GAK have closed their shop

[Eddy Deegan]

GAK shuttered their shop earlier this week and as of yesterday the website is unavailable. I've been told informally that the staff are being laid off though nothing official has been announced yet.

[Wonks]

That's a real shame.

[Random Guitarist]

Nooooo!!!!!!!!!!!!!

[Drew Stephenson]

Dang. They'd become my 'go to' place when G4M didn't have stock.
Hope the staff are treated well.

[ajay_m]

Cripes, that just leaves Andertons in Guildford and DV247 and PMT in Romford, although Roland are in Denmark St, and Yamaha in Soho.
You really have to try out a keyboard or a guitar in my opinion, so this is a terrible shame. But the reality is that people do go to those stores and kick the tyres but then find a cheaper deal online through the really big guys like Thomann, and who can compete with that?

[Random Guitarist]

Must admit I am very surprised by this. Superficially it seemed their online presence and service was strong, and they had a busy store in a music oriented town with a student population.

If that can't be made to work what can?

[Rebus316]

This is a real shame. I tend to visit Brighton a few times a year from London, and always have a lovely mooch around GAK. Have bought a few times online from them, too. Always had good service. Sad news all round. As Drew says, hope the staff are treated as well as possible.

[Wonks]

The trouble with being on the coast is that you lose 50% of the nearby travelling customer base available to an inland store like Andertons.

But the timing also speaks of very low margins and the increase in national insurance contributions probably meant that they stood no chance of making up any losses they might have incurred.

[N i g e l]

That is bad news. I have previously bought stuff from them on line and found them competitive against Thomann, especially during Brexiting getting sorted out.
Maybe music gear isnt a priority in the "cost of living crises"

[Arpangel]

Went to Guitar Centre here in Manhattan yesterday, looked a bit sad, not much stock, loads of staff, and few customers, definitely looked on the way out.
Friendly guy though, who preferred to talk to me rather than serve a customer, I said " you’d better serve your customer" as the customer was beginning to look like he was going to walk out.
Was going to buy a pedal, but prices didn’t make it worth it.

[OneWorld]

As the song goes "Another one Bites the Dust" what a shame, and a surprise as they always seemed to hold a wide variety of stock and their prices competitive. I wonder if musical instrument sales are declining anyway?

[Eddy Deegan]

Over the last 25 years I've bought a lot of gear from GAK but far less since the private equity-backed management buyout in 2021 when the managers bought the business from the founder, Gary Marshall. Prior to that event I was a loyal customer and only bought things elsewhere if GAK didn't have and couldn't get them.

As my purchase-history grew over the years I developed a good relationship with the store and regularly got decent discounts which fostered a positive feedback loop insofar as I'd sometimes buy things from them even if the prices were cheaper elsewhere, in the knowledge that there was some decent give and take. They'd even let me pop down to their warehouse (a different premises altogether - the website and the shop were effectively separate businesses) in person to collect stuff I'd paid for online if I was impatient to get my hands on it!

Subsequent to the buyout the relationship changed. They no longer seemed to value customer loyalty in the same way and it became increasingly difficult to justify using them over Andertons, who had more stuff in stock and usually at cheaper prices. When I bought my digital mixer I got it from Andertons for £700 less (and enough loyalty points to redeem against a couple of mic stands) than it would have cost me at GAK. Andertons had it on my front doorstep within 24 hours whereas GAK had a lead time of a fortnight or more.

A friend-of-a-friend was a staff member at GAK for many years and through the informal grapevine I heard that I wasn't alone. The new owners had effectively been running the business for Gary since 2016 and the scandal in 2020 where they got fined £250k+ for colluding to fix prices with Yamaha*, Korg and Roland happened under their watch.

Gary ran the business because he loved doing it but as he started to step back the people who ran it for/with him were more concerned with money. This could have been in part due to pressure put on them by the investors (who owned a majority stake).

GAK had a very healthy footfall and a great reputation, it's a shame all round.

This may be related btw:
https://www.business-sale.com/companies ... ast-670506

* Yamaha self-reported the arrangement in exchange for immunity from prosecution

[ajay_m]

I do feel that RRP penalty thing seems a bit unfair. Suppliers pretty much put retailers in an impossible position, either charge RRP or we don't supply you - and it's really the suppliers who should have taken the rap on this one.

Go into the Yamaha store in Soho and ask the price and then cross-check with the online price. It'll be wildly higher in most cases, so although Yamaha might not have the level of control they had in the pre-internet era, they're obviously not averse to trying it on when it comes to pricing. In fairness they will - usually - match the online price when challenged but while it's not unreasonable for something to be a few quid more in a retail shop then the best online price, I recall being quoted something like £50 or even more over the odds when I was looking at the Seqtrak. And they didn't even have it in stock, had to be ordered in.

[garrettendi]

I was going to mention this. I've bought loads of gear from them. Numerous guitars including my first electric (a Yamaha Pacifica 112) and my most recent, the Ibanez Jem Jr. I've bought amps, pedals and a keyboard from them over the years as well as a couple of other bits and bobs like stands and the like. They had a great stock of different guitar string options as well, more than anywhere else in Brighton, and you can't trust Amazon for things like strings - far too many fakes floating about.

It'll be a shame to see them go, but as others, I'm most concerned for the staff. Just the Sunday gone I was there talking to one of the guys about options for my daughter's first guitar. I knew he'd been working there since I first visited GAK in 2003. I'm somewhat concerned about guys like him who have put decades worth of work in and built quite a reputation.

[James Perrett]

Gary ran the business because he loved doing it but as he started to step back the people who ran it for/with him were more concerned with money. This could have been in part due to pressure put on them by the investors (who owned a majority stake).

