25th Annual Dealer Review & Forecast

While concerns about the entry of Best Buy into the MI market has some wringing their hands nervously, and continuing anxiety over competition from big box and Internet retailers remain hot topics, it’ll come as a surprise to no one that that overarching concern voiced by those retailers we contacted for this year’s 50-dealer/50-state review was: the economy.

With top economists predicting that, “a recession is likely to continue at least through the end of next year, with 79 percent saying the economy will grow less than 1 percent and 38 percent saying the economy will shrink next year,” according to a November CNN report, it’s likely that all retailers and suppliers will be feeling the squeeze for months to come. Also, while some see the emergence of a new presidential administration in ’09 as a sign of better times on the horizon, at least as many seem concerned about the increased instability such a change may bring.

Nonetheless, the overwhelming majority of sellers we spoke with voice a positive outlook for the coming year, even if they can’t point to specific reasons for such optimism. As Larry Stark of Ben Jacks’ Arkansas Music, Inc. put it: “I’m cautiously optimistic that 2009 will be much better than 2008, but frankly I’m hard pressed to give a reason why.”

ALABAMA
Ron Partain’s World of Music
Pell City
Ron Partain, owner

2008 vs. 2007: Sales stayed flat; we had no measurable increase or decrease in sales.

Highlights & Low Spots: We have been very pleased with sales of AXL and Michael Kelly guitars. The low spot has been the poor state of the economy.

Concerns: My main concern is the economy. People just don’t have excess money to spend. Musical instruments are not a priority for people right now.

Outlook for 2009: I’m hoping the new administration will keep their promises and things will be stabilized.

Product of the Year: Alvarez RD8C guitar

ALASKA
Pro Music
Fairbanks
Craig Smith, owner

2008 vs. 2007: 2008 has been better than 2007.

Highlights & Low Spots: The sales of import electric and acoustic guitars have increased this year. sales of synthesizers, especially at the upper end, have decreased overall for the year.

Concerns: The loss of margin for dealers in the music industry.

Outlook for 2009: We remain optimistic for 2009 sales.

Product of the Year: Fender GDEC series of amplifiers

ARIZONA
Instrumental Music Center
Tucson
Michael & Leslie Faltin, owners

2008 vs. 2007: Sales for this period are down approximately 30 percent from the same period in 2007.

Highlights & Low Spots: Our rental season was up approximately 10 percent over the previous year, after being flat in 2007. Decreased competition and increased prices helped us have a great rental season. After the weak Christmas season for 2007, we saw sales slow sharply in January and February. We slowed down inventory acquisitions and scrapped any plans to open new lines after the NAMM show. This reduced spending helped us tremendously over the slow summer months. With the price of gas roughly doubling and the price of groceries going through the roof, it is surprising to see that the recession hasn’t hit us harder. Many of our vendors are raising prices, with one of our vendors issuing new prices for the third time in 2008. The man-hours required to update our computer system and make new signs to reflect these price increases are daunting.

Concerns: Inflation. If the prices continue to go up without corresponding increase of wages, bad things will happen. People will need to make choices whether to pay their violin rental or fill up the tank. People won’t go out to eat as much, causing the pizza parlor owner to stop paying for his drum lessons. Music stores will stop carrying professional model horns that have slow inventory turns. Decreased demand for instruments will cause manufacturers to cut back production, charge more for existing product, and close underperforming American factories. The workers fired from those factories will not buy that new guitar for their daughter this Christmas, since they are about to be evicted from their home.

Outlook for 2009: I expect 2009 to look a lot like 2008. I wouldn’t anticipate an increase in sales or school funding for at least another one to two years. I expect to see more rental business, as many people will not be able to afford to purchase instruments. I anticipate more repair business as people fix up old horns rather than get new ones. I plan to see an increase in sales on low to mid-priced instruments. The bright side is that with more people spending time at home instead of traveling, and the relatively low cost of playing music, we could see a great upsurge and a greatly renewed interest in folks playing music together. There’s a silver lining for the prepared dealer.

Product of the Year: Yamaha Xeno Trumpet

ARKANSAS
Ben Jacks’
Arkansas Music, Inc.
Fayetteville
Larry Stark, operations manager

2008 vs. 2007: Sales were down about as much as gas was up in 2008.

Highlights & Low Spots: The lows were the first three quarters of 2008. The highlight was the fourth quarter. No matter about the economy, election year, or anything else so far,it’s still Christmas and Santa always shows.

Concerns: Manufacturer’s total disregard for independent dealers who have loyally represented them for 40 plus years and then get a big box thrown in right on top of them. We are now one of three dealers of a particular guitar line in a two-mile radius, soon to be four if Best Buy opens here. The big boxes need to be held accountable to territory and franchise agreements that we have honored during the last five decades. We should take note of what greed has done to the banking and mortgage industries and reverse this troublesome trend before the big boxes collapse the entire industry and leave us all with nothing.

