California Dreamin’: MI Retailers Fight, Thrive in Especially Challenging Conditions
Lessons to be learned in portrait of a state that has seen the best of times, the worst of times
In September of 2006, $500 million was dumped into the California public school arts programs, allowing one band director to buy a new $3,500 tuba – a once-in-30-year purchase. Today that tuba gathers dust in silence because the state government’s harsh budget shortfalls caused cuts to the school’s music program, and the loss of the band director’s job.
Luckily that’s an isolated incident, but telling nonetheless of the overall economic climate in California. And while there is plenty of woe to go around these days on a national scale, The Golden State is particularly hard hit and MI retailers there are experiencing trials and tribulations that offer insight into how to survive and even thrive that retailers everywhere can learn from.
“California has been hit harder than many states during the national downturn, starting with a huge wave of foreclosures spreading to other sectors of the economy and leading to an unemployment rate among the nation’s highest,” reports the San Jose Mercury News.
“Things are really bad here,” confirms Torrance band director Tim Nail. “My sheet music budget was eliminated for the first time this year, and I think our repair budget will be next. Four elementary music teachers in my district almost lost their job, but public outcry changed the board’s mind.”
Nail says the difference between all the money available in 2006 and today’s draconian cuts have created a “yo-yo” effect. “We all got lump sums from the state to spend on instruments, which I did. But there was other money to be distributed over the next five years. This money could be spent in a number of arts-related ways, including salaries.” He’s not seeing evidence of that money and believes the funds might have been diverted to the general fund [see California Arts sidebar].
Day to day, he’s seen minimal effect of the recession so far. Nail is encouraged by other signs: he recently pitched the idea of a trip to the Bay Area to better prepare his Wind Ensemble for auditions, the cost being $450 per student. “Every single one of them is going.”
The roots of California’s problems are deep. “What has devastated music stores was when Proposition 13 was passed [in 1978],” Russell Kassman of R. Kassman Pianos explains. “That put fixed tax rates on houses and that devastated music education programs.” The poor sales of lower to mid priced pianos can be attributed to this because “few in their 20s and 30s has had any real music education background.”
Currently Bookmark, a music print shop in Pacific Grove, is doing little school music business because so many California music teachers got pink slips. “If music education teachers aren’t able to teach non-music subjects, they are in jeopardy,” says owner Marcia Stearns. Those certified only to teach music are either reassigned to another school or laid off completely. “I already know of two teachers laid off, two being reassigned. One district in Monterey that started with the equivalent of nine music teachers has ended up with four.”
For Jeff Simons of Watermelon Music in Davis, one of the worse decisions the state legislators have made in response to their economic crisis was to raise the state sales a full point to a whopping 8.75 percent. “Because of this, the state is losing millions because it’s driving people to the Internet [to make their purchases] even more,” he says. “There’s more incentive then ever to buy online. It’s a misguided approach.”
While housing prices have fallen in California, commercial property is still high, especially in places like Silicon Valley. “We’re feeling the effects of the economy every day,” says Ryan Stohs of Lemmon Percussion in San Jose. “In our business and our location it’s particularly challenging. We live in a high rent district where the cost of living is higher, and that includes our rent. Other shops around the country pay a quarter of the amount of money in rent as we do, and that makes it hard.”
MI retailers are reacting to the crisis in various ways. Several are cutting lines because of some manufacturers’ buy-in demands, which some say are ignoring the economic hardships. “Some companies are acting like there’s nothing wrong,” says Stohs. Almost all are taking a serious look at how they use the Internet.
And there are opportunities, too – opportunities to try new promotions, new lines, and even expand. “With the economy being bad, it’s actually been a fabulous time to open a new space,” says Kimberly Bower of Ventura’s Pulse Percussion, who recently doubled the size of their space and increased their product offering. “So many other retailers are going out of business we’re getting flat wall for little or nothing. Manufacturers who used to have a minimum buy-in of 10 sets to get on their ‘A’ list have reduced that number to two. Vendors are also thinking out of the box and doing training sessions – I think the smarter ones are catching on that if they want to sell their instruments, they have to take a different approach.”
The downturn in the economy has affected Patrick Balakian of Patrick’s Music in Fresno, but the upside is he’s getting more people coming in to get their instruments fixed. “I guess it’s no different than the clothing industry – folks are getting old things fixed rather than buying new.”
Here’s a look at retailers throughout the state…
Jeff Simons literally grew up in the business – his father was a Kaman rep and he traveled with him as a kid. He moved to Davis to attend college and get a part time job at a music store where he eventually became manager. “I decided to grow up [and move on], but when I put my notice in, the guy that owned it made me an offer to buy it.” So since 1996, he’s owned Watermelon and today shares ownership with Ron Cowden.
“We try to walk the line between being the hip rock and roll store and the family-friendly rental center,” Simons says. “Davis is an artistic community, and because of the university, it’s a blessing that we get thousands of new college students every year. We are also actively maintaining good relationships with the private teachers in town and that pays off.”
Acoustic guitars are one of their strongest areas, and they do particularly well with the Canadian lines – A&L, Godin, and Seagull. Electric guitar lines Ibanez, Fender, and G&L are all good sellers. Their band and orchestra offerings include brands such as Jupiter, Yamaha, and Buffet. “One thing we have picked up recently is P. Mauriat horns, and they are doing very well for us. And on the orchestra side we discovered a little company called JR Music and they are bringing in nice, quality instruments, mostly from Eastern Europe, and they are well-priced.” Percussion-wise, Pearl, Tama and Gretsch all do well.
