Cosmos music is about the size of a large supermarket and it looks like its doing pretty good to me. I think whats important is the business model.There will always be a need for music-equipment store, just like there will always be a need for a ladies' undergarment store or a need for a paint store or a toy store. What there ISN'T is a need for a music, or bra, or paint, or Lego store the size of a major supermarket.
I find the mistake these companies make is to assume that because sales have picked up, that somehow becoming an "empire" is just around the corner, and that having an empire is necessarily their destiny. Like Icarus, they try to fly too close to the sun, and it becomes their downfall.
Bingo. If GC consisted of a warehouse and rich on-line presence, with smaller local locations, instead of multiple supermarket-sized locations that all have to carry as close to the full inventory as possible, they might stand a chance.Cosmos music is about the size of a large supermarket and it looks like its doing pretty good to me. I think whats important is the business model.
As well I think it may be easier to maintain one big store with a big online presence rather than hundreds of stores with an online presence. If you can do online sales what do you need hundreds of money sucking stores for?
As well Cosmos seems to do sales through best buy which must be a decent source of income.
I wonder if Long and McQuade is having any issues. I haven't heard anything but I always felt they were the Canadian version of guitar center.
I know for my self I went from spending 90% of my gear budget there to less than 10%. Since Christmas I've spent 12K on guitars and not once cent went to L&M
From what I've heard (can't verify but it seems reasonable) is that L&M has a real estate branch of the business and has been buying up and moving into small strip malls where they lease to other tenants and it pays for their presence on site.Bingo. If GC consisted of a warehouse and rich on-line presence, with smaller local locations, instead of multiple supermarket-sized locations that all have to carry as close to the full inventory as possible, they might stand a chance.
Of course one of the problems such places face when financial difficulties arise is: Who can you sell the real estate to? That's part of the problem Sears and Toys-R-Us are facing. Great big buildings, and sometimes anchor stores. There are few potential clients for such facilities.
You have to be in a musician to work on the floor at L&M and I understand they don't hire part-time staffers. Only full-time, dedicated employees.Business today needs growth to survive, and sometimes it's not sustainable. It inevitable when everything runs on financing.
I visited a couple in the US and was shocked at how they were set up. The people working there were uninformed and non-musician types, which I feel led to the floor being filled with people who had no business or interest in actually buying guitars and just tire kicking and playing with the floor models. It was perhaps the worse cacophony of sound I have witnessed, and couldn't wait to get out of there.
L&M here and most places I've visited are staffed by advanced musicians who not only understand the products, they have a genuine interest and enthusiasm matching their clients. The boys here in NL are great.
Seems here in BC most of the L&M stores are standalone and not in malls at all. A number of locations too have been constructed as dedicated music stores and not converted fast food restaurants.L&M has a real estate branch of the business and has been buying up and moving into small strip malls