Outlook for 2009: Cautiously optimistic that 2009 will be much better than 2008, but frankly hard pressed to give a reason why.

Product of the Year: the Fender Squire Vintage

CALIFORNIA
Jim’s Music Center
Irvine
Rob Joly, president

2008 vs. 2007: We are actually up in sales through the third quarter.

Highlights & Low Spots: Highlights were finalized lease negotiations on a new building, double the space of our current location. The real highlight is that the building has visible signage on the freeway with over 400,000 drivers every day. Lows were dealing with contractors, landlords, and trying to get help from our industry with the move.

Concerns: Definitely our economy is my main concern. Also, continuing price increases the manufactures are sending our way is a concern. Price increases at two or three times a year are very hard to deal with on the inventory side – updating computers, as well as actual inventory, and the problems caused by customer proposals that were quoted before the price increases.

Outlook for 2009: We are keeping a very positive attitude and direction going into the fourth quarter and 2009. Our sales have been very consistent.

Product of the Year: Fender Strat Packs

COLORADO
Robb’s Boulder Music
Boulder
Seth Goodman, owner

2008 vs. 2007: Overall, 2008 was a better year for us than 2007.

Highlights & Low Spots: Our highlight for the year was a move to a bigger and better location with a lot of community support. We now have state-of-the-art lesson studios as well as a 6,500 sq. ft. showroom.

Concerns: Our greatest concern currently is the instability of our domestic economy.

Outlook for 2009: We have a positive outlook for 2009, from our helpful and knowledgeable staff, to our huge selection of beginning- to professional-level gear. We have been serving the Boulder community of musicians for almost 31 years, and it is that support that gives us the great outlook for 2009.

Product of the Year: Roland V Drums.

CONNCECTICUT
Norwalk Music, Inc
Norwalk
Michael Spremulli, president

2008 vs. 2007: Retail sales were down from 2007, but were more than offset by a significantly higher lesson enrollment and strong rental growth.

Highlights & Low Spots: Ibanez acoustic and electric guitars were a great addition to our offering. The company is terrific to deal with and the product sold excellently! The lows were learning of yet another box store/mass marketing conglomerate opening stores across the country, and watching the same manufacturers that went down with the last box/chain debacle hop right back on the bandwagon again.

Concerns: We’re continuing to have a difficult time being competitive with the free shipping and sales tax advantages of online shopping, while still having to pay astronomically high rent to be in a highly visible area of town.

Outlook for 2009: We will continue to focus on lessons, rentals and repairs, while carefully choosing both the companies and product mix for our sales floor. Our Web site is now fully integrated with our store, so what is represented online is represented on our sales floor as well.

Product of the Year: Ibanez AEF18

DELAWARE
Accent Music
Wilmington
Steve Harkey, owner

2008 vs. 2007: 2008 was another challenging year, but we managed to run a few successful promotions that kept the customers coming into the store.

Highlights & Low Spots: One highlight of 2008 is it’s our 20th anniversary. We had celebrations throughout the year, and our major anniversary party drew a huge crowd. The lows of 2008 are how the growth opportunities are suppressed by the overall economy. It takes a lot more effort to produce the same results.

Concerns: My concerns are of course the economy and what impact that has on our local and Internet market. Also, this slowdown in retail has encouraged other large retailers like Best Buy to enter the MI business in order to offset slower sales in their own primary markets.

Outlook for 2009: 2009 will be challenging and, since we are in unchartered waters with the economy, it is hard to say what will happen. I will be working harder to keep our business healthy and moving in the right direction.

Product of the Year: Mapex QR 5 piece drum set

FLORIDA
Morningstar Music
Naples
Roger Raymond, owner

2008 vs. 2007: We are down only 2.5 percent, most of which has occurred in the past two to three months. The first quarter was up a little. Very careful ordering months ago and economic understanding were the keys for us.

Highlights & Low Spots: The quick start for 2008 and really only being down a small amount in this economy is a highlight. In music, the lows are limited to finance for me, so I would say seeing other stores suffer is a low.

Concerns: The opening of MI in non-MI outlets concerns me. You need real music people in a true music setting to be helpful to customers, and many good stores are hurt due to money considerations alone.

Outlook for 2009: I think the country has a more positive outlook since the election and this will increase activity for all outlets. My dad worked for GM and I can not imagine what he would think if we let our auto industry fade away without a fight. I think 2009 will see a rebound in most retail settings and music will be a big part.

Product of the Year: Peavey Vypyr amps.

GEORGIA
Earthshaking Music, Inc.
Atlanta
David Strohauer, president

2008 vs. 2007: 2008 was very good. Gross sales were up 11 percent from 2007.