Eight years ago when a print store in nearby Sacramento closed its doors, Watermelon moved heavier into print. “Print music has been great,” Simons says. “It seems like it’s one of those area that never sees a drop. Hal Leonard and Alfred both have dealer Web sites that make doing automated orders easy, and that helps a lot. I can create and upload a $800 print order in two minutes.”
Last year his area was going to eliminate the elementary school music programs. They got involved. “The public raised the money to give the program another year – 100 percent private funds. The following year the community voted for a tax for the art program.”
February was so bad they had to consider a staff reduction, but March popped back up for them and they’ve been able to maintain. But a side effect is inventory: Christmas was so soft they still have plenty, yet manufacturers are wanting orders. “Some understood, some didn’t,” he shrugs. It has caused Watermelon to look to more private branding, particularly for guitars and tuners, and currently they are looking at private branding straps.
Internet. They have been pursuing linking their Internet site with point of sale systems offered by some music publishers. They try to stay in touch with their regular customers via e-mail. Their site overall gets a lot of attention and because co-owner Cowden is Microsoft certified, and Simons works with design and copy writing elements.
Going forward. “Marketing is one area we’ve been looking at,” Simons says. They used to do conventional advertising in local magazines and print publications, and things like underwriting the local public radio stations. “We decided to cut conventional marketing business to zero.” Instead it all now goes to in-store promotions: concerts, master classes, and special events. They are working with vendors on this and most are excited to get involved, he says. Now they are doing up to three events every month. “They are a lot of work, but they are so much fun and customers really appreciate them.”
Outlook. “We all need to look longer term,” rather than looking for short, quick answers. “If we do that, things will get better and stay better. For me, it seems the worse is over. Folks are getting a little loser with their pocketbook. I’m looking for the best.”
The Horn Shop
Bob Stauffer played music throughout school, and majored in music in college. In 1977 he went to work for California Musician’s Services, where he met Harry Siverly. Siverly, too, started playing music at an early age and played through college. Just a few years later, in 1980, Stauffer and Siverly purchased the business, and changed the name to The Horn Shop. Over the next decade it evolved into a retail shop as well. Both still play music in area bands.
Today they have eight full time repairmen (four year-round), and serve over 100 schools. Their shop is 2,600 square feet and about 80 percent of their business is repair. They stick to selling brass and winds and related accessories. “We’re the biggest Getzen dealer on the West coast,” Stauffer says. “And we’re one of the main dealers for Cannonball, and we do really well with them. We jumped on board with them about 10 years ago and that turned out to work well for us. They are a dealer-minded business and support us 100 percent.” They also do plenty of business with Conn-Selmer, Gemstone, and Buffet.
“We’re staying afloat here despite the economy, though we’re starting to see some problems with school budgets,” he says. “However we’re still riding on the state’s $500 million grant [for the arts in 2006]. Some districts haven’t spent all the money, and a lot of schools in the area have a sad inventory of instruments.” He is hearing that school’s repair budgets may be cut, cuts that could be drastic.
The private teachers they serve still seem to still be maintaining.
Internet. The Horn Shop sells some things online from time to time, but right now they are rebuilding their Web site and considering doing more selling online in the future.
Going forward. Fortunately, the retail side of the business is gravy and Stauffer says he’s relatively confident that they will be maintaining their regular business, repairs. They have a national reputation for repair with professionals with Los Angeles and San Francisco orchestras trusting them their instruments. That said they are looking into doing more in the rental business next year and stretching into including sheet music. “Right now we don’t do either, and if we do, we’ll have to hire another person.”
Outlook. “There’s always going to be music – you can’t live without it. We’ve survived through cuts in music programs several times, so this current situation is nothing new. It’s just a little more serious then normal. Business is not great, but good. I’m positive about it.”
R. Kassman Pianos
Founded in 1979, R. Kassman Pianos has built its reputation on German-made pianos and features Blüthner, Steingraeber, Sauter, Haessler, Perzina, and Ritmüller pianos, plus Story & Clark. Founder Russell Kassman has long been a part of the San Francisco area music scene. The store itself was in San Francisco for 26 years before moving to Berkley where parking and accommodations were better suited for Kassman’s desire to serve his customers better.
Kassman was managing director of Beckstein America from 1987 through 1993, during which time he was also appointed by the city’s mayor to be part of a council to develop a sister city relationship with Berlin. “Because of my experience with German pianos, we’ve positioned ourselves as the experts in that area and we emphasis the high-end portion of the business,” he says. “Our customers include [Apple founder] Steve Jobs, the Goldman family, the pianist for the San Francisco Symphony Orchestra, and others. We also restore pianos, including Steinways.”
He reports a good January, with February and March overall a little flat, but bouncing back in April. “It’s been a seesaw,” he says. “Generally I’d say we’re a little slow overall, but for the times [we're good]. And while the lower-end is virtually non-existent, the higher end is still maintaining, thank goodness.”
