much less urgent.

The Fender IPO – Good News for Guitarists?

March 11th, 2012

The announcement this past week that Fender is releasing its Initial Public Offering  may sound like the American Dream come true. After all, isn’t it the goal of every company to someday go public and cash in big? That’s the image of an IPO anyway. However, not all IPO’s are glamorous get rich stories, and the numbers behind the Fender IPO are not all that rosy.

Disclosure: I am not a professional financial analysis, these are just my own observations from my experience in business over the past 25 years.

In rough terms, Fender had $700 million in sales in 2011 and a net profit of $19M. That’s an improvement from 2010 when the company posted a $1.7M loss. But a net profit of $19M on sales of $700M is a return of only 2.7%. If a 2.7% profit ratio sounds rather unexciting, that’s because it is. Whether private or public, a 2.7% profit ratio is concerning. In a private company while there might be pressure from an investor group (if there is one) their is are requirements to make the company’s performance public. Actually, the financial performance of many privately held companies may not be that great in Wall Street terms. To do some degree if the boss is happy, then everybody is happy. The true financial performance is known only to the person or group that controls the company

Once the company goes public, the financial performance is there for all to see, and of course stock price is closely tied to financial performance. Going public is a great way to raise capital, but the company is obliged to show its dirt laundry. How many investors can you attract with a 2.7% net profit, unless you have plans to do much better. And soon, because it’s Wall Street and they hate to wait.

The second issue with the Fender IPO is debt. The company has $700M in sales, but also about $240M in debt. The stated goal of this IPO is to pay down about $100M in debt, and the balance is for operating capital. There are a couple concerns with this: First, that’s a pretty high debt ratio, and as with any debt there are interest payments on the debt. Also, if the company is selling stock to raise additional operating capital, it could have a cash flow problem too. Cash flow essentially is: Are you taking in money fast enough to cover what you are paying out every month. Debt servicing costs, high inventories, and of course the pace of sales can all have dramatic affects on cash flow. It’s good to sell lots of stuff, but it’s cash flow that determines whether a company lives or dies.

The third factor is the role of Private Equity Capital (PE), in this case an organization called Weston Presidio. Weston Presidio is a major investor in Fender, with about a 40% ownership prior to the IPO, and plans are to retain a similar level of ownership afterward. Weston Presidio is not in the music business. They invest in everything from Restaurant Chains to Movie Theaters to Fender. The goal is to invest in a company, “help” it become more profitable, and then exit that company hopefully at a substantial gain. It’s not very romantic, but if done properly the investors make a lot of money.

Being “helped” can sometimes cause the company being invested in quite a lot of pain. Often a PE group will buy into a company with some amount of their own cash, and money they have borrowed. Once they have control of the company, the company will borrow money to pay the PE group back, effectively putting the company in debt. This is the classic case of Guitar Center, which was bought by Bain Capital and is now loaded with over a billion in debt. Guitar Center loses money every quarter because the cost of debt servicing wipes out its profits. Here is what Moody’s said about Guitar Center last May, “A Moody’s analyst concluded that growth in sales, comparable store sales, and profits will not be sufficient to trim the company’s approximately $1.6 billion debt load to a more manageable level.”   So while I don’t know for certain, part of Fender’s debt could be a by-product of Weston Presidio’s involvement. Companies may seek out PE because they need cash to fund R&D, expand their product lines, or maybe the founder just wants to sell out and go fishing. But PE companies are rarely in it for the long haul, the desire to cash out at a profit in 3-5 years can place an enormous amount of stress on the company.

One last quick measurement of a company’s overall health is their revenue dollars per employee (Total Sales/Number of Employees). A good rule of thumb for both manufacturing and retail organizations is a number somewhere in the range of $300 – $400K. If it is a privately held company, the Revenue per Employee (RPE) number can be substantially lower as long as the major stake holders are in agreement on the definition of success. However if the company is publicly traded, Revenue per Employee — and more importantly Earnings per Share — are critical metrics. Publicly traded companies are all competing for investor dollars, and weak performance metrics makes it hard to attract investors and depresses the stock price. Using 2010 data, Fender’s RPE was $223K. Gibson’s is even more worrisome at $99K, while some Pro Audio companies like Harmon and Audio Technica are $331K and $556K respectively. Of course we are not taking margin into consideration. If you have very high margins you can be financially successful with a lower RPE (because you keep more of each dollar you earn). Still, a low RPE is not a good sign, and Fender’s 2011 net income of $19M strongly suggest that they have a problem with margins, debt, overhead, or some combination of the three.

WHAT DOES THE FUTURE HOLD FOR FENDER AS A PUBLIC COMPANY?