Highlights & Low Spots: We were named Music Store of the Year by readers of Atlanta’s Creative Loafing weekly. The opening of our in-store recording studio has been a great for sales and training of home studio products, and has become a decent revenue stream in itself. High gas prices actually drove new traffic into our store. The lows are not worth mentioning.

Concerns: I’m most concerned about the overall job market and real estate market. Our market seems fairly stable and strong, with a growing disenchantment with big box retailers and greater trust in us as as the place with the gear and the answers.

Outlook for 2009: Guardedly optimistic, but I think we’ll do great.

Product of the Year: Alto PS2A powered loudspeaker

HAWAII
Pacific Music Connection
Hilo
Brendon Nakano, owner

2008 vs. 2007: Sales have stayed the same, but Christmas will really be the telltale sign.

Highlights & Low Spots: We had great sales from local, new music programs. We also had a very good January. The low part has been gas prices. People have been holding onto their money, especially over the summer.

Concerns: The economy and people losing their homes are my concerns.

Outlook for 2009: I am hoping for change with the new government. I am staying positive and hoping that sales will go back to the way they were in prior years.

Product of the Year: Genz Benz Shuttle 6.0

IDAHO
American Music
Caldwell
Benjamin Snell, sales associate

2008 vs. 2007: We have seen a bit of a drop in numbers in 2008 from those of 2007. However, our store dynamics have improved with the hiring of another sales associate, as well as a couple of certified repair technicians to better service our customers.

Highlights & Low Spots: Picking up a few great lines including Korg, Vox, and Mapex, has been a great highlight. This has only helped us increase our dynamics. As far as the lows, the biggest thing that comes to mind is the lull in the economy that has really taken its toll on everybody.

Concerns: My biggest concern is pending budget cuts in school music programs as well as an overall drop in recreational spending.

Outlook for 2009: We are looking forward to 2009. I believe the music industry will see more new upcoming musicians. In hard times it is great to have an escape and music is a relatively inexpensive and readily available recreation that can be enjoyed virtually anywhere.

Product of the Year: Taylor solidbody electric

ILLINOIS
Brandolino’s Encore Music
Shorewood
Bobby Brandolino, owner

2008 vs. 2007: Being in a new location might have played a part in 2008 being a much better year for me. I must say that the summer of 2008 was much better than the summer of 2007.

Highlights & Low Spots: The highlights for us have been the group and private music lessons. The enrollment has been phenomenal this year. The lows are difficult to pinpoint. Certain lines are moving much slower than others, although certain trends seem to be back in. It’s still hard to foresee what’s going to be hot and what’s not.

Concerns: The economy! Being in a more or less specialty business, tends to land us in the category of things that people tend to cut back on when times get tough.

Outlook for 2009: We are going to set some very realistic goals. Expand on some of the lines that are doing well. We are also going to find some creative ways to pick up the pace on some of the slower moving merchandise.

Product of the Year almer PF-24

INDIANA
Roxy Music
Laporte
William Heiss, general manager

2008 vs. 2007: Sales were up about five percent.

Highlights & Low Spots: Our lesson program and guitar sales of $500 and below, along with eBay store sales were very strong. Expensive acoustics have been a little slow

Concerns: My concern is what will happen in the coming year with the new administration.

Outlook for 2009: We believe our lesson program will continue to grow, along with overall growth of sales, as we focus on new students, and doing more promotion in the lesson program area. Also, continuing to expand our eBay store listings will allow sales increases.

Product of the Year: Fender American Standard Strat

IOWA
Dave Krogan
General Manager
Rieman Music
Des Moines

2008 vs. 2007: Our fiscal year ends June 30th, and sales were essentially flat for the year, which was true for the previous year as well. With the changes we have made in inventory control we were able to increase profitability substantially.

Highlights & Low Spots: Pianos continue to be in a slump, and I don’t see that changing anytime soon with tightening credit. A highlight for the year was fretted instrument sales being up almost 20 percent. Our main business is the school band directors. We had a slight increase in school business and rentals, but are seeing an increase as we move into the fall of 2008. We have spent a lot of time on our Web site and have begun offering online rentals this fall. We continue to see small rural schools shrink and the metro schools grow. As we move forward we continue to focus on GMROI on smaller catagories of inventory and increase our turn rates.

Concerns: Best Buy just opened their music store next to Guitar Center here – very nicely laid out, nice product mix. They will have an effect on the Christmas entry-level market.

Outlook for 2009: Iowa has had a historically low mortgage failure rate, and we’re looking at a near record setting harvest. So while the press laps up the doom and gloom around the nation, we are fairly stable and optimistic about the future.