He adds that he’s talked to others in the business, and feels relatively lucky. Perhaps one of the reason’s he’s particularly upbeat is because contrary to conventional wisdom, during the 34 years he’s been in the business he’s always done better when the housing market is weaker than when it was stronger. “I think when people aren’t moving, they are thinking more about buying furniture and fine German pianos.”
Internet. “Newspaper print advertising is a waste of money today. They are gone and any dealer who is consistently using the newspapers hasn’t been looking at market trends. I haven’t advertised in the newspaper here for six months.” (He does still advertise in concert programs and local magazines, however.)
“We use our Web site to alert our clients about happenings in our recital hall – concerts, master classes, recitals, and events like that.” An e-mail was recently sent about a new design for Ritmuller, for example.
Going forward. While the Bay area is one of the hardest in the state, he’s not slashing prices. “We’re emphasizing added value. We’re saying it’s the best time to buy as you can get more instruments at a better value. Also, in the last six months the U.S. Dollar’s value has fallen over 10percent, and that lowers the cost of our German-made pianos.”
Despite the general consensus that the piano portion of the market is getting especially hit hard, Kassman is upbeat and optimistic. He does say he has been approached by an increasing number of manufacturers asking him to take on their lines. “Right now we’re close to adding one or two additional lines, but we can’t do a good job for everybody, so we’re being selective.”
Outlook. “I may be wrong, but I believe we’re going to tumble along for a while, but then I’m hoping we’ll see some improvements in the fall.”
Marcia Stearns was “sick of working for other people,” and in 1994, opened a performing arts bookstore in the small town of Pacific Grove, near Santa Cruz. But her customer-driven approach led to an evolution where today it’s almost exclusively a print music store.
“We do some gifts, but that is because we are a supplier to some local vendors,” she says, stressing that she rarely dabbles in the cheaper gifts, but does well with the nicer, better made products. “The best thing about gifts is they are not fixed prices. A print book carries a price of $12.95 and while you can mark it down, you can’t mark it up. But with unique and popular gift items, you can do some creative pricing.”
Stearns has long practiced a philosophy of getting out of the store and going to the customer. Many of Bookmark’s products have long been seen at the annual Carmel Bach Festival. She also participates in the Music Teacher’s Association of California every year. “In the early days, half my [annual] income would come from the four days of that event.”
|California Arts Council to MI: Get Out of Your Store and Into School Board Meetings“The first advice for anyone interested in music education advocacy is to communicate with the schools,” says Mary Beth Barber. “Talk to the principle and find out what is happening for money slated for the arts.” Sit in on school board meetings, and bring your most enthusiastic music education boosters with you. When parents and community leaders make the case for music education in the schools, there’s at least a fighting chance for it. “All politics is local and all school funding is local, so go to the meetings and ask for what you want.”
The recession has indeed affected all the state’s arts, says Barber, who is communication director of the California Arts Council (CAC). Big corporations that typically give meaty donations and grants to arts, like say the symphony, are closing their wallets. This has a trickle down affect for MI and “we haven’t seen the worse yet.”
The one-time $500 million for arts provided in 2006 had for the most part been spent, but she adds that there was an ongoing funding pool of just over $100 million provided for arts education – meaning pay for arts teachers and to provide training for general teachers in the primary grades to be able to do arts training. “That funding has been decreased, and what has been provided to the school districts is called ‘categorical.’ Right now school boards may redistribute funding that is categorical.” This means money meant for arts education could be diverted for basic budget needs.
And what may surprise, not only is the CAC itself not the most well funded organization in the nation, it’s dead last. “We have the lowest amount of money to support the arts per capita in the nation – 50 out of 50,” Barber says. The budget is $5 million a year, a mere quarter of what it was a decade ago. She says $3 million comes from state citizens who opt for an art license plate, $1 million comes from the state government, and the federal government kicks in another $1 million.
Something else California MI dealers can do to help long term is get involved with the CAC’s artist in school program, which gets professionals to work with school-aged children during or after school. “Figure out how to be the best advocate for the arts you can be.”
While they don’t have a lot of money for funding, some does exist. She encourages all California retailers and interested in to sign up for their newsletter that comes out once a week and lists funding and grant opportunities, and arts jobs. “And if anybody has any recommendations on anything, I’m happy to take suggestions!”
For more information go to www.cac.ca.gov.
Otherwise, she serves a lot of the area’s private music teachers including piano, strings, and voice. Naturally she sells a lot of methods and classical repertoire. Not surprisingly she continues to emphasize service, and not just on the meat and potato items: “We’re known for our ability to research print music, and we’re very good at it!” she says.
She continues to lower expectations for business with school districts, saying out of the four in her area, she considers only two healthy.
“Last year was weak,” she says bluntly. “It was so bad that in January I decided to give it one more year, and if things didn’t improve, consider closing the store. Our summer activities, convention sales, big sales were so down last year – and we barely made it through Christmas, which had no activity at all. Next December I’ll look at it all again.”
One thing helping her is keeping a leaner inventory and relying on publishers to deliver smaller quantities of product quicker than ever before. “Alfred and Hal Leonard can turn orders around in three days, and I like ordering from them like that rather than having a big supply on hand,” Stearns says. “This has come a long way in 15 years – everything is so much easier. Alfred has such a smooth system that they are shipping in 24 hours.”
Internet. “I was one of the first people online, though I didn’t keep my site maintained.” She currently has plans to rework it and update it.
