Daddy’s Blog

Anticipating a scarcity of displaying vendors and dealer attendees, we decided to cover the show in one day.  As you can see, there were no throngs of people to fight our way through, so one day just about did it.

There will be those who have already or will in the future try to spin this into a moderate success, based on orders placed or contacts made but in reality, all the right intentions, time and money expended on this show were, unfortunately, wasted.  I know that sounds harsh and even while saying it, I’m thinking about all the cool new products and the good friends I got a chance to see but still…..   So, speaking of new gear, here’s another sampling of what we saw.  Fender celebrated the 20^th anniversary of the Custom Shop with the debut of the Andy Summer’s Telecaster.

It’s no coincidence that Andy’s band, The Police, are currently on a reunion tour but it’s kind of ironic that they are appearing at Fenway Park this weekend for a much ballyhooed set of shows.  The Austin show also marked the grand unveiling of the next product in Fender’s EVH line, the re-emergence of the 5150, this edition a Mexican-made Series III.

They look and sound great, with an all-tube crunch that will satisfy many Eddie fans and will probably hit the street in the $2200-2300 price range for a half-stack.  Makes you wonder what will happen to the value of the American-made Peavey models of just a few years ago?  Fender was extremely active at this show with a slew of other new models, including the Avril Lavigne Telecaster, in some very affordable price ranges.  They did good here.

You can always count on Roland/Boss for a couple of exciting new products at these shows and even this one was no exception.  Short of reissuing the old Space Echo with all its tape funkiness, they did the next best thing.

The Boss RE-20 is a reliable digital replication of all the thickly textured sounds of the original Space Echo and should be a crowd favorite.  Roland has augmented the wildly successful Cube line of amplifiers with the Street Cube, an extremely portable amp/PA that features the right inputs, COSM amp models and runs on batteries.

This amp could revive the busking tradition all by itself!

Of course, our friends at Hoshino (Ibanez and Tama) followed up on their hot selection of new products at the Winter NAMM show in January with more exciting introductions in Austin.  We spoke earlier about the AIMM/Daddy’s RGR320 in blue but here’s the same model in a breathtaking red that really sparked our interest.

The painting process includes a base coat in black, an additional color coat and the whole thing is wrapped in plastic.  Before it dries, the plastic is torn away to reveal these beautiful designs.  The uniquely patterned guitars are due in October, look for them.  I had to include a shot of the Ibanez 650 PBAM just because.  This mahogany-bodied beauty with a polar burl top stopped me dead in my tracks.  Also due in October, the 650 is powered by Bartolini pickups and eq.

The “built to pro specs but priced at entry level” ImperialStar kit will soon be featuring branded Meinl cymbals.  The German-based cymbal company had been in partnership with Tama for a while but this is the first time the cymbals will be “properly” branded.

Finally, after introducing the mini- Mikro guitar during the holiday season in 2005, Ibanez has now inserted an amp in those cool, little guitars and they should be in Daddy’s by the holidays, a great stocking stuffer!  (Insert 020)

Okay, okay, so maybe there were some really interesting things at the show, but to add insult to injury, the world famous nightly migration of 1.5 million Mexican Free-Tailed bats from underneath the Congress Street bridge was barely visible because of cloud cover.  At dusk, swarms of the world-famous bats fill the air to fly up and down the Colorado River and consume tons of insects, thereby filling their little bat bellies and providing a great service to mankind.  It’s a spectacular sight but, unfortunately, on this night, one that we would miss.  So, as the sun sets over Austin’s Town Lake,

this is one cool city, the victim of a couple of poorly attended shows.  Summer NAMM says adios to Texas and it’s on to Music City, Nashville Tennessee, for next summer’s show.  See you then.

We’re here in rainy, deserted Austin, Texas awaiting the start of
the Summer NAMM show that will officially open its doors tomorrow (Friday, July 27, 2007).  The show returned to Austin this year, even after the lackluster attendance figures of last year, only to be greeted by the news that many of the industry’s largest companies (Korg/Marshall, Kaman, Line 6, Godin, Samson/Zoom, Yamaha, etc.) would not be displaying any new product at this year’s edition.  Upon hearing of this wholesale vendor defection, the dealers stayed away in droves, essentially driving a stake into the heart of Summer NAMM in Austin, Texas.  However, the show must go on, even in its diminished capacity and that’s why we’re here.  Well, that and the fact that AIMM (The Alliance of Independent Music Merchants) holds its semi-annual meeting at this show.  Daddy’s is a charter member of this group of many of the strongest independent dealers in the country.  Less than 10 years old, AIMM now represents the second largest entity of music stores in the United States.  As part of our membership in this group, AIMM has partnered with Ibanez and Fender to present this unique musical gear and we’ve got the first pictures.