Product of the Year: Casio PX120

KANSAS
Supersonic Music
Topeka
Derek Sharp, owner

2008 vs. 2007: I credit several new things that made 2008 a good year: the competence of new staff, a better product mix (we dropped several non-performing brands and brought in a few new ones), the eventual lowering of gas prices, and a little better local market presence with the recent closure of other stores.

Highlights & Low Spots: The highlights were the excitement about new brands, moderate remodel in stores, and a new staff with integrity. Lows were: the continuing trend towards flash-in-the-pan musicianship; guitar books with one-finger (open) chords; the instant success kids feel when playing the video games, which they confuse with talent; new electronic instruments and products that do so much that folks aren’t motivated to really create; stuff that dumbs down music and doesn’t speak to the reality that it takes years of practice to master anything.

Concerns: I hope that new staff will continue to grow and continue to serve well.

Outlook for 2009: I plan further evaluation of existing lines, and the possibility of more of them being dropped. This is hard for me because I’ve been a dealer for a decade. Certain companies’ increasing buy-ins and over-saturation in the market makes me want to just let the box stores deal with them.

Product of the Year: Bugera 6260 Head

KENTUCKY
Owensboro Music Center
Owensboro
Gordon Wilcher, owner

2008 vs. 2007: Heading into November we were slightly up for the year. Let’s hope the year can finish steady.

Highlights & Low Spots: The highlight was our 35th Anniversary Community Celebration. We had about 500 people attend, and it was just a great time. We had some great music and raised some money for a great charity. The low point has to be the slumping economy and consumer caution. Throw in the election year and it’s been a really bummpy ride!

Concerns: My biggest concern is maintaining a livable profit margain. Shrinking margains and expanding outlets are the challenge for all independent dealers. Not a day goes by that a customer challenges us to match an Internet price that violates MAP pricing. Pouring more products into the market place is eroding the independent dealers’ margins. Lines that once had clout in a market like ours are now just another stock-keeping unit. It’s a day to day challenge to find the product’s to sell that pay the bills. Out of control health care also worries me. That’s our number one expense.

Outlook for 2009: Cautiously optimistic at best. Consumer loyalty is at an all time low, but I am hopeful customers will remember the value of service after the sale. It’s looking like it’s more important than ever to offer service, lessons, and a knowledgeable sales staff. We may have to look at being more lean and mean. We will be working on all the above. Belonging to musicstoreowners.com helps too. Indies have to join forces and work together now more than ever!

Product of the Year: Samick SSL-3 guitar

LOUISIANA
C & M Music Center
Kenner
Chris Nail, owner

2008 vs. 2007: 2008 was very good, better than 2007.

Highlights & Low Spots: The highlight of 2008 was great sales. The low was the hurricane.

Concerns: “Flavor of the year” vendors, who cheapen their brands selling to Best Buy concerns me.

Outlook for 2009: I think we are going to have a great year.

Product of the Year: Yorkville Elite powered speakers

MASSACHUSETTS
Downtown Sounds
North Hampton
Joseph Blumenthal, owner

2008 vs. 2007: 2008 was slightly better than 2007.

Highlights & Low Spots: The highlight of 2008 was good sales. There were many different products that did very well.

Concerns: My concerns are competition from the Internet and big box retailers. I also wonder if my vendors will continue to make it possible for me to make a living.

Outlook for 2009: I think we are going to have a great year.

Product of the Year: Martin 15 Series guitar

Maine
Mark’s Music
Brewer
Mark Braveman, owner

2008 vs. 2007: 2008 started out really slow during February and March, but turned around. We had a record-setting August and September. Who knows what the fourth quarter will bring, but I am keeping my fingers crossed.

Highlights & Low Spots: The highlight of 2008 for me was that we had a new casino built in our town which we were contracted to do the sound system. It was a great job for us, and we also did several other installations at area health clubs and venues. The lows were the rising costs of shipping and everyone’s worry about the economy.

Concerns: What concerns me the most is the current economy, the cost of heating oil in this area, and wondering where people will decide to spend any extra or any income they would have to spend on non-necessity items, such as music.

Outlook for 2009: I am not sure of the outlook for 2009. I am hopeful that the economy will settle and it will be business as usual. I feel I need to work as much as I can at getting other aspects of the business going – such as rentals, lessons, and installations – in order to stay strong and support retail.

Product of the Year: Fender CD60 acoustic guitar

Maryland
Bill’s Music House
Catonsville
Bill Higgins, owner

2008 vs. 2007: Overall 2008 was better, actually.

Highlights & Low Spots: The economy and Best Buy now having four locations in Baltimore were the low points. The highlight has been that our house brands products have done well.

Concerns: Chain stores and Musicians Friend.

Outlook for 2009: If we work hard and focus, we will do fine.

Product of the Year: Peavey Vypyr Amplifiers

Michigan
Hanson Pro Music LLC
Port Huron
Eric Hanson, manager

2008 vs. 2007: For the first three quarters, total gross sales were up 2.4 percent.