Going forward. “I don’t have the room to start offering lessons, unfortunately. I can’t justify expanding into other [MI] fields that we’re not experts in. We’re really good at print. We know how to find things, and our credibility in this area is incredibly high.” So doing what Bookmark Music does only better is the focus, and this includes keeping the same amount of titles but lower quantity. “But we’ll be looking to expand into more outside events.”
Outlook. “We are really excited about our upcoming summer events. Otherwise, if the economy stabilizes and people are taking lessons again, then I’ll have customers.”
World of Music
World of Music is a full line store that has a history going back to the early 1970s. Currently owned by Russ Bate and managed by Larry Sweet, daughter Patty Sweet has been with the operation for 26 years (brother Chris also works there).
The store is surviving considerably well. Located in an upscale area, the housing prices haven’t really dropped. The quality of the schools continue to keep the housing prices stable. They are also buoyed by a large influx of Indian and Asian Americans, who bring with them a culture that emphasizes music making, says print music manager Patty Sweet. “It’s so important to them, and fortunately they are very involved,” she says, adding that they are also able to keep the loyalty of longtime customers.
“Our business has not slowed down – if anything, it’s picked up,” Sweet says. “We’re seeing people that we’re not use to seeing. We’re thinking people are staying home instead of going on vacation, and spending money on [music making] instead.” But they have noticed that schools in the area have cut back. What has helped is music teachers have stepped up fundraising efforts to keep music programs strong.
“We sell a lot of Yamaha instruments, particularly their student lines – Yamaha is by far the top seller. They make a darn good product, and the intonation of their woodwinds are especially impressive.” In addition to Yamaha guitars, they sell a good deal of Takamine. They’ve recently added Boulder Creek guitars, which make the Solitaire, and they’ve moved quite a few of those.
Their lesson program is a major part of their business as it “moves a lot of books.” The operation has 12 lesson rooms and many teachers provide lessons for a great deal of kids five days a week. Some of the teachers have been teaching at their location for 20 years.
They market through sending out coupons through those Value Paks, which generates new business, and give teachers 10percent off print and 20percent off accessories.
They do have competition and are concerned about school bids that include saxophones for $200. “Those hunks of junk hurt all of us – they are hard to play and you can’t repair them.”
Internet. “We’re a small store that’s not really up to date with technology,” says Smith. “We have a typewriter in the office and still use it. No Web site yet, or inventory control [system], but we know our product and move a lot of it.”
Going forward. “We’re more merciless now with products that aren’t moving,” which means cutting their prices and getting them out of the store. They are putting in less big orders, and more smaller ones.
Outlook. “As long as we keep up with sending out coupons and carrying a good selection, keep up with our relationships with teachers, we’ll do okay.”
The Music Village is a full line store with two locations in the San Jose area. Since 1964 they’ve been serving the community, including a lot of teachers and students. “We do a lot of teaching,” says owner Joe Teixeria. “At our main store, we do about 500 lessons a week, at the other about 400. After that, we do a lot of band rentals.”
They carry most of the major lines with an emphasis on Conn-Selmer and Yamaha, plus some Buffet. “We have most of the Cannonball line, and just recently we added Stephanhouser saxes – just a few units and they are working out. We’re doing pretty well with Cannonball and Yamaha. Also Buffet – more so now since their new MSP pricing.”
Specialty instruments are also found in their shop, including harmonicas, accordions, autoharps, concertinas, and ukuleles. They are doing a lot with ukes lately.
“Sheet music is a big part of our business because not many places in the country have the kind of selection we have,” Teixeria says. “We have all the major [print publisher] players here, and we focus on piano teachers. Sheet music continues to be steady, which these days is good. It’s already at an increase from last year.” He added that some of his piano teacher customers, while a little down, are not concerned that the recession will affect the amount of people wanting to play.
“The rental business has been okay. We did a lot of institutional sales because of the [2006 arts] grant, but this year that has mostly dried up.” He has heard of schools in his areas diverting money slated for the arts being moved to general funds accounts.
Right now he’s not seeing a huge effect of California’s budget crisis, but he suspects he’ll see serious cuts in his area, including pink slips for band directors, next year. “Ten or 15 years ago, all the schools had elementary school music programs and those are down with some not even having any at all.”
Internet. “We’re thinking about doing more with it, but I think that’s a ways down the road yet,” Teixeria says. Currently they have a basic site that shows their locations and most of the products they carry. They e-mail customers occasionally about products, and do a little ecommerce, but he admits they don’t work it enough to make it worthwhile. “We work with Yahoo and Google search programs and that allows us to keep up and get exposure. And we try to monitor new customers as far as how they heard about us. Not a lot say it’s from the Internet, for most it’s still word of mouth, but the number that come to us from the Internet is gradually increasing.”
Going forward. “We’re being more careful in what we spend and where we spend it,” he says. “We’re not necessarily looking to add anything new right now, and maybe we won’t do anything new to the store. We’re just being cautious. I don’t see any new items unless they are small things. Even with the Stephenhouser – we just are trying a couple to see how they work out.”
Outlook. “I think next year we can turn this thing around and start to go up again. We’ve already seen a bottoming out.” Though houses in the area that were selling for $750,000 last year are going for $500,000 this year in his area, he sees people financial adjustments will still include music making. “A lot of the people taking lessons here are doing okay – though the other day one teacher told me that a parent asked if they could take lessons every other week instead of weekly.”