Fender has some strong assets: Good market share, tremendous brand recognition, famous artists that endorse their product, and two of the most classic guitar shapes in history. But it’s clear that they are not that financially healthy. It’s likely that conditions will improve as the economy continues to strengthen, but they have basic issues of profitability and long term debt. Weston Presidio likely wants to get out in the near future — at a profit — which means that the company needs to be attractive to investors so that people will want to buy stock. To compete for investor dollars Fender will have to demonstrate that they can increase their profitability: Lowering costs, raising prices, and/or reducing debt. Increasing sales will help too, provided that sales can be increased without increasing fixed costs. It’s that simple. People invest in company stock because they they think the value of the company will increase. The big question for music lovers is whether increasing shareholder value result in better product. All options are likely on the table: Outsource more products to low cost countries, use less expensive materials, raise prices, or sell off under performing brands (Guild, Charvel, Hamer, etc). Some Guitar-Loving White Knight could always come to rescue and infuse Fender with both cash and a love for the products and the company history. Or a group of demanding investors could force the company to implement severe cost cutting measures in order to improve profits and increase stock value. Unfortunately, the latter scenario is more likely, since if there was a White Knight with deep pockets, Fender would have not needed to go public in the first place. Let’s all hope for the best, but even for the optimists the prognosis is lukewarm.

The Great American Guitar Show – Valley Forge PA, Day 2

November 15th, 2011

After a satisfying dinner at the Iron Hill Brewery in Phoenixville — which turned out to be a great non-mall dining hotspot — and some much needed rest, we were back at it on Sunday. The crowds on Sunday appeared to be just as good as the day before, with several repeat visitors. The Big Sale never materialized that day, but we were still turning people on to the ValveTrain amplifiers, JHS effects, and taking a couple G&L and Godin orders.

With it’s great tone and feel even at low volumes, the ValveTrain Trenton continued to be the most plugged into item in the booth. Many discovered that the amplifier was so perfectly voiced that flipping the “Raw” switch (which bypasses the tone stack) was the hot ticket. While the Blackface sound is the more often considered to be the Holy Grail of Fender sound, the warmer, bouncy, grainy sound of the Trenton made several Tweed converts.

However, for those looking for more punch and headroom, the Bennington Reverb had several fans in its corner. Louder and glassy with a faster attack, the Bennington was heralded by several experienced players as nailing the Best of Blackface. And will several Blackface amps on the floor that day, this was easy to verify.

The pedal that came between the guitar and amplifier most often was the JHS Charlie Brown. Honorable mention goes to the JHS Morning Glory but that sold so fast most people never heard it (note to self; bring more). With lower output pickups, the Charlie Brown elicited great on-the-edge breakup that just screamed Ronnie Earl or SRV. With a G&L ASAT or Godin Icon meatier distortions were available, but in either case they were articulate, natural and transparent. For this generally Blues/R&B oriented crowed, the combination of the Charlie Brown with the higher headroom Bennington was that “sound in your head” of grind, sweat and sparkle all at once.

The Great American Guitar show will visit the Philly area again next summer, and our plans are to stuff the Minivan to the gills again and make the trek down from Massachusetts. Where else can you get a ’55 Gold Top and a Felix the Cat Guitar all under one roof?

 

The Great American Guitar Show – Valley Forge PA, Day 1

November 13th, 2011

We’re down here on the outskirts of Philadelphia for our first Great American Guitar Show in Valley Forge, PA. We came down Friday during the day in order to unload and get set up for the show on Saturday and Sunday.

While we have no way of actually knowing, there have got to be at least a couple thousand guitars here if not more. It’s surprising how much vintage stuff is on hand: Dozens of 50’s Les Pauls, 50’s and 60’s Strats, 50’s Teles, and enough vintage Les Paul Jr’s to make any Keith Urban fan jump for joy. I’m kind of LP Jr. Double Cutaway freak, and for between $4K and $9K I can have my pick of at least a dozen. The topper is a maple top burst 1960 Les Paul for $175K. Hmmm, house or guitar, house or guitar.

Action at the UpFront Guitars booth was pretty good, with a lot of people drawn to the Godin Icons, No-Top ASAT Special, and the ASAT Honeyburst Classic S. The Emerson pre-wired control assemblies were a popular item too, and of the pedals JHS drew the most attention. Our Clear Blue ASAT HB left the building, and I’ll eat my hat if somebody does not walk out with an Icon tomorrow.

Being a guitar show, most of the attention was focused on guitars, but the updated ValveTrain Trenton and Bennington amplifiers received many complements. The new Trenton with its larger cabinet, improved front end and tube rectifier was just stunning. Warm, sweet, with a nice bounce to each note, it was a real honey. It effortlessly developed great tone at low volumes, while the higher headroom Deluxe-inspired Bennington wanted to be opened up a little more than show decorum would permit. We’ll be taking a video on Sunday with the Trenton and our Angry Angus Tele. Michael from Cliff’s Guitars (Wilmington DE) is going to help us with the demo, as frankly after hearing him play we realized we should stick to selling.

