Guitar Center Strikes Gilroy Chord - The Gilroy Dispatch: Business

Guitar Center Strikes Gilroy Chord

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Posted: Saturday, May 5, 2007 12:00 am

Gilroy – Jackson Short started his own rock band named "It's All About," after purchasing a drum set at Gilroy's Guitar Center.

It's been a year since Guitar Center opened its doors to the Gilroy public to showcase everything from acoustic and electric guitars to recording equipment, percussion instruments along with electric cables, books and guitar picks.

Guitar Center is the largest music retailer in the world. It is publicly owned and trades on the Nasdaq under the ticker symbol GTRC. It also owns the largest musical instrument mail order catalog and Web site.

The company posted a $40 million loss in 2006, compared with a profit of $33.5 million during the same period a year prior. Revenue rose 11.7 percent to $628.5 million from $562.8 million in 2005. The loss is attributed to costs associated with a new regulatory rule on how stock compensation is accounted for, as well as costs associated with a folding in Music & Arts Center Inc., which Guitar Center acquired in 2005. The company is due to announce its first-quarter 2007 earnings in a confernce call with analysts and investors Monday.

"There's nothing in the South Bay that has the volume of merchandise that they have," said Stephanie Short, Jackson's mother and a customer since the store opened in March of 2006.

But Short was more impressed with the service she received from the store's employees.

"These are young kids who are in college, and they follow up on everything. They encourage the young kids to come in and be a part of their store," said Short who recalls the time when she purchased a drum set for her son, and had one of the employees set it up for them.

"They have followed up on every single purchase I've made, and they've even called to notify me on the drum sale," she added.

Sales Manager Mario Perea, 29, said that many of the employees have experience in the music field, which is probably why customers such as the Shorts are impressed with the attention.

"They are either a musician or involved in music in some way," said Perea, who was also in a band himself and played guitar and bass. He also has experience in live recording.

Drummer and customer John Thomlinson keeps coming back for the deals.

"Its a one stop and shop," said the current San Jose but former Morgan Hill resident. "They have guitars, whatever you may need, microphones, keyboards, you can get it all right there. I've always got a good deal from them," he added. Thomlinson has 38 years experience playing in and out of bands, and he bought a guitar and sent it to his grandson in Arkansas.

Aside from the deals, trained employees are also a factor in the quality of service provided. Vendor representatives teach the employees the history of vendor guitars, drums and how to sell and inform the customers on the difference between a $700 guitar and a $300 guitar. General Manager Luis Garcia-Viscarra, 32, explained that the more expensive guitars are more luxurious in that they are hand assembled, U.S.A. made, easier to play, the wood and electronics are better quality and they usually come with a case.

Guitar Center provides "Pro Audio" recording services with full studios that offer computer recording or hard disc recording. It also sells keyboards, electric and acoustic guitars, drums and other percussion instruments.

"We have a lot of high-end gear that a lot of mom-and-pop stores don't have," said Garcia-Viscarra. That's why the store opened in Gilroy to be available for people out in the lower South Bay and avoid the long drive from Gilroy to the Guitar Center in San Jose.

The Gilroy Guitar Center is one of 160 stores worldwide. The original store is located in Hollywood and is nearly five decades old. In 1959 company founder Wayne Mitchell purchased a small appliance and home-organ store, and by 1961, he changed the name of the company to The Organ Center. By the late '60s, it was evident that the future of musical instrument lay in guitars and amps, which encouraged the change of name to The Guitar Center.

Sixty to 80 customers a day visit the store, said Perea, and now clients such as Jackson play in bands or have started their own.

"(The band members) have been coming over about once a week. The singer is new but we're doing OK so far," said Jackson. "We got down some songs, and we're going to play at a concert in September," he added.

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