...the company would “take whatever actions it deems appropriate” to correct the problem. Bagan noted that Guitar Center spent $75 million on advertising and promotion in 2010, and that “when we make the decision to invest the resources necessary to properly support a vendor or product line, we do so based on our forecasted return on this investment. This forecast is based in large part on our expectation that where a vendor has established a MAP policy, the actual advertised pricing in the market for covered products will be consistent with that policy.”

Bagan indicated that if return on investment doesn’t meet forecasted goals due to other retailers’ consistently violating MAP policy, Guitar Center would take unilateral action. “Guitar Center and each of its brands will take whatever actions it deems appropriate to maintain its competitiveness in the marketplace and to achieve a fair return on its substantial investments in its vendors and their products,” he said. “These actions may include competing with and matching the lowest prevailing advertised price in the market, seeking vendor chargebacks or other concessions to restore its expected return on investment, canceling purchase orders, terminating some or all product lines of a vendor, or taking any other action it deems appropriate.”

Bagan also said the policy would be enforced on a unilateral basis and that “No complaints from any vendor regarding our actions towards any other vendor will be considered.”

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