Musical Instruments Stores

SIC 5736

Companies in this industry

Industry report:

This category covers establishments primarily engaged in the retail sales of musical instruments, sheet music, and similar supplies.

In 2010, Dun & Bradstreet reported 9,718 establishments engaged in the retail sales of musical instruments, sheet music, and similar supplies. Total employees numbered 39,979, and annual sales totaled $2.8 billion. The majority of musical instrument stores were concentrated in California with 1,140; Texas with 611; New York with 587; Florida with 557; Pennsylvania with 419; and Illinois with 378. California also accounted for the most sales, with $365.4 million, followed by New York ($178.5 million), Florida ($175.8 million), Rhode Island ($154.2 million), and Texas ($148.9 million).

Musical instrument stores represented the majority of the market, with 6,626 stores comprising more than 72 percent of the overall marketplace. Stores retailing pianos numbered 1,020 and accounted for 11 percent of the market. There were a total of 391 stores engaged in the sale of sheet music, 324 stores retailing string instruments, 312 selling organs, 162 selling keyboard instruments, 104 dealing in percussion instruments, 116 retailing band instruments, 106 retailing wind instruments, and 17 selling brass instruments.

According to a study by Music Trade magazine, sales in this industry increased at an annual rate of 7 percent during the 1990s. Following a slack market in the 1980s, the industry evolved into a $6 billion-dollar trade by 1999. Electronic instruments, particularly keyboards and electric guitars, generated nearly a quarter of all musical instrument sales.

Musical instrument retailers cater to a wide consumer base, ranging from parents of student musicians to professional performers. In general, the industry is dominated by independent family-run businesses. Some firms in this industry succeed within a limited niche, such as sales to schools and senior citizen groups. Industry analysts predicted several prime areas of growth in retail sales of musical instruments as the twentieth century drew to a close. Among the rising markets were sales of student pianos and band instruments, which were expected to increase in accordance with the annual 1.2 percent increase of the number of children between the ages of 5 and 13 in the early part of the new millennium. Additionally, nostalgic-minded baby-boomers displayed a renewed interest in traditional and acoustic instruments--especially guitars. According to Music Trades, the number of guitars sold in the United States increased more than 20 percent in 2006 and 41 percent in 2007 before decreasing slightly in the down economy of 2008 and 2009. In 2009, more than 2.9 million guitars were sold at a retail value of $1.15 billion. Demand for electronic instruments also grew, as home computer sales increased.

The independent retail outlets that dominated the industry faced challenges from the aggressive marketing and low pricing of mail-order discount companies during the 1990s. Some stores dealt with these new competitors by discontinuing high-end inventories that overlapped with the mail-order products. Also during that decade, the impact of superstore-type retail outlets began to be felt. Most imposing among the musical instrument superstores were Guitar Center of Westlake Village, California; Sam Ash Music Corporation of Hicksville, New York; and the Music and Recording Superstores (MARS), headquartered in South Florida. The MARS chain reported $100 million in revenues from approximately 22 stores in 1998. MARS, established in the late 1990s, grew rapidly and went public in April 1999. However, the company, which at one time held the number two position in sales, ended up going out of business. Originally, MARS planned to reorganize under Chapter 11 bankruptcy protection in September 2002, but the company decided to liquidate all its assets instead. At that time, MARS owed musical instrument vendors approximately $13.6 million. In addition, there was about $33 million owed to MARS' prime lender, Congress Financial.

Guitar Center, on the other hand, grew into the number-one instrument retailer in the country. It experienced a swell of growth after an IPO in 1997. The stock value more than tripled within two years, and Guitar Center, which first opened its doors in Beverly Hills, California, in 1964, grossed $391.7 million in sales in 1999. At that time observers agreed that the retailer had effectively saturated U.S. markets on the Atlantic seaboard. With 1,730 employees and more than three dozen stores across the United States in 1999, Guitar Center was the largest public retailer of musical instruments and the largest among the superstore retailers.

Guitar Center continued to further its market presence in the 2000s. In 2001 it acquired New York-based American Music Group, which had sales of approximately $30 million in 2000. In 206 the firm purchased former rival Hermes Music. By 2009 Guitar Center had 210 stores in 40 states, more than 9,500 employees, and sales of $2.3 billion. It also retailed band instruments through its American Music division, which operated about 100 Music & Art Center stores specializing in band instruments for sale or rent. Its Musician's Friend catalog and online sales were another way to generate sales for growth. Investment firm Bain Capital purchased the company in 2007.

Sam Ash Music Corp. was the second largest music store in the early 2010s, with 45 stores in 15 states. Sam Ash Music was privately held and generated an estimated $385 million in sales in 2009 with about 1,700 employees. Founded in 1924 by Sam and Rose Ashkynase, the company remained owned and operated by descendents of the Ashkynases in 2010.

Other significant players in the industry included Sweetwater Sound Inc. of Fort Wayne, Indiana, which purchased music retailer Lentine's Music in 2007 for $4.5 million; American Musical Supply of Midland Park, New Jersey; and Schmitt Music Company of Minneapolis, Minnesota, a family-run private company founded in 1896. Former industry leader Brook Mays Music Company located in Dallas, Texas, went bankrupt after 105 years in business, closing its doors in 2006.

The number-one electronics retailer Best Buy became a competitor in the music industry in 2006 when it rolled out its musical instrument stores. These were "stores within a store," located within already established retail outlets and sold guitars, keyboards, drums, amps, and other supplies.

Trends in the retail musical instrument industry at the beginning of the 2010s included increased consolidation and acquisitions and--for the small and independent music instrument seller--increased competition from superstores and department stores. IBISWorld also noted the possible ramifications of substitute leisure activities, such as online entertainment and video games, on the industry.

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News and information about Musical Instruments Stores

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China Knowledge Newswires; June 18, 2010; 314 words
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...guitar, or other musical instrument. It could be a band...the child out of the store, and your sale is going nowhere. Is your store set up to handle this...More and more retail stores are setting up areas...profitable area of your store...not in sales per...

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