Patrick Balakian graduated from Fresno State and taught in the Fresno and Clovis School Districts for years starting in 1963. He started the first school mariachi band in the state, and a marching band festival he founded 44 years ago in nearby Selmar is still going strong. After a decade of teaching, he decided he could contribute more to a wider number of students by opening a music store in 1977.
Today Patrick’s Music has the largest music school in the Central Valley with over 350 students enrolled. Lessons are offered for most instruments including voice, piano, guitar, drums, strings, brass, winds, and even banjo and ukulele. They have a full repair department on site and do a good deal of business in print music.
|California Economics – Grimmer Than GrimJobless rate is at 11percent, expected to near 12 percent this fall, with double-digit unemployment continuing through 2011.
Nearly 280,000 jobs were lost in January 2009 alone.
All appreciation in home prices since early 2004 has been lost due to the housing bubble burst.
Exports are now lower than at any time since the beginning of 2006.
Of the top 10 metropolitan areas with the highest percentage of homes with negative equity in the first quarter of 2009, California had five on the list: Stockton (51.1percent); Modesto (50.8percent); Vallejo-Fairfield (46.5percent); Merced (44.4percent); and Riverside (42.8percent).
Three California cities – San Francisco, Los Angeles, and Santa Ana – made a recent list of the top ten cities in country where houses are the least affordable.
Sources: Mercury News; Zillow; NAHB/Wells Fargo.
“Now that I’ve been in the business for 33 years, I’m getting second and third generation customers,” Balakian says. “We get a lot of people through good word of mouth because we have a good reputation.” His main line of brass instruments is Jupiter, and the inventory overall is made up of entry-level products with a few step-ups. He stocks Musino violins distributed by Davit & Hanser, who happen to have a warehouse 10 miles away which allows him to keep his inventory low yet his customers well-served. He keeps mostly nylon acoustic guitars and Torch guitars, and for drums he prefers to stock Stagg. “For some reasons manufacturers don’t understand that if you want a young student at five or six to start playing drums, the only inexpensive bass drums are 20 or 22 inches. Stagg’s come with an 18-inch bass drum and any kid of any size can play on it. And they are very good. Most 18-inch bass drums are more expensive professional jazz level.”
Internet. Patrick’s Music has a basic Web site currently, but is in the process of setting up an online shop. So if it’s price a customer wants, they will be able to buy from him online; if it’s service, they will have to come into the store.
Going forward. “All we have is our customer service,” so Balakian is staying focused on that. Otherwise, he is instructing his staff to be more aggressive with every customer that comes in. “We can not in any shape, way, or form let a customer leave here without doing our best to provide him or her with what they are looking for. Sometimes we were lax about that but now we have to tighten up. We have to be better sales people and understand what makes a customer tick.”
Otherwise, in addition to lay away, they are open to a customer paying “in time.” For example, on a $600 violin, the customer writes three checks for $200 but post-dates two of them for later.
Outlook. “I’ve been in the business about 40 years, and there’s always a turnaround. This turnaround will be slower, but it will come. Traditionally, though, people turn to things that keep them closer to home. They get a kid guitar lessons instead of going to Disneyland.”
Lemmon Percussion was founded by Galen Lemmon in his garage in 1986, and moved into a storefront in 1992. In 2000 Ryan Stohs went to work for Lemmon and last November Stohs, his wife Leah, and Chris Trujillo bought the operation. When Stohs was asked if this economy is the best time to become a small retail storeowner he replied, “It just worked out for us timing wise. And on the plus side, it gave me a little more leverage in brokering the deal.” The first thing the three did was whittle down the staff to just themselves. “We didn’t want to commit to paying anyone.”
Modest in size, especially for a drum shop, Lemmon is a 1,500 square foot outlet that is a full percussion store and is a member of the Five Star group. Kits, hand percussion, band and orchestra percussion, and marching band products are found there. (In fact, all three owners have drum & bugle corps experience, and they all met in marching band. This positions them well in the community, which has a strong marching history.)
“We cater to everybody,” Stohs says. “And we have a school of music in store that serves 100 students a week. We cater to a large contingency of younger players plus cater to area pros, including some big names.” Most importantly, they stand for education, he adds, stressing that the three owners all have music education backgrounds.
“And we do quite a bit of sales in drum sets. We’re doing more in the world percussion lately because the economy has affected high-end drum set sales.” Gretsch is their top selling line, then Sonor and Tama. Locally there is Todd Plummer (TP Drums), a custom drum maker and Lemmon does well with his products. Cymbal-wise, Sabian is number one, but they also carry Zildjian and Meinl.
Internet. “We’ve expanded.” A few months before they bought the shop they had already committed to redoing the site. Helping is that Leah Stohs is redesigning it from home. Otherwise, they have an average of 10 to 30 products up on eBay at any given time, but “at some point we’ll get into real straight ecommerce.”
Going forward. “We’ve learned how to buy more appropriately, and we’ve dropped some lines because their buy-in requirements were too drastic,” he says. “Some of those [manufacturers] aren’t realistic. If we had more control over how much and often we bought, we’d probably do the amount of business they want to see, but with cash being tighter, it’s tough.” Searching for vendors who are particularly supportive and understanding is key. “We’ve committed to more hand percussion, particularly Meinl, and that’s been very successful for us. We’re also open to more consignment deals.”