Ibanez presents an RGR320EX available for the first time in custom blue arctic blue frost.  This 320 is powered by twin EMGs with an Edge II tremolo and shark tooth inlay.  Only 150 are being made, while only 120 of EW20MVENT are being made because of the scarcity of the African Satinwood used in the top.

Fender will be shipping out a couple of hot guitars, the 5760, a Mexi-Standard hybrid of a c-shaped ‘60’s neck with a two-tone ‘burst ‘50’s body, single layer white pickguard and vintage pick-ups.  This is the first time that Fender has ever made a guitar with different era parts.  The Standard Jazz Bass shown here features a custom Sierra Blue finish and will be available with the 5760 in October

The final piece of the exclusive Fender/AIMM/Daddy’s puzzle is another custom Hot Rod Deluxe.  This beauty features wheat-straw grille cloth, offset with wine red tolex.  A Celestion G12P-80 gives this amp a unique tone.  All this gear is scheduled to be exclusively in all Daddy’s stores in October.

New gear from the January NAMM show continues to show up, the Alesis DM-5 Pro kits and the even-newer Roland HD-1 electronic drum kit (a compact package perfect for apartment, tight rehearsal space but elegant enough for the living room!) have just arrived in the warehouse and will be in some of our stores by Thursday.  The Peavey JSX (Satriani designed) Mini Colossal also just came in, look for it at your local Daddy’s.  Finally, the hot Gibson Melody Maker in Vintage Sunburst (surprisingly, White had been the best selling color in the Melody Maker), have arrived, it’s cool and extremely affordable.

Even as we prepare to go to Austin next week for the Summer NAMM show, new gear that we first saw at the Winter NAMM show back in January is still now just hitting the warehouse.  Over the past few weeks, the Mackie SRM150, a powered 150 watt speaker/mixer combo that can be mounted on a mic stand and the M-Audio AV-40s, a updated  pair of great sounding 20w powered reference monitors have hit our Daddy’s stores after a long wait.  Initial reaction on both pieces is that they were worth the wait!

We just received our first shipment of the Yamaha NP-30 Portable Grand, a 76 key Graded Soft Touch ™ action, very portable piano (only 12 pounds) that will be a great addition to any keyboardist’s collection.  If you’re looking for a digital piano to take to practice, class or small gigs with the feel and sound of much heavier units, this board is for you.  At just $299.99, the NP-30 is an incredible bargain.

Any day now, the new Alesis DM-5 Pro electronic drum kit will be showing up.  With upgraded drum and cymbal pads (one additional cymbal pad for a total of three), a sturdier rack, still at a nice $599.99 price point, this kit should sell very well.  Expect to see it in Daddy’s stores by the week of July 30^th.

Industry News

Musical Merchandise Review (an industry publication headquartered in Needham, MA), released its 16^th annual profile of the American music dealer.  After a challenging retail year in 2006, the U.S. music store count declined by 3.2% and for the first time in lifespan of this survey, the total number of music stores has dipped below the 8,000 count.  The single biggest cause for the decrease was the bankruptcy of the 63 unit Texas based Brook Mays chain in July, 2006.  Specialty stores continued to suffer with keyboard/piano/organ stores retreating from a count of 768 units in 2002 to a current count of 328, a decrease of 57%.  Ouch!  A grand piano, anyone?

On July 9^th, Gibson Guitar Corporation announced that it had acquired the Canadian guitar manufacturer Garrison Guitar, based in St. John’s Newfoundland.  The company, started by a then-19 year old Chris Griffiths, recently reported close to $5 million dollars a year in sales but terms of the transaction with Gibson are not available.  Gibson did announce in their press release that they hope to increase Garrison production fivefold over the next 12 months to about 60 guitars a day with a retrofit of the current manufacturing facilities and creating 40 new permanent full-time positions.  Theoretically, this factory will be making a new line of under $1000 Gibson acoustic guitars.  Whether or not Newfoundland will prove to be an effective location for Gibson to provide their customers with a more modestly priced acoustic remains to be seen. Industry insiders speculate that Griffiths may have recently come under increased scrutiny from the Canadian government, who helped the young guitar maker initially raise 3.5 million dollar to get the company off the ground with secured government grants.  Officials in the Canadian capital Ottawa, supposedly were slightly miffed when imported guitars started to show up on the shelves with the Garrison name, probably not the way they wanted their money spent.

Griffiths did use some of that money to secure patents for his Griffiths Active Bracing System, a brilliantly conceived bit of technology that is an injection molded single piece guitar frame which can be constructed in 45 seconds.  A traditional wood frame can take as long as two hours to complete.  Besides the increased manufacturing efficiency of the Active Bracing System, the single-unit brace “allows for the resonance to have an uninterrupted path of travel throughout the instrument and provides enhanced structural stability.”  Gibson hopes to introduce this new line at the Summer NAMM show next week!

We leave for Austin this coming Wednesday (July 25^th) and will start our on-location reports from the show, see you then.

The news that the long anticipated selling of Guitar Center last week was quickly followed by speculation from all corners of our industry as to what will follow in the wake of this sale.  Bain Capital, which in the past has invested in other retailers such as Dunkin’ Donuts, Toys R’ Us, Burger King and others, won a Goldman Sachs led auction for the national retailer.

The total purchase price is valued at 2.1 billion dollars and GC stockholders will be paid $63 for each share.  The deal is expected to done by the 4^th quarter.  Will there be changes?  While no one can deny the success of GC’s strategy, after going public in 1994, of attacking the major markets with large format stores followed by the acquisition of Musician’s Friend, there have been some bumps in the road.   The general 4^th quarter slowdown of musical instrument retailing in 2006, some erosion of profitability at Musician’s Friend (due to competitive pressures and increased advertising costs) and the slow start by the recently acquired Music and Arts division have presented some challenges for the company.  The questions that are being asked are, will Guitar Center spin off less successful parts of the company and/or close under-performing locations?  Will the deep pockets of Bain allow GC to continue its planned expansion into smaller store format?   While the national retailer has made its mark by introducing large store formats into a mom and pop small store dominated industry, can they successfully make the transition to a different scale of retailing?  The next 12-18 months will probably reveal the answers to some of these questions; it should be a very interesting time and will be closely watched by the entire Musical Instrument retailing industry.

On Tuesday, July 10^th, a class action suit has been initiated on behalf of GC stock holders.  The press release from the law offices of Brian Felgoise stated the goal of the lawsuit is to  “seek the highest possible offer for the public shares.”  The case is currently pending the Delaware Court of Chancery and has been filed against “certain officers and directors.”  Another interesting twist.

Catching up on some old business.  We had mentioned that the Federal Trade Commission was conducting an investigation of business practices in the MI industry and it was thought by some that the probe was aimed at the industry’s widespread use of Minimum Advertised Pricing (MAP) policies.   Just last week (June 28^th), the U.S. Supreme Court voted 5-4 in favor of a ruling that stated that “it is not necessarily unlawful for manufacturers and distributors to agree on minimum retail prices.” a decision that should strengthen the use of the MAP policies.  It’s important to remember that manufacturers cannot control how much retailers or distributors can charge for any product but only on the advertised prices (print or electronic media) of these products.  Stay tuned to find out if this recent ruling will change the FTC’s inquiry into our industry practices.

Daddy’s will be attending the Summer NAMM (National Association of Music Merchants) show in Austin, Texas later this month (July 27-29).  Last summer’s show was also held in Austin and although attendance was disappointing, NAMM decided to give one more shot.  Austin is a wonderfully musical town and an appropriate venue for this show, however, there’s one big problem with it.  You can’t get there from here (i.e. no direct flights and 5-7 hours of travel time) and many retailers from the east and west coasts of this country (hint:  where the populations are most dense) have decided not to go to the show.  Now, many manufacturers and distributors, sensing this exodus from show, have decided to join the crowd and won’t be showing up, either.  However, never one to pass up a chance to see some old industry friends, eat some good barbeque and to imbibe in a couple of Shiner Bocks, we’ll be there and  will be reporting back from the show on the gear that should be in the Daddy’s stores by the end of the year.  Watch for those on- the- scene reports coming up in just a few weeks.

MMR magazine and BusinessWeek.com were used as sources for some of the information in this report.