Highlights & Low Spots: The low was the financial crisis; October was down 52 percent from last year. The high was selling a $3,000 Taylor.

Concerns: Vendors’ unrealistic expectations of a market, Best Buy going instrument retail in my town, and our next president.

Outlook for 2009: Another year of survival to make it through to more good times.

Product of the Year: Four Star Wire and Cable.

Minnesota
Downtown Music
New Prague
Jim Reeder, owner

2008 vs. 2007: This year was tougher than 2007. Not only were sales down, but our expenses increased.

Highlights & Low Spots: The high was band instrument sales. The low was difficulty in working with manufactures because of their consolidation.

Concerns: Definitely the economy.

Outlook for 2009: I think things will get better and turn around by the third quarter.

Product of the Year: Jay Jr. youth guitars

Mississippi
Stan’s String Shop
Natchez
Stan Smith, owner

2008 vs. 2007: Our 2008 sales were down just a little from 2007.

Highlights & Low Spots: Takamine guitars and Gretsch drums were the highlights. Band instruments and pianos were the lows.

Concerns: My concern is the local job market. As long as people have steady jobs they buy instuments and take lessons.

Outlook for 2009: Staying positive.

Product of the Year: Takamine Guitars EAN 4OC

Missouri
Dexter Music Center
Dexter
Steve Agee, owner

2008 vs. 2007: I’m still seeing growth in my fourth year.

Highlights & Low Spots: The economy was a low this year, but we continue to grow.

Concerns: The value of the US dollar falling and the rise of gas prices seem to slow a lot of people’s spending, while at the same time I saw an increase in international sales. So for me it was a wash.

Outlook for 2009: I look for another good year. I will have to continue to step up my game and have a stronger presence on the Internet. With gas prices coming down and the election behind us, it will probably bring some relief to a lot of us.

Product of the Year: Gibson Les Paul Standard

Montana
Electronic Sound & Music
Missoula
Checkers Barker, co-owner

2008 vs. 2007: Right now we are down from 2007, but 2007 was an unexpectedly good year. Sales in 2008, through June, were almost on par with 2007 until mid-summer, and then sales were soft. I just finished the books for September, and numbers are up again. I hope that continues through the last quarter.

Highlights & Low Spots: I would say one of the highlights was that our teaching programs continue to grow.We are so lucky to have teachers that are well respected on their instruments and really enjoy what they do. The lows were probably pressure from suppliers to keep buying, whether you need product or not. This coming year will be our 30th anniversary, and watching the economy and retirement savings drop has not been fun either.

Concerns: Suppliers that expect higher numbers every year while selling their products to every big box store in your area. The economy overall is also a concern. Sales are down from last year.

Outlook for 2009: It is hard to say . September was up, and we are heading into the biggest quarter of the year. It is anybody’s guess right now.

Product of the Year: Roland Electronic Drums TD-9S

Nebraska
Lou Kraus Music
Ogallala
Bob Josjor, owner

2008 vs. 2007: At the time of this writing our overall gross sales are up, but due to higher expenses our profit is nearly even with 2007. Our combo business accounts for a good portion of the increase in sales. Band instrument sales were only slightly better than last year.

Highlights & Low Spots: We tried some special promotions in 2008 and they were a success. It’s always a good thing when you try something new and it actually works. The biggest hassle we faced this year was short supply from multiple manufacturers. It really made it difficult to project buying for the remainder of the year.

Concerns: Of course we have the Dow jump up and down like crazy, so uncertainty about the economy in general is a great concern. My chief industry-specific concern would be manufacturers’ treatment of smaller independent dealers in things such as direct sales to consumers, cost parity, and buy-ins. It’s too large for independents to comply with.

Outlook for 2009: We’re hopeful. The economy will do what it will do, and there is little we can do about it except continue to do what has gotten us through the last 25 years—provide top quality service and products at competitive prices. Sounds like an old, corny motto, but it is a proven success formula.

Product of the Year: Ibanez Steve Vai model

Nevada
Musician’s Advocate
Las Vegas
Bradley Hagen, owner

2008 vs. 2007: Slightly better, however the third quarter and so far in the fourth quarter, our 2008 sales are way down.

Highlights & Low Spots: The highlight was the first half of the year. The low is the current economic downturn. It’s hard to convince someone to buy a wireless mic system when they are about to be laid off, or if they are paying $100 to fill up their car.

Concerns: Right now there is a real fear about this economy and people are holding onto their money. Disposable income is what this industry mostly relies on and it is evaporating rather quickly

Outlook for 2009: Hopefully the housing crisis and economic downturn will stabilize at the very least. If it doesn’t, then we are all up the creek.

Product of the Year: Motif XS-8

New Hampshire
Rondo Music
Claremont
Kurt Zentmaier, president

2008 vs. 2007: This year was excellent until the last week of September. Gas prices really did not hurt sales as much as the news seemed to indicate. After mid- September sales dropped off. It remains to be seen what kind of Christmas we will have. I have not canceled any of our advanced pack and other Christmas related orders. If sales remain weak, I expect there may be some pretty signficant blowout sales in order to get rid of it all.

Highlights & Low Spots: Sales were steady, way up until the last week of September. Since then it’s been pretty poor.

Concerns: The state of the financial markets and people’s ability to get financing going forward.

Outlook for 2009: First Quarter will probably be weak; after that it really depends on what happens with the economy.

Product of the Year: SX EG1K 3TS Guitar Pack

New Mexico
Santa Fe Music & Piano
Santa Fe
Sarma Taylor, president

2008 vs. 2007: We had a significant drop in high-ticket sales, notably pianos. Also high- end professional instruments slowed.

Highlights & Low Spots: We experienced more interest in name brand instruments like our line of Yamaha guitars and band instruments. Also guitar activity increased this year. The lows that we are experiencing now, relating to the economy, are pretty serious. Customers who were ready to buy are staying away.

Concerns: My concerns revolve around the ability of our customers to use their credit cards and the availability of credit from our suppliers.

Outlook for 2009: We believe that it is in the best interest of all retailers for the government to keep credit flowing for consumers. Hopefully that will improve the economy. It may be the year for the small, independent stores to move forward.

Product of the Year: Yamaha Gigmaker Deluxe

New Jersey
Sweetest Sounds Music Center
Lyndhurst
Michael Lepre, owner

2008 vs. 2007: The beginning of 2008 was normal and lucrative, pretty much the same in comparison with 2007. The challenge didn’t really come until the last three months with sales dropping. Lately it has been harder to get people to come through the front door. People aren’t spending their money for the obvious reason: the economy is bad. This election has been one of the most unpredictable and historical presidential elections of our time, so people are nervous about the uncertainty of the future.

Highlights & Low Spots: Some of the highlights of this year (believe it or not there were some) without a doubt were schools bids. The participation of the schools for the mom and pop stores is not just necessary, but beneficial to the community. In general business was steady with repairs, sheet music, and rentals. Life was good for a lot of people – and then August came. There isn’t one specific thing to point to that made it a low point. People are just not spending.

Concerns: What concerns me the most is the instability of the economy. I feel that the economy will worsen before it gets better. I am concerned with the people at the top or in control. They must worry less about their party and worry more about this country, but it’s a hard thing to do in politics.

Outlook for 2009: I love this business and it’s been good to me. I am staying confident for the future. We must sustain the lows and work intelligently towards the future. People will spend again!

Product of the Year: Ibanez Electric Package IJX40

New York
Alto Music
Middletown NY
Jon Haber, owner

2008 vs. 2007: Sales were up by roughly 10 percent from 2007.

Highlights & Low Spots: None to speak of except the continued major revamping of our locations.

Concerns: The possibility of the hammering small business will take with the new government and the tax policies that Obama espouses concern me.

Outlook for 2009: For the first time ever, I have no idea.

Product of the Year: Universal Audio UAD2 series

North Carolina
Swansboro Music & Pawn, Etc.
Swansboro
Don Whalen, owner

2008 vs. 2007: Sales were down by 15 percent from 2007.

Highlights & Low Spots: Band instruments sales were down by 40 percent. There were no highlights.

Concerns: The MAP system and online dealers with little to no overhead and free shipping.

Outlook for 2009: We want to have quality products to sell.

Product of the Year: Washburn Acoustic Guitars The D-52 All Solid Wood Acoustic

North Dakota
Kenny’s Music
Grand Forks
Kelly Coreahl, manager

2008 vs. 2007: Sales slowed down in the summer of 2008 more than they did in 2007, but they are picking up again.

Highlights & Low Spots: The highlight was college students coming back; they help business. The low was CNN reporting on the economy, scaring people.

Concerns: My concern is our beginner business. Parents are tightening their wallets and not buying instruments for their kids.

Outlook for 2009: I am hoping to increase our high-end sales.

Product of the Year: Line 6 Spider 375

Ohio
Mossman Music
Norwalk
Don Mossman, manager

2008 vs. 2007: 2008 was not as good as 2007, but it could have been worse.

Highlights & Low Spots: The highlights are any time when we manage to make a sale to someone who still has discretionary income – lows are when we don’t.

Concerns: The lack of available discretionary funds and lack of margin concerns me.

Outlook for 2009: I remain hopeful

Product of the Year: Hohner acoustic HW200

Oklahoma
Dancing Dragon Music
Oklahoma City
Guy Ragland, Owner

2008 vs. 2007: Store sales were up 80 percent from 200.

Highlights & Low Spots: This was our third year in retail and the dramatic increase in store sales was very satisfying. Our product mix came into focus with gains in every segment of the store. We thinned out our lines and tried to represent and advocate the remaining brands from top to bottom. On the downside, the third quarter/fall slump was more severe than in past year, but I believe that was attributable to the election activities and the turmoil in the financial markets creating a general sense of unease.

Concerns: National economic conditions beyond our control are my concern.

Outlook for 2009: am optimistic and projecting another 20-25 percent growth, barring any major economic setbacks.

Product of the Year: Breedlove AC25/SR Plus

Oregon
Centaur Guitars
Portland
Jason Snell, owner

2008 vs. 2007: Sales were up in 2008 from 2007. Our business has continued to grow.

Highlights & Low Spots: The high was a visit from ZZ Top’s guitar player, Billy Gibbon. We did very well with effects pedals, but new electric guitars were not moving.

Concerns: I am concerned about the economy, but hopeful.

Outlook for 2009: I plan on continued growth and want to establish more of a hold on the local market.

Product of the Year: Home Brew effects pedals

Pennsylvania
West Chester Music
West Chester
Scott Thompson, Proprietor

2008 vs. 2007: Overall 2008 was a good year. Business was up slightly compared to 2007.

Highlights & Low Spots: For us the highlights would have to be becoming a full line Fender dealer and expanding our presence in the high-end electric and acoustic guitar marketplace. The low point would have to be the extremely difficult decision to cease being a full line Gibson dealer.

Concerns: Our greatest concern, like just about everyone, is the economy and it’s effect on the MI industry, particularly at the retail level. The entrance of Best Buy into the market concerns us as well.

Outlook for 2009: We are looking ahead with guarded optimism. We believe that we will continue to grow.

Product of the Year: Fender American Standard Stratocaster

Rhode Island
Al Trombetti Music Center
Warwick
Bob McKenna, owner

2008 vs. 2007: The first half of 2008 was good and then sales went down a bit.

Highlights & Low Spots: We had a very good winter and spring, but the low was the dip in our online sales.

Concerns: The economy is the main concern. People are tightening their wallets. As a result we have lost quite a few students.

Outlook for 2009: I believe that by late spring things will turn around and get better.

Product of the Year: Fender American Standard

South Carolina
John’s Music
Hilton Head Island
John Sturm, owner

2008 vs. 2007: Down, quite flat.

Highlights & Low Spots: Highs were some innovative product, and lows were unreasonable quotas from suppliers

Concerns: Consumer spending on high-end products.

Outlook for 2009: Not great – I think that the economy will take a while to recover to the point of building consumer confidence.

Product of the Year: Orange amps

South Dakota
Engel Music
Aberdeen
Don Trebilcock, owner

2008 vs. 2007: Sales were slightly up in 2008 prior to the financial crisis.

Highlights & Low Spots: Keyboard sales were up. We had no lows because sales were up from 2007.

Concerns: My main concern is people losing their jobs. That affects everything.

Outlook for 2009: We are taking things one day at a time. It’s hard to predict with a new administration coming in.

Product of the Year: Yamaha keyboards

Tennessee
Lunsford’s Musical
Instruments, Inc
Knoxville
Sonja Dittrich, owner

2008 vs. 2007: 2008 was better. More adults are getting into music and taking lessons. People are spending more wisely and not buying online to be assured of quality. Customers realize we have Internet pricing with local service.

Highlights & Low Spots: This is a combination. I was down with some medical issues and the employees stepped up to the plate for a great rental season. It was really nice knowing that I had a team that I could depend on.

Concerns: The quality of instruments. If the quality doesn’t stay up then the music industry will suffer in general. Customers will throw the cheap instrument out and buy another. Therefore, the quality of the instrument is gone as well as the quality of the musical experience.

Outlook for 2009: I’m looking forward to it. Customers are realizing the value of local service again and the personal relationship that the local music store provides. I’m not looking forward to higher taxes for the small business. We spend way too much time on weekly, monthly, quarterly, and yearly taxes. A lot of companies don’t make it past three years. I bet if you asked what really happened, they would say too much paper work, and taxes were the biggest obstacle, not the hard work!

Product of the Year: Gemeinhardt 3SHB

Texas
Swords Music Inc.
Fort Worth
Dave Sheppard, manager

2008 vs. 2007: 2008 has been better for us than 2007.

Highlights & Low Spots: I have noticed an uptick in PA gear sales and in guitar sales. Those are usually our best departments, but I have noticed drumset sales down a bit. Rentals have been up this year.

Concerns: My biggest concern is getting people in the door.

Outlook for 2009: Going to get people in the door.

Product of the Year: Cort EVL-K4

Utah
KSM Music
Logan
Kevin S. Moore, president

2008 vs. 2007: Sales were down a little from 2007.