They’ve consolidated their space and renegotiated with their landlord. A warehouse/music school above the store is now gone and they are doing more with less and being more creative with how they display. “Those kinds of things really help us get a good handle on our payables.” Otherwise, the focus is keeping their good line of credit, and good communication with their vendors.
Outlook. “I wouldn’t have bought the store if I didn’t believe things would get better. But we’re going to prepare for the worse. I think we can get through those, and we’re motivated to make it happen. But it’s day to day right now.”
Modesto & Stockton
Think you’re having a tough year? Kyle Barker, owner and CEO of Barker’s Music of Modesto, is dealing with a former partner who is on the lam for alleged embezzlement. There are two warrants out for the former partner’s arrest. “He went to the dark side,” Barker tells. “He stole about $14,000 in merchandise. He was nickel and dimming me for years – in charge of inventory, and was doing things like keeping trade-ins for himself.”
Still, Barker pushes on.
History: In 1968, Barker got a job as a salesman for the Sherman Clay Music chain, and transferred to their store in Modesto the following year. In 1974, he founded his own full-line music store. In 1981, he secured the Yamaha franchise. Despite the demands of his operation, he’s still an active player with his Kyle Barker Band where he derives a third of his total personal income.
He reports that his first quarter was okay, but April was a 40-year low.
“Modesto and Stockton have been hit very hard by the bad economy,” he reports. “The street I have been on for the last 41 years has a 30percent plus commercial vacancy, including a recently closed Mervyns. We also have a Guitar Center and Skip’s Music up the street.” But he adds that he has purchased all new computers and updated his software, and his allegiance to Yamaha products continues to pay off: “The complete line of Yamaha Clavinovas and pianos are the best products I have ever sold. The latest Clavinova line is fantastic.”
Otherwise he stocks student- and entry-level guitars; Line 6, Gallien-Krueger, Crate, and Centaur amps; his DJ offerings include American DJ lighting, CD, and mixer products; and P.A. gear found on his floor include Mackie, Tapco, Yamaha, and Centaur. They do installs and offer rentals and lessons.
Internet. Recently he had a beautiful Hammond CD with brand new 122 Leslie speakers, which he had been trying to sell in the bay area. “I put an ad on Craig’s list Saturday at 11 a.m., and my ad hit number 380 for the day,” Barker says. “That’s just in the East Bay Craig’s List. There are over 200 musical items every day on that list … it’s crazy, man. So with that, finding a game plan is getting harder and harder.” Their Web site is currently being updated to be able to do more with it.
Going forward. “When the consumer does their homework, we make the sale.” That said he finds the general consumer actually less informed than in prior years. “They take less time to investigate and have a tendency to trust the Internet completely.” Recent changes include discontinuing parts sales, and concentrating on larger ticket sales. “We will place our foundation on education – both teachers teaching music students and informed sales people education the public. Both jobs are getting more difficult as many people are overwhelmed with information. I personally am teaching and doing programs for civic groups and churches.”
Outlook: “The central valley will slow down and regress. It’s hard to see the sky is falling when you’re standing in a well.”
World of Stereo
San Francisco & Petaluma
World of Stereo opened its doors in 1988 and quickly established itself a premiere DJ store. Around ten years ago, they expanded into the space next to them when that retailer went out of business and dedicated that space to pro audio. Almost two years ago they opened a second location in Petaluma.
General store manager Jason Appel says they get a variety of people walking into both stores. “We serve the pros who have been in the industry all the way to the beginners who come in and have never touched a turntable before. It’s A to Z.”
They are authorized dealers for nearly all the related manufacturers including Mackie, Pioneer, Technics, JBL, and others. Also Gemini, Numark, Denon DJ products are found, as are lighting primarily from American DJ and Elation Professional. They do a good business in software, and are a big ProTools dealer and do well with recording gear. World of Stereo also deals in some keyboards and video equipment.
Appel says while some feel this gear is bought more and more online, his customers want to put their hands on their three floors of stock. “A Denon CD doesn’t feel quite like a Pioneer, and a Numark is not a Technic. It’s hard to figure out what is the best fit for you online.” Key to the operation’s success is the gear is out of the box where people can try it out. Also, the employees are all actively involved in music and all have expertise that that customers appreciate.
A dedication to honesty is a big part of their business plan. “I had a 16-year-old customer come in two days ago who had never DJ’d, and was looking at a top-of-the-line Technic mixer. I told him straight out that it wasn’t a good fit.” He showed him less expensive but great quality turntable, and he and his parents appreciated that. “I’d rather they get something for less money that is good and trade it up later if it works out for him.”
The economy is tough, but for them, it’s practically “what recession?” “Believe it or not, we’ve been okay,” Appel says. “One thing that helps is we don’t advertise – it’s all word of mouth. So we don’t have to raise prices for radio ads and thus our prices are low. We focus on customer service and our customers appreciate that.” From where he’s sitting, people are still buying. People are still going out to clubs and drinking (some suggest even more so), so clubs and DJs still need light and pro audio products.
Internet. They have an online store that has experienced some technical problems – severe enough to demand an overhaul, which they are currently doing. They don’t do any marketing through email because they found their customers don’t care for the unsolicited contact.
