laTeST - Music & Sound Retailer

M&SR: As far as sales go,
what percentage is in the U.K,
what percentage in the U.S.,
and what percentage is in the
rest of the world?
How: It’s changing quite dramatically.
I’d still say 40 percent is
in the U.K. But about 40 percent
is export. America is only about
12 to 15 percent of our worldwide
business. It’s out of step with our
other worldwide markets. This
year, we’re having a big push
in America and are launching a
lot of new products. Part of the
reason for the lower U.S. number
is America has a lot of homegrown
string manufacturers. So it’s tough
for an outsider to break into the
market. But Guitar Center took on
our range of electric strings last
year. That was great. Now, we are
suddenly in more than 200 shops.
Guitar Center is doing a good job
promoting the strings. The growth
in America will come from guitar
string sales. I think more than 10
guitars are sold for every bass
that’s sold.
M&SR: Tell us about your
big push into America and the
promotion you had for U.S.
retailers.
How: We had a promotion at
the NAMM show. We offered very
competitive prices for the dealers.
We brought out two dealers to
England. We also have a new sales
effort in the United States. And
Dave Phillips is on board. He does
a lot of PR for us. Dom Fairbanks
is working for us in an artist relations
role. He will hopefully work
to get us some new American
endorsees. That’s a difficult job because
many are tied up with American
string companies. But I’m
confident we can make progress.
NAMM this year was the busiest
I’ve ever seen. I’m not sure if that’s
because we went more upscale
on our booth. But whatever the
reason, I’ve never seen our booth
humming for the entire show.
We’re mixing ingredients into our
pot that have been working. Last
year, our business grew by about
30 percent. I’m quite pleased with
that.
M&SR: You had 30 percent
growth in 2009, a very difficult
thing to do. Some who broke
even felt they were successful.
What were the keys to that
growth?
How: We have a lot of markets
around the world. In some cases,
we weren’t with the right partners.
The right distributors. As hard as
I’ve tried during the last 10 or 12
years to get those guys focused on
the brand, we couldn’t really do
it. So we had to make some key
changes in key markets around
the world. Those changes made
the floodgates open in certain
markets. It was as though we were
being held back due to distribution
we didn’t want. So we switched and
the results were pretty immediate.
In Spain, for example, we had
a 400 percent sales increase. But
having said that, we weren’t selling
anywhere near as much as we
should have been selling. You have
to put it into perspective. But for us
as a company, that was really good.
Improving the distribution led to
sales growth. A lot of our growth
has come from the six-string electric
and acoustic guitar.
M&SR: Another advantage
perhaps is you’re selling a
lower-price item. Not a multithousand-dollar
guitar. Is that
true? If so, how does that help
you?
How: We are by no means the
biggest string company, but for
the price point of our products,
we have a great product to work
with when they say the market is
down. We haven’t really been that
affected. People are still going
out to buy their strings. They are
not upgrading their guitars, but
accessories seem to be pretty
resilient when the market goes
south. The string market is a good
market. For a company like us
to grow in that market, we’ve got
a lot of work to do. We can have
great growth though. There’s a
lot of low-hanging fruit to pick up.
The other thing that has helped us
regarding exports is the strength
of the pound. Our government has
tried to keep the pound overvalued
for many years. Finally, the pound
has been under so much pressure
that it has gone to a price where
it should have been. That gives
British manufacturers and exporters
a great boost. Especially when
many of our competitors come
from America where they use
the dollar. Our prices have come
down. In some cases, we’ve been
able to raise our prices and still be
cheaper. It’s a trade off because we
buy some raw materials in dollars.
32 April 2010