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Last month, Sweetwater sold a majority stake to private equity firm Providence Equity Partners. Founding CEO Chuck Surack will step aside (but will be Chairman of the Board). COO John Hopkins will step up to be the new CEO (for now).

Perhaps Providence Equity does better with Sweetwater than Mitt Romney's Bain Capital did with Guitar Center.

https://www.provequity.com/news/providence-agrees-to-invest-in-sweetwater
https://www.wane.com/news/local-new...r-providence-to-take-majority-ownership/

http://forum.pianoworld.com/ubbthre...nter-announced-restructuring-friday.html

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Sad news IMO. I saw what Bain Capital did. I don't blame Chuck Surack for getting what he can after a doing it for how many years. They probably won't give the candy in the box anymore because you know that cost money frown


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Sorry to hear this, Sweetwater was my favorite place to visit. My wife has a friend in Ft Wayne, she'd drop me off at Sweetwater like a kid spending the day at the pool.


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Don't jump to conclusions. This could be their road to recovery after the covid-induced business downturn.
Originally Posted by MarkL
Sorry to hear this, Sweetwater was my favorite place to visit.

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Online musical instrument sales are booming due to covid.

Rolling stone magazine


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Online music instrument sales rose dramatically in 2020. “We’re now selling a thousand guitars every day,” says the CEO of Sweetwater, which posted more than $1 billion in annual revenue for the first time

Last edited by Purdy; 08/25/21 08:47 PM.

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Originally Posted by Purdy
Online musical instrument sales are booming due to covid.

If they are in stock. Shortages hit sales a lot.


Wise men speak because they have something to say; Fools because they have to say something. (falsely attributed to Plato)
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Achieved by their ongoing mission to invoke the 'Sweetwater Difference' in all areas of the business, the company served over 1.5 million unique customers with musical equipment purchases in 2020, up from just under 1 million in 2019. The influx of customers and the process in which Sweetwater serves them, which has been over 42 years in the making, is the catalyst that helped propel the company to cross $1 billion in revenue in 2020.

I imagine but sweetwater did not have a covid induced business downturn. Quite the opposite.

And the music online industry in particular has done very well as manufacturers struggle to keep up with demand and also set sales records.

https://www.sweetwater.com/about/press-releases/00450

https://guitar.com/news/industry-news/fender-sales-record-2020/

https://musicstrive.com/guitar-sales-statistics/

Now do all of those instruments go into closets and sales shrink as things open up again or is this trending a boom in the music world?


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Originally Posted by MacMacMac
Don't jump to conclusions. This could be their road to recovery after the covid-induced business downturn.
Originally Posted by MarkL
Sorry to hear this, Sweetwater was my favorite place to visit.

These high-finance things .... mergers or acquisitions or partnering of relatively-smaller-with-larger firms, do not shake out/settle right away. I recently bought, via phone, some accessories from Sweetwater . Since then and as recent as the past day or two, i have searched on line for many & various audio and or DP gear, and Sweetwater product pages with seemingly in-stock items, are still among the hits ive looked at .... this may be just a front in front of the scenes for what may really be going on behind the scenes, but whatever is going on back there, for now it appears that Sweetwater is still in business and has not, yet, hung up a “ we are folded, nothing left but dust bunnies, out of business “ sign 🙂


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Is it possible sweeteater starts making stuff? Why do they need the money?

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Chuck Surack, Founder and CEO of Sweetwater, said: “We are thrilled to partner with Providence to help accelerate our next phase of growth and bring the ‘Sweetwater Difference’ to even more customers. I am incredibly proud of the growth our company achieved over the last year, which would not have been possible without the dedication of our employees and world-class team of music gear experts. I am confident this growth equity investment will allow us to reach new heights and further our mission of enabling customers to make music and pursue their dreams.”


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.... the answer may depend on what the plans for the next phase were, are or still to be determined....

My retail interaction with them put me to mind of having worked over 20 years in supporting pre & post sale the product offerings of my employer ..... i somewhat anxiously await the next phase.


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Private Equity firm Risk Capital Partners acquired UK on-line musical instrument seller GAK (Guitars, Amps & Keyboard Centre). GAK is based in Brighton, West Sussex.

https://news.sky.com/story/entrepre...ce-collection-with-gak-purchase-12399873

Private Equity firm SKG Capital acquired UK music stores Dawsons in December 2018. In 2020, KPMG was appointed as administrators with additional insolvency activity this month.

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To say I was 'sad' when I heard this is an understatement, but the fact that the CEO and COO are sticking around is at least somewhat of a good sign. The article I read said that the investment firm recognized that Sweetwater culture is what got them to where they are. One would think they'd be hesitant to change that, but I'm sure none of us would be surprised if they did.

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I wonder how much debt they will incur with by the private equity firm. This is what happened to Guitar Center:

https://5mag.net/features/guitar-center-bankruptcy-debt/

Quote
At the time of the sale, Guitar Center — described as having a “dominant retail position in a high service business” by analyst Gary Balter — held about $200 million in debt on $534 million in yearly sales. This isn’t great, but it isn’t atypical of a company undergoing expansion and was manageable in almost any circumstances.

The Bain LBO immediately saddled Guitar Center with a $650 million term loan, $750 million in notes and a $375 million credit facility as a result of the buyout.

Despite refinancing, debt-for-equity swaps and transfers of ownership, Guitar Center has never recovered from this and never will.

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PE firms might aim for up to 80% or more of purchase price pushed to debt holders but that varies wildly by time, industry, company, debt markets, fed printing, interest rates, etc. Typical public information may indicate lower leverage but actual leverage may differ significantly.

In the future, we may see some SEC filings with a bit more detail related to debt and Sweetwater. Or not.

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Good riddance, worst company ever.

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Originally Posted by mrpanoff
Good riddance, worst company ever.

Interesting how consumer's experiences can vary. This is almost exactly the opposite of my experiences with Sweetwater.


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I never had issues with Sweetwater.


Wise men speak because they have something to say; Fools because they have to say something. (falsely attributed to Plato)
Vlad,
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Also, it's interesting how people frequently express opinions in the superlative.
Originally Posted by mrpanoff
Good riddance, worst company ever.
Things are seldom good or bad anymore. Things are the absolute best. Or the rock-bottom worst.

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I've used Sweetwater a couple of times, and in my opinion they are no better and no worse than a number of online middle-men.
I prefer Adorama if they have the items I'm looking for, but would use either one if the price was better.

The one thing that stood out about Sweetwater (at least to me) is that they could get you a representative familiar with the item that you are interested in to talk you through the pros and cons.
Their staff always seemed knowledgeable, polite, and patient. I hope that continues under the new regime.


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“Sweetwater”, “Adorama”, etc… what is wrong with these people?

I simply cannot reconcile the thought of buying an expensive piano/keyboard from a place that sounds like an amusement waterpark. Would you buy an NU1X from a placed called Water-Country? My point exactly; because when you think Water-Country you think of water, and long lines, and over-priced amenities/food, but not pianos and/or other corresponding items; like headphones, for example.

I must admit that I can’t wait for “new-management” to take over, and if they’re listening I set forth a suggestion for renaming the ‘store’ to something like this:

Foster & Sons!


I’d have no problem buying an expensive piano from Foster & Sons because the name implies pedigree passed from Papa Foster all the way down to Foster Jr; and these things matter to me.

Who’s with me?

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