Uh-oh! Fender files for IPO

[Psycho Bass Guy]

This explains all their recent 'lifestyle' market positioning and price hikes. They've kept up very high QC, especially on Asian-made instruments, on lots of mass production for a long time, especially for the MI business, but they expanded too far, diluted their own markets, and often ended up competing with their own subsidaries in areas they already practically monopolized. In practical terms, the only real competiton for most of their US-made guitars is the Gibson Les Paul, their amps are not well-regarded, and they make far too many divergent products of mediocre quality for the price. They'll suffer heavily under short term market expectations; that's exactly what Guitar Center went through and the same people who helmed that mess are driving the boat on this one. I think the biggest long term hit is that their instruments will see secondary market devaluation to prices from 15-20 years ago and with their upcoming drop in quality, the product they have been making for that time period will end up being more desirable at primary retail. Ask Norlin how that worked out for them with Gibson.

[Pilgrim]

Good point.  Gretsch and Guild have to be the most valuable brand names in that group, with Sunn potentially close behind...but only if they'd produce amps of the same type as Sunn, which seems unlikely.

[the mojo hobo]

the most valuable brand names in that group, with Sunn potentially close behind...but only if they'd produce amps of the same type as Sunn, which seems unlikely.

They can produce them, but they also have to sell them, and at a profit to boot.

[Pilgrim]

They can produce them, but they also have to sell them, and at a profit to boot.

You speak sooth, sir.

[Dave W]

Again, Gretsch's value as a brand belongs to Fred Gretsch Enterprises. It isn't part of FMIC's portfolio. They make and market what Gretsch pays them to do.

[Psycho Bass Guy]

Good point.  Gretsch and Guild have to be the most valuable brand names in that group, with Sunn potentially close behind...but only if they'd produce amps of the same type as Sunn, which seems unlikely.

Fender's success with the Sunn brand can best be summarized by a quick reference to the number of amps they currently produce bearing that badge, and CBS's Fender/Sunn products have a more tangible impact on the market recognition of the brand. Vintage Sunn amps are great, but anyone looking to buy a brand right now is going to see a market that only thinks of Sunn as crappy s/s PA equipment completely removed from its vintage guitar/bass amp context. Fender tried to resurrect the brand with allusions to its heritage over ten years ago. It didn't happen. Guild is pretty much their only truly valuable property to sell off. Every other owned brand has been devalued, not enhanced, by their ownership.

To me it looks like they tried to take over the MI world but the economy caught them in a capital bind. One need only look at instrument and amp price trends across the board since 2007 to see that any economic recovery is even farther off for the musician segment than the rest of the general economy. They're still the big dog, but it's healthier in the long term for everyone to get a shot. FMIC's shortcomings are, IMO, reflections of a complacent market dominator. Shaking them out of their stupor may end up being the very thing FMIC needs to survive in the long term. It will be painful for workers in their American and Mexican plants and their Asian producers will no doubt find other clients, but hopefully they'll streamline to quality and innovation. They'll always make Strats, Teles, P and J basses.