Speaking of players, Joe Bonnamassa was also seen walking around the show, possibly looking for something to add to his already extensive collection.

If you are serious about guitars, and especially if you dig the vintage stuff, the Great American Guitar Show is a must-do.

The Southern Connecticut Guitar Show 10/30/2011

October 31st, 2011

We just got back from the Southern CT Guitar Show held this October 30th in Fairfield CT. This was the first time UpFront Guitars was at the show, and unfortunately it coincided with a freak winter storm that knocked out the power to over 500K residents. Needless to say turnout was a bit light, but kudos to the folks from the Fairfield Guitar Center (not that Guitar Center) who organized the show. As always, my brother Neil was their to help haul the gear, work with customers and assist them in trying out product. We had a lot of new G&L and Godin guitars on hand, but most of the emphasis and attention this show was on accessories such as pedals cables and pre-wired control assemblies. So while not a windfall, we met a lot of local musicians, guitarists, and an outstanding guitar maker that deserves special attention.

OTIS AND THE HURRICANES – On the performing side, local guitar hero Chris Cross (not that Chris Cross) stopped by to check out our gear. Chris fronts the blues/roots band with the great name of “Otis and the Hurricanes”. I don’t know Otis, but Chris is a really nice guy and fellow Tele fanatic. Chris bought one of our Tele pre-wired control assemblies made by Emerson Custom Guitars (emersoncustomguitars.com) and swore he was going to solder it in as soon as he got home. The deal on the Emerson Tele assembly (ASAT for you G&L people) is that is uses the “vintage” wiring arrangement used by Gibson in the 50’s and 60’s. In the vintage wiring arrangement the tone capacitor is wired between the volume and tone pot. This differs from most Fenders and modern Gibson guitars in which the tone capacitor just acts as a low pass filter to ground. In the vintage wiring arrangement the effect of the tone control is a function of where the volume control is set. While at first this may not sound beneficial, it opens up a much broader array of tonal options. With the volume all the way up, the tone pot works one way, roll the volume down a little and the tone pot acts differently, and so on. My Les Paul Jr. is wired this way, and I rarely play the guitar wide open. There are far better and more interesting tones to be found working both controls and finding that sweet spot.

In addition, the Emerson pre-wired assembly adds a “volume mod” that makes sure the highs don’t die out even when the volume control is turned way down. Essentially a little R/C (resistor/capacitor) network, the volume mod is a high pass filter that also bleeds through a small amount of full range signal regardless of the the volume control setting. In short, the high frequency roll off inherent with any volume pot is cured and clarity is retained even at low volumes. I’ve done this little trick to my own guitars for years, and for about a buck, Torres Engineering sells the “Famous Treble Bleed” which is essentially the same thing. If you’re buying a G&L from UpFront guitars and want a treble bleed, just say so.

DGN GUITARS – My brother has been telling me about Dan Neafsey and DGN Guitars (www.dgncustomguitars.com) for quite a while, sending me photos of his latest work, and generally gushing over his stuff. I got to meet Dan at the show, and besides being impressed by his easy-going modesty, I was also blown away by his guitars. Dan does everything: Carves the neck, does the frets, the entire finishing process, and even winds his own pickups. In his spare time he knocks out an amp or two. One of the cooler guitars on hand was his take on a double P-90 Singled Cut guitar that was actually semi hollow but no f-hole. Besides being very light for a mahogany guitar, the relatively low-wind DGN P-90’s had a crystal clarity and shimmer that was from another world. Plus with volume and tone controls for each pickup (wired the vintage way, see above) the tonal range was immense. With both pickups on, you can have a field day just exploring the nuances and interactions of various volume and tones settings.

As I mention earlier, I am a long time sucker for anything Tele-esque. Dan brought along a stunning baby blue T-guitar with his own P-90 and Tele bridge pickup mounted in a Joe Barden Tele bridge assembly. The back of the neck was a satin smooth figured maple, the rosewood fingerboard had expertly finished vintage frets, and the opaque blue finish was glassy but also clearly just enough. Plugged into one of our ValveTrain Trenton Amplifiers and the DGN Tele just poured forth with classically husky-but-clear neck tones, and the bridge pickup was twangy and sweet If it hadn’t just snowed it would have been Mint Juleps on the porch. So while I didn’t sell any guitars that day, the blue Tele came home with us.

If you haven’t guessed it by now, Dan really knows what he is doing. And if you don’t need a new custom built guitar, Dan also is capable of doing just about any type of guitar or stringed instrument repair. If you are not in the Fairfield Country area, it’s more than worth the hassle of shipping your prized possession to Dan.