Henry on marketing and brand

[PhilT]

http://www.marketingweek.co.uk/trends/gibson-provides-a-stage-for-rising-guitar-stars/4002184.article

[dadagoboi]

"...But we turned the company around and have been growing it at roughly 30% annual compound rate since 1986."

What is a compound growth rate?  Must be some new fangled economics he learned at Harvard.  If it's like compound interest it means the company has grown 30% since 1986.  Nothing to crow about.`

[Rob]

I thought he was saying 30% PER YEAR over that time. . . ..   

[dadagoboi]

I thought he was saying 30% PER YEAR over that time. . . ..   

I think that's what he'd like you to believe, just like the BS he's spouting about how Gibson cares about small music stores.

[Dave W]

Compound Annual Growth Rate -- note the example

30% CAGR since 1986 is nothing to write home about, though it's not bad. Of course we don't know if it's accurate since the company is privately held.

[dadagoboi]

Thanks, Dave!  I should have done more research before shooting my mouth off.

I guess 30% is possible, Fender claimed a 32.8% