Alembic and the separation from GC

[jetbass79]

Fender doesn't sell their entire line through GC because not all of the entire line turns quickly enough for it to make sense for GC.  GC is also a publically traded entity therefore, Fender does not own it.  The public does as well as stockholding employees.  Gibson owns Epiphone, owned 'em since '57.  Isn't this supposed to be a thread about Alembic and the separation from GC and not about whom owns whom?

[rockbassist]

Jet, you are right on all accounts. Gibson owns Epiphone, Fender does not own GC and this was supposed to be about the Alembic/GC relationship.

[811952]

John,
It just helps explain why things are the way they are.  I remember back in the mid '80s the Guitar Center in Hollywood having a dozen or so new Series Alembics at any given time.  It is sad to me that now, instead of carrying the best tools of the trade they carry those with the best profit profile period.  Fender controls GC.  Fender controls Epiphone.  Gibson doesn't own Epiphone, but they do own Kramer, Steinberger and Tobias (though Toby no longer seems to appear on Gibson's musicyo.com).  GC exists to harvest the greatest profit it can by emulating the WalMart retail model and selling the absolute least expensive gear available.  Stocking Alembic products doesn't fit that model.  That's why it's so important to patronize your local music vendor (or one of the independents like Bass Central or Bass Northwest), even at higher cost, lest one day nobody can afford to sell Alembic.  It really, truly, saddens me that this is what our economy and culture has done to the music industry in the United States.  If not basses and guitars, then computers (look at Dell) or televisions or long-distance service or radio stations (think Clear Channel).  It really is all about the money.
 
Alembics, on the other hand, are all about the state of the art.
 
John

[811952]

Next time you talk to him or her, ask your friendly Fender factory rep about it and I bet you'll get an uncomfortable explanation about why you don't really want to know, followed by a well, yes, we own many popular brands...  If you can convince me I'm wrong, I will freely admit it, but this information has come from too many legit sources (endorsees, vendors and reps) for me to not put some stock into.  Having said that, it totally blew me away when first presented with the notion.  It's kind of like cats and dogs living together...  
John
 
Edited to add that I posted what I posted because I think it's relevant to the discussion.  I don't intend to p*55 anybody off, especially not fellow Alembicians...  john
 
(Message edited by 811952 on September 15, 2005)

[dnburgess]

John F.
 
If you can convince me I'm wrong, I will freely admit it
 
If you are referring to GC's ownership - as previously pointed out, GC is publicly listed. There are only two shareholders with over 5% of the stock - both institutional fund managers.  
you can check it yourself by going to: http://moneycentral.msn.com/investor/
 
Key in GTRC (the code for Guitar Centre) and then click on Ownership in the left menu bar.

[adriaan]

Hm, I'm not steeped in knowledge of the stock market, but afaik not all stock is necessarily in the public domain, only the stock that gets traded. Not sure if all stock owners must be listed publicly.
 
Couldn't it be that GC hires business resources from Fender Musical Instruments?

[David Houck]

According to their history page, Epiphone is a division of Gibson.

[dnburgess]

I don't want to labour the point - but GC is NOT owned by Fender. Trust me - I do this stuff for a living. Of course they have extensive commercial dealings with each other - as one would expect of two leading players at different parts of the value chain.

[811952]

David, Adriaan, John, Dave -
I don't do this stuff for a living, so I trust what you guys have to say.  I do know from personal experience that corporate strings are often far less than obvious for many a reason.  The Epiphone thing may only be that Fender (or Fender people) own the manufacturing and distribution, or something like that, in which case what sounded clear and concise in my head wasn't clear or concise in my posting without me providing a context whose specifics I've gone hazy on.  I once knew the details but I don't anymore, but I'm going to try to contact a person who definitely would know all of this as it relates to Fender later today (when said person is awake) and get whatever clarity that person will not protest me sharing online.  In looking for a seemingly logical explanation to the music industry money trail, do keep in mind that Michael Jackson owned (still owns?) most of the Beatles' catalog and there is probably a reason why they don't sing Happy Birthday to you at Bennigan's.  I'll post what I can when I can, which should be later this afternoon.  This does all relate directly to why GC's business practices and Alembic instruments aren't a good match, but wasn't intended to hijack the thread.
 
Remind me to never post when I'm tired and stressed out (wife left for Morocco yesterday on business and I'm Mister Mom).
 
And Dave, it's abundantly clear that you never sleep...  
 
John
 
Edited to add that I figured I'd catch heck for referencing Honda owning part of Harley Davidson.  Anybody know if that's true?  Simply a curiosity, so feel free to email me offline..
John
 
(Message edited by 811952 on September 16, 2005)

[David Houck]

LOL!!!  John, I get plenty of sleep; but sometimes I wake up too early!
 
And I look forward to your friend's report.  I would imagine that Fender, being the giant that it is, has significant requirements in its contract with Guitar Center.  And it may be the case that such requirements literally constitute a degree of control over Guitar Center's inventory.  For instance, the contract may require a certain percentage of floor space be devoted to Fender stock, similar to how Coca-Cola's contracts with grocery stores require a certain percentage of shelf space for its products.  A grocery store in the US that caters to the general population can ill afford to not carry Coca-Cola products and therefore has to accept their requirements.  Similarly a mass market music store like Guitar Center has to carry Fender products and therefore has to meet Fender's requirements.

[lbpesq]

As the old saying goes:  
 
Don't believe anyting you hear and only half of what you see
 
Now everyone shake hands and go play with your Alembics!
 
 
Bill, tgo

[adriaan]

There was a story on Gibson forcing stores to pay for a rather large stock of instruments of Gibson's picking - take it or leave it, and regardless of the store size. Not sure how much truth there was to that.

[rockbassist]

With all due respect John, Fender does not own Epiphone, or any part of the distribution. Gibson owns Epiphone. Go to the Gibson website and check it out. The Epiphone Les Pauls even have the word Gibson on the truss rod cover on the headstock. GC sells products where there is a decent profit margin. The reality is, stores survive by selling low to moderately priced instruments to beginners and intermediate players and then selling to them again when they decide to trade up. Most players (there are exceptions) will never have the financial resources to afford a high end instrument. Most buy the brands they recognize based on what they see their idols use and what they see in ads. By the time a player is advanced enough to afford a high end instrument there is very little chance that they will be trading it. They usually hang to them much longer than intermediate players do. (Would you trade your Alembic?) Therefore there is little chance that a store like GC will see that buyer again. Trust me, I have worked in retail management at the store district and regional levels. Retailers sell what they can make money on and that's all. The average beginner and intermediate player has not heard of Alembic, Pedulla, Zon, etc. Therefore it's difficult for a retailer to move them. Now, open a beer, pick up your Alembic and GO HAVE SOME FUN!

[811952]

Okay, my information is old.  Fender was heavily invested in Musician's Friend, which GC bought five or six years ago when they decided to sell online.  It is also *believed* that part of that deal gives Fender a great degree of control over what GC carries, which is a win-win situation for both.  GC at that time was beginning to flounder due to a number of factors, a discussion of which can be found here: http://www.fool.com/dtrouble/1999/dtrouble990615.htm
It looks like Musician's Friend was in deep doo as well...
 
I haven't been able to reach anybody about Epiphone yet...
 
John

[smichaels]

Epiphone has been owned by Gibson since the late 50's. They have handled every aspect of Epiphone's business since then - manufacturing, marketing, and distribution.
 
(Message edited by smichaels on September 16, 2005)