Profile of the American Music Dealer

U.S. Music Store Count Declines 3.2%

After charting a modest 1.4% increase last year, American music product stores declined by 3.2 percent from mid-2006 to mid-2007, according to MMR�s annual tracking of storefronts from coast to coast.

Thirty-seven of the 50 states saw a drop in total stores this year, while seven states booked increases and seven had no change in store counts during the last 12 months. Dropping below the 8,000-outlet mark for the first time since this Profile of the American Music Dealer report debuted in 1992, the U.S. retail sector entered mid-year with a total of 7,957 swinging doors.

Clearly, the seminal retail events of the last year was the bankruptcy of the 63-unit Brook Mays Music, which went Chapter 11 in July and liquidated soon after and the bankruptcy filing of Woodwind & Brasswind in November. As a mail-order operation, the Woodwind�s demise doesn�t directly affect the storefront picture, but the same cannot be said of Brook Mays. The chain�s down fall is apparent in the higher-that-average store declines in states in which the dealership was most active: Texas (-3.7%), Missouri (-5.9%), Oklahoma (-7.8%) and, tellingly, North Carolina (-13.1 %.)

Industry leader Guitar Center, in addition to acquiring the assets of Woodwind & Brasswind, continued to pace the industry in store openings during the year, fielding some 20 new primary, secondary, and tertiary-market stores. Other larger dealerships were largely quiet on the expansion front.

While product specialization has been a boon for some retailers, the number of specialty retailers nationally continues to shrink. After two successive years of 18 percent declines the Keyboard/Piano/Organ specialty universe again saw a 10.9 percent reduction in storefronts. All other specialty types also were down with the exception of Drums/Percussion which was even with the prior year.

7,957 Stores: What Do They Sell?

As this chart illustrates, the representation of the major product categories in U.S. music stores showed declines across the board from 2006 to 2007, with sound reinforcement registering the largest drop (-6.1%) and print music (-3.1%) having the smallest decline in store representation. Other categories largely mirrored the 3.2% drop in total U.S. stores from 2006 to 2007.

Percentage Shares by Product Type

Specialty Stores
The 1,615 specialty stores � retailers focusing on a single product category � account for 20.3% of all U.S. music products stores. The number of specialty storefronts declined by 102 units during the year, or 5.9%. The most striking trend is the downward level of Keyboard/Piano/Organ specialty stores, which declined by 18% in each of the last two years, and were reduced by 10.9 percent over the last year.  All other specialty store types except for Drum/Percussion also declined. Band and Percussion, which saw dip in storefronts of 11.6 percent last year, fared better in the 2006-2007 time frame, showing a decline of 2.9%.

State-By-State Breakdown