Highlights and Lows Spots: In reviewing the past year for highlights, I can’t find any, which might tell me something.

Concerns: The decline of small retailers and the lack of concern about it from everyone but small retailers.

Outlook for 2009: We are trying a new formula for doing business in the fourth quarter and into next year. I feel positive about it.

Product of the Year: Baden Guitars DSM mahogany with the matte cedar top

Vermont
Maple Leaf Music Company
Brattleboro
Kate Spencer owner

2008 vs. 2007: There have been fewer sales, across the board.

Highlights and Low Spots: Sales being down was the low spot, but we’re still in business.

Concerns: The economy. We have had many potential customers say they are just waiting for the stock market to come back up before they buy.

Outlook for 2009: We are looking at 2009 with a jaundiced eye through rose-colored glasses!

Product of the Year: Huss & Dalton DS Custom

Virginia
Contemporary Music Center
Chantilly
Menzie Pittman, owner

2008 vs. 2007: We had our best year on record in 2008.We continue striving to launch new programs and ideas. We have continued to improve the look and artistic presentation of the stores, and we always look for ways to have the customer and the community win. If it is a win for the community it is a win for everyone.

Highlights and Lows Spots: My personal highlight was being asked by NAMM to participate in the Washington D.C. “Fly In,” addressing lawmakers on Capitol Hill, regarding the multiple benefits of music education. To be asked was truly an honor.

The only low for 2008 that comes to mind is the general feel of the slowdown in the economy.

Concerns: My main concern is the perception of the current economic outlook. If the media convinces the consumer things are bad enough, it will be a self fulfilling prophecy.

Also our industry continues to redefine itself, and I don’t see everything about the re-definition as positive. The trend in “non music related stores” selling music products continues, and while that can be good for a few bottom lines, I don’t see it as “truly” serving the needs of the customer. It is also beginning to happen in a watered down version of music education. We seem to be forgetting the knowledge of music is “specialized” and can’t be bought by the truckload at discount pricing.

Outlook for 2009: I remain cautious, and I watch trends closely. Although our business remains strong so far, I don’t believe success is ever automatic. It is earned one day at a time. Overall it appears 2009 will be a very good year for us.

Product of the Year: Roland DP 990.

Washington
Mojo Music
Bellingham
Mike Roe, owner

2008 vs. 2007: Sales have been up in 2008. The products have shifted. People are looking for value. They are buying inexpensive products, but more of them.

Highlights & Low Spots: The high was an increase in our online sales and used product sales. The low was the economic problems putting a damper on high-end product sales.

Concerns: My concern is people’s inability to afford the product they want because of credit trouble and being unable to get financing.

Outlook for 2009: I am very optimistic. I want to diversify our products and expand home recording products.

Product of the Year: Korg M 50

West Virginia
Guitars Plus, Inc.
Beckley
Randy Mullins, owner

2008 vs. 2007: 2008 had a good momentum until June when the economy and the election started to have an impact on retail musical instrument sales. We were about even with 2007 totals until June.

Highlights & Low Spots: 2008 showed some good new products from Peavey, Line 6, and Paul Reed Smith. The gas prices and housing collapse would be the lows for 2008, which effect the musical instrument buyer.

Concerns: So many products being made overseas. The USA is losing grip on a competitive product at a competitive price.

Outlook for 2009: Slow through the first two quarters and then stating to level off a little bit. Prices have been so over inflated that the market for instruments had to level off somewhere and adjust itself accordinly especially in the vintage market

Product of the Year: Peavey Vypyr Amplifiers.

Wisconsin
Rockhaus
Milwaukee
Rusty Olson, owner

2008 vs. 2007: 2008 sales are way up from 2007. We have adapted to our new economic climate in the music retail business.

Highlights & Low Spots: Highlights are the remarkably low cost high value of musical related products available today. Lows would be how very little profit can be made on said items by a music retailer in this day and age.

Concerns: The devaluing of the lines and low profit margins.

Outlook for 2009: Quite good really. We are doing our best to wean ourselves off the brands that are whoring themselves out to the catalogs and the like. We are only dealing with companies concerned with music shops. I have a feeling the customers are starting to feel the same way also.

Product of the Year: The G&L Asat.

Wyoming
Hill Music Company
Casper
Kurt Gilbert

2008 vs. 2007: We increased our sales in 2008 and our repair business was up from 2007.

Highlights & Low Spots: The banking issues in the country were a low for us, but it didn’t hit the northwest as much as it did the rest of the country. The highs were piano sales and rentals were up.

Concerns: I am concerned about what will happen in coming year with the new government and the financial crisis.

Outlook for 2009: I am staying positive. We will get through it and have a good year.

Product of the Year: Yamaha EX saxophone