Going forward. They are going to be taking on some new lines, including Rhode microphones. Also they are actually looking at opening another location further south as they have dedicated customers driving up to two hours to come to their store.
Outlook. “We’re more optimistic then ever.”
Kimberly Brower’s road to MI is unusual: An emergency room nurse for 20 years, she left that position to care for a son who was wheelchair-bound due to a stroke. Private duty nursing left her “bored to tears,” but discovered the healing power of African drumming. “I fell in love with what I saw happening.” She and her husband Dean studied the art and decided to open Pulse Drumming nearly three years ago.
Tragically, in September of 2008, her husband Dean was killed when a Los Angeles metro train collided with a sports utility vehicle in Glendale, Calif. There’s a foundation established in Dean’s name which brings music and dance programs to special needs youth. Drummer and music educator Trey O’Toole has since become a co-owner.
“We’re on Ventura’s main street, and we just expanded our retail space from 2,800 square feet to 4,000,” Brower says. The expansion has allowed them to become a full percussion shop with kits in addition to hand drums. They also designed the store with the world in mind – literally: The layout is broken into continents and decorated accordingly. “It doesn’t look like a Guitar Center in any way, shape, or form,” she quips.
Bower and O’Toole are committed owners and educators, and have just returned from a special Sonor Certified Dealer program, and they are only two of six people who have come through the program so far. They are also the only retailers selling Square Drum products. Sabian cymbals are found in the store, as are Aquarian, HQ, and Vic Firth products. She adds that they try to have high quality products not found everywhere else.
“We carry a lot of Tycoon world percussion products,” she says. “Almost everything they make and they are fabulous to deal with. Their cajons are one of our biggest sellers.”
There emphasis on education has endeared them to the community – for example, if someone comes in to buy some drums but hasn’t played them yet, they insist they start lessons first. That way they are able to assess their needs and interests and sell them right product later. Also, since she doesn’t have a long history in the business, she doesn’t know the “rules” – like women aren’t percussion customers, particularly older ones. Don’t tell her that, because she’s too busy with her monthly “Ladie’s Night” which is introducing percussion to women in their 40s. It’s wildly successful. “They come in and learn and have fun,” she says. They also offer family night drumming, and she suspects they are the only operation in the country teaching kit drumming to people with special needs. (Their work in this area has put them in a position to receive some grant money.)
Internet. “Kimberly designed our Web site herself and it is a powerful tool,” O’Toole says. Their connection to west African drum builders have allowed them to sell unique custom drums.
Going forward. “We continue to put the emphasis on education,” O’Toole says. “It’s a consequence of what we do and the appropriate decisions we make, as opposed to being focused on just getting money in the cash register. We’re will continue to respond to the community – and that means symphonic, marching, country, and heavy metal players in addition to hand drumming.”
Outlook. O’Toole says they are focused on accentuating the positive, and ignore the bad news on television and in the papers. “We don’t look into the dark corners, because that gives [the darkness] power.”
Kenny Williams started Kenny’s Music about 15 years ago in a little ocean town in Orange County. Ken’s wife Kimberly told MMR that “Kenny had come off tour with a band and sold a couple of his real expensive guitars to start the store here in Dana Point.” Beginning the store with just “14 students in a converted office space,” they’ve now grown the business and recently moved to a more visible store right down the street.
Kim told us that Kenny’s music is known for it’s music lessons saying, “we have seven teachers and quite a few very high end teachers here that teach all different instruments.” Although, guitar and amp sales seem to be Kenny’s strongest items, the store also services the local school districts through band rentals and repairs. “We try to serve just about everybody in the community,” says Williams. “We’re a small little beach town and we’re just a little store but we’re kinda putting it on the map right now,” explains Williams. “Fox LA does a hot list every year and this year we were listed as the #1 music store in Orange County.” Kenny’s Music tries to involve the community whenever possible. “We just commissioned a statue with Cherie Currie of the Runaways,” explains Williams. She’s [Cherie Currie] made a guitar-playing mermaid for us. It’s in memory of Sandy West who was her drummer and had died of cancer,” says Williams. “We’re gonna do a benefit concert for cancer in honor of Sandy.”
When asked about the current economic crisis, and its effect on the local community, Kim told us that “The economy here is okay. We really haven’t realized any lull at all. It seems a little quite at the moment, but that’s kind of typical for this time of year.”
The Internet. “We do have a Web site,” says Williams. “We’re in the process of putting more items for sale on the Web site but with everything we’ve been doing recently, haven’t had that in focus at the moment.” Williams intends to change that telling MMR that “in the next month or so we’ll be putting more items on the Web site.”
Going Forward. “We’re making a lot of changes,” says Williams. “We’ve moved the business to a more visible location which is probably the reason why we haven’t realized a dip in sales or lessons. Also, we’re doing more promotions and trying to focus more on doing things within the community such as our cancer benefit. We were actually thinking about things we could do differently,” explains Williams “That started the mermaid situation and then it kind of grew from there.”
Outlook. Business is good for the small Orange County dealership. “We feel like things are definitely looking up,” says Williams. “We’re real excited about the future and things seem good. Business has gone up. The move and everything has really helped our business. So yeah, we’re looking forward to the future and we’re really confident with the way things are going.”