GAK had a very healthy footfall and a great reputation, it's a shame all round.

Probably a similar issue to many retailers who have gone bust - the business would have been profitable but they had been saddled with horrendous debts due to a buyout or takeover. Maplin and the old HMV are two examples I can think of.

[BigRedX]

You really have to try out a keyboard or a guitar in my opinion, so this is a terrible shame.

I've found that trying guitars or basses in a store is pointless exercise unless it is to rule them out as not being suitable/comfortable for my playing style.

The last time I bought a bass on the strength of playing it for about an hour in the shop I had sold it within 6 months. Once I got it home and played it at a band rehearsal I discovered that it sounded weedy compared with my other basses and was uncomfortable on the strap which put the G-string tuner almost out of reach. The bass it was supposed to replace which had cost less than a third of the price and had been bought on the strength of a couple of photos and a description on eBay was a far more suitable instrument for my needs in every respect.

[Sam Spoons]

This may be related btw:
https://www.business-sale.com/companies ... ast-670506

I thought the claimed turnover of £20m sounded somewhat optimistic to say the least but the accounts filed at companies house are here :- https://s3.eu-west-2.amazonaws.com/docu ... 18b574773a

They turned over £21m in 2023 and made £1.8m gross profit...

[OneWorld]

Over the last 25 years I've bought a lot of gear from GAK but far less since the private equity-backed management buyout in 2021 when the managers bought the business from the founder,..........................................GAK had a very healthy footfall and a great reputation, it's a shame all round.

This may be related btw:
https://www.business-sale.com/companies ... ast-670506

* Yamaha self-reported the arrangement in exchange for immunity from prosecution

I read comments on the website of the local newspaper, and the shop has been getting panned, people for the main part saying much the same as yourself

[N i g e l]

Will there be a stock sale ?



/vulture circling sound Fx/

[Forum Admin]

I thought the claimed turnover of £20m sounded somewhat optimistic to say the least but the accounts filed at companies house are here :- https://s3.eu-west-2.amazonaws.com/docu ... 18b574773a

They turned over £21m in 2023 and made £1.8m gross profit...

Gross Profit is a meaningless figure. NET profit is what matters and cashflow.

BAX Music in Netherlands are in difficulties too, and the industry rumour mill says some Guitar Center stores in the USA allegedly will be shuttered soon. It's tough out there, globally. Tariffs do not help anyone, nor trade wars, and globalisation... well don't get me started on that topic!

[SafeandSound Mastering]

Never good to see news like this, there will be multiple reasons for this I am sure.

I hope the store workers and admin go onwards to find work that suits them it must be a very worrying time.

[Sam Spoons]

I thought the claimed turnover of £20m sounded somewhat optimistic to say the least but the accounts filed at companies house are here :- https://s3.eu-west-2.amazonaws.com/docu ... 18b574773a

They turned over £21m in 2023 and made £1.8m gross profit...

Gross Profit is a meaningless figure. NET profit is what matters and cashflow.

BAX Music in Netherlands are in difficulties too, and the industry rumour mill says some Guitar Center stores in the USA allegedly will be shuttered soon. It's tough out there, globally. Tariffs do not help anyone, nor trade wars, and globalisation... well don't get me started on that topic!

Yes, I don't know how to read a balance sheet or what most of the numbers mean but a quick google helps... So, for 2023, their turnover was £21m, 'operating profit' was around £14k and at the year end they had assets of around £5.2m and liabilities of £3.2m. To my untrained eye that looks reasonably heathy?

Just an aside, I hope Bax stay solvent long enough to process my son's refund...

[MOF]

So, for 2023, their turnover was £21m, 'operating profit' was around £14k and at the year end they had assets of around £5.2m and liabilities of £3.2m. To my untrained eye that looks reasonably heathy?

That’s a 0.06% return, even the lowest savings rates are better than that.
The liabilities are less than the assets but you have to liquidate to get back the difference.

[OneWorld]

I thought the claimed turnover of £20m sounded somewhat optimistic to say the least but the accounts filed at companies house are here :- https://s3.eu-west-2.amazonaws.com/docu ... 18b574773a

They turned over £21m in 2023 and made £1.8m gross profit...

Gross Profit is a meaningless figure. NET profit is what matters and cashflow.

BAX Music in Netherlands are in difficulties too, and the industry rumour mill says some Guitar Center stores in the USA allegedly will be shuttered soon. It's tough out there, globally. Tariffs do not help anyone, nor trade wars, and globalisation... well don't get me started on that topic!

"......... globalisation... well don't get me started on that topic!"

As it happens I am reading a book on that very subject 'Gobalisation - Making it Work' by Nobel Prize Winner Joesph Stiglitz, and whilst a proponent of Globalisation, it is highly critical of how it has been implemented, and much of what he says has come to pass, and the book was written in 2006! It makes for very interesting reading

[Sam Spoons]

So, for 2023, their turnover was £21m, 'operating profit' was around £14k and at the year end they had assets of around £5.2m and liabilities of £3.2m. To my untrained eye that looks reasonably heathy?

That’s a 0.06% return, even the lowest savings rates are better than that.
The liabilities are less than the assets but you have to liquidate to get back the difference.

Yes, so not so great for the venture capital owners but we don't know how much the buyout cost.

My initial reaction was that their margins were minuscule but they have paid 54 staff and 4 directors salaries before that profit is calculated and I'll bet part of the reason the 'profit' is so small it to minimise their corporation tax burden (they only paid corporation tax on £9000 of 'profit' in 2023).