|With cases reported in all 50 states, COVID-19 has sparked restrictions that have brought the retail music trade to an abrupt halt.
Coronavirus Crisis Cripples Industry
Suppliers furlough workers, retailers close stores, sales dry up. “This is our World War II.”
RESTRICTIONS IMPOSED at the federal, state, and local levels to contain the coronavirus and “flatten the curve” have reshaped perceptions about the potential scale, speed, and spread of economic downturns. After a strong start at the beginning of the year, the music industry has come to a halt, placing businesses large and small into what can only be described as “survival mode.” The widely forecasted 25% second quarter decline in GDP is the largest downturn on record, dwarfing the 6% drop during the 2008 financial crisis. Closures of “nonessential businesses,” limitations on gathering size, and travel restrictions vary from state to state, but the result has been much the same nationwide: music retail revenues have plummeted, prompting widespread layoffs and furloughs. Sweetwater CEO Chuck Surack aptly describes the situation as “our generation’s World War II. Totally unprecedented.” He adds, “There were a lot of weak businesses before, when the economy was good. Many of them will not make it through.”
The various restrictions have forced most of the industry’s leading suppliers to operate on a skeletal basis. Steinway & Sons has furloughed its New York factory staff, while Yamaha, Roland, and Fender have office personnel working from home, to cite just a few. State regulations in Missouri have forced St. Louis Music to temporarily suspend operations. Government orders or not, the industry’s suppliers would be operating at a fraction of capacity in any case due to the evaporation of incoming orders. Faced with health concerns and economic uncertainty, consumers en masse are avoiding discretionary purchases.
"While the Feds seem to be
working up something for companies
that are at least 50 employees,
it’s important that people don’t forget
The current state of the retail network reflects this new mindset. As of this writing, Guitar Center has shuttered 75% of its stores and furloughed 9,000 employees. Top management has also taken substantial salary cuts. In the few municipalities where authorities have allowed stores to remain open, CEO Ron Japinga said, “We’ve reduced store hours and increased the frequency of store cleanings, with particular focus on instruments and interactive areas. Hand sanitizers are easily accessible. We have also closed all in-person lessons.” Sam Ash Music has taken a similar stance, closing 41 of its 46 stores, reducing the hours of the remaining locations to noon to 7 p.m., and furloughing staff. Following orders from the Governor of Indiana, Sweetwater has closed its Fort Wayne call center and had its sales engineers work from home, supported by a skeletal warehouse staff. A message to customers said, “We’re still open for business and taking orders, but like most retailers, our shipping is slower than normal.” Mail order business has been further complicated by a FedEx policy to stop direct signature requirements when delivering packages. Valuable instruments and equipment will simply be left at the doorstep the of delivery address, vulnerable to theft.
With operational restrictions in place for an indeterminate period—some say a lifting will occur by the end of April; others put the date sometime in May—retailers are developing coping strategies. To keep lesson programs up and running, some are having their instructors teach on Skype, FaceTime, or Zoom. White House of Music, which has five locations in Wisconsin and normally teaches hundreds of lessons per week, has temporarily shifted face-to-face lessons to online platforms. “The bright spot of my day has been the willingness and eagerness of my teaching staff to make that happen,” said owner Chris White. “And most of the parents have been receptive as well.”
"This is the major recruiting period
to have kids sign up for band for next year.
If they are not in the class,
we will have no one to rent instruments to
in the fall."
Others are using the downtime to tackle neglected projects. Tracy Leenman of Music Innovations in Greenville, South Carolina said, “It’s dead in the store. But we’re using the time to train employees, to clean rental returns…. everybody’s busy. We have only about 12 employees, so we aren’t being forced to close. If anyone is sick, they can go home. We’re trying to be flexible, and let each employee decide what’s best for his or her own family.” Walter Carter of Carter Vintage Guitars in Nashville added, “We’ve used the downtime to catch up on general maintenance in the store and to step up our online presence. We’ve been very selective in buying inventory. We would rather spend what reserve funds we have on keeping our employees working.”
Geoff Metts of Five Star Guitars in Portland, Oregon is using the downtime to lobby state officials for financial support during the shutdown. “We’re going to try to get across to the Governor that while the Feds seem to be working up something for companies that are at least 50 employees, it’s important that people don’t forget smaller businesses. We employ 20 people, and that’s 20 people who are counting on us to put food on the table.”
"Even if it stops tomorrow,
the fallout in the economy
is going to take a long time to recover.
You just do your best.
You push on, and hope for the best,
and plan for the worst."
The shutdown presents individual retailers with unique challenges. Bill Harvey of Buddy Rogers Music in Cincinnati explains, “In Ohio, schools have closed for at least three weeks, but we are hearing that they may be done for the year. This is the major recruiting period to have kids sign up for band for next year. If they are not in the class, we will have no one to rent instruments to in the fall, and it will have a major impact on our company for the next three years, the typical length of the rental. We are working with teachers to develop some sort of program to handle the situation.”
The most unusual reaction to the shutdown came from Ricky Bright, owner of The Upper Bout guitar shop in Champaign, Illinois. After the Governor ordered “nonessential” businesses to close, he took two guitars from his shop to nearby parks, along with sanitizing wipes and hand sanitizer and a note that said, “This guitar is for public use as you are out for a walk in these crazy times.” He explained, “It occurred to me that maybe we should put some guitars out for people to play if they’re out walking with their families. The state governed that we have to close our doors, which is fair, and I want to do my part. But, you know, this could be it for us. If I’m going to go out, I might as well do something that’s good for the people around me.”
"We’re just doing business today
how business is required to be done today,
and then we’ll evaluate again tomorrow."
Although experts predict that the coronavirus will be contained within the next two to three months, most expect the shutdown to have longer-lasting effects. Expressing a widely held view, Walter Carter said, “‘Flattening the curve’ of the viral pandemic will help those who become sick, but it will prolong the meltdown of our economy to the point where many businesses will have to shut down completely.” Keith Grasso of Island Music in La Plata, Maryland added, “Even if it stops tomorrow, the fallout that you’re going to have in terms of the economy is going to take a long time to recover. You just do your best. You push on, and hope for the best, and plan for the worst—so that’s what we’re doing. It’s easy to get down and think about how bad things are. But at the end of the day, we’re all still here, we’re all still healthy, and we’re in business doing something that we love.”
With the current uncertainty, Gayle Beacock of Beacock Music in Vancouver, Washington succinctly offered the most pragmatic approach, stating, “We’re just doing business today how business is required to be done today, and then we’ll evaluate again tomorrow depending on what’s happening.”