Anaheim Band Instruments
Anaheim Band and Instruments was incorporated in 1982. In it’s 27th year, Dave Browne told MMR that ABI first became known as the local “brass and woodwind specialists”. Since then, ABI has needed to “refine and keep our focus really, really sharp in instruments that you blow into”. While they do sell some orchestral strings and percussion gear, when walking into the store you see “trumpets trombones saxophones tubas and horns”. ABI also functions as a full service repair shop. “Our people are trained in instrument factories, and have worked in instrument factories so they’re not cobblers, they are real repair people,” explains Browne. In addition to sales and service ABI has “a good studio operation”, with degreed teachers and professional players.
Right now, California “is a grease fire; a dumpster fire,” says Browne. In prior years the schools had received a lot of “capital outlay money” for instruments. Today “some of the same teachers are getting pink slips” explains Browne. “Our school business is down substantially. It’s always hovered between 30 and 40 percent of our gross margins, and now it’s down 40percent.”
The Internet. Although ABI runs a Web site, Browne tells us that “it’s not really sales intensive. What we really want to do is show people where our heart is. It’s not one of these ‘drop it in your cart’ sites and if your looking at 1:00AM to buy a clarinet in NJ, this is not the Web site for you. If you want to learn about the instruments and if you’re near to our location, then please come in. Let us be something hopefully better than most of what’s out there available to people looking for band or orchestra instruments.”
Going Forward. To combat the recent economic crisis, Browne has been boosting the rental programs. “There were a number of years where I actually ratcheted that back,” said Browne. “Now, we’re encouraging more people who are on the fence to just go ahead and rent.” In addition to increasing rentals, ABI is “doing a lot of active mailing and emailing” with the hopes that local school districts and customers will use ABI’s maintenance services over the summer. Browne told MMR that they’ve “started a loyalty rewards points program” in which customers who have “ties to a local school music program or community band” can collect points to “redeem in the future for anything they want.” The program has been well received and Browne says that he got the idea from other “industries which do similar things. Its very easy to enroll and we just have to be vigilant that every customer knows ‘Hey, is your school signed up for this?’ and if not, ‘here take a flyer, show it to the band teacher’”.
Outlook. Browne told MMR that while the situation isn’t bleak, “trying to watch overtime hours and compensation changes” such as 401k matching are some of the modifications that he’s recently employed. “I haven’t parted ways with any employees and do not wish to,” says Browne. “We’ve got people that have worked here for 15 years and that’s my heart’s real desire, to not have to cut anyone back or cut anybody loose.”
Founded as a rare orchestral instrument store, Westwood Music, located in Los Angeles, has changed with the times. At the young age of 19, Fred Walecki, whose father Herman opened the store in 1947, was thrown into the business headfirst when his father became ill in 1966. Over the years, Walecki’s shop has seen many changes in the music industry as well as his own inventory, and customer base. Today Fred’s target audience is the “up and coming professional from 15 years of age and older, interested in new tube amps, boutique pedals, unusual new guitars as well as vintage, both electric and acoustic. We have those that are not professional but are good players looking for ‘the big Experience’ repair staff or the Martin Santa Cruz Warranty station in LA,” explains Fred. “We have some entry level guitars set up very well, but we mainly carry semi and professional inventory.”
Walecki describes his locale as the “high end area between Malibu and Beverly Hills just West of Hollywood.” Today, that area is feeling the economic crunch. Fred’s customers “got hit hard by the downward stock market spiral that shrunk their 401ks to 101ks. More than a few of our customers were hit either directly or indirectly by the Madoff scheme. When Obama started preaching fear and “crisis” we dropped 35 percent. Within the second fifty days, our gross sales were still down. I think that everybody that works and lives in this particular area is very aware of what’s happening on wall street and it’s translating itself to main street.”
The Internet. Although Westwood music does run a Web site, Walecki tells us that they’ve “really been asleep at the wheel” in that department. He hopes that will change shortly saying “We’re getting a really good internet person and I’m throwing in with a man that does AVI installations so we’ll have really top drawer audio advice.”
Going Forward. To combat the current crisis, Walecki has added an extra day of business. “We’re now open seven days a week and because we have fixed costs that remain the same, it should help our bottom line.” In addition to opening up the store on Sundays, Walecki is hoping to diversify by moving away from just guitars towards a “full line music store”. Over the years Walecki had curbed back on his drum and keyboard departments. “In the ’70s we did a lot of pro audio and even had a Westwood Drum shop. Then in the 80′s keyboards got to be a big deal, but it was too much for me to have all these balls in the air so I thought ‘well I’ll just consolidate and do guitars’. Now we’re expanding our keyboard, drum and pro audio departments.”
In addition to expanding their inventory, Walecki is trying to promote his store’s lesson and repair shop. “We’re putting in five teaching studios and cooperating with some magazines and manufactures,” says Walecki who is trying to train his staff to be “proactive rather than reactive.” Walecki explains that he wants “proactive salesmen rather than order takers and box movers.”
Outlook. “We want to set our goals high and see if we can somehow offset what’s happening. I don’t wanna’ go the way of the little record store,” says Walecki who is currently trying to focus on his assets. “We’re going to rely a lot on our teachers and repair staff. We’re hoping that buy getting proactive and making these changes that the outlook is better than what we would expect if we didn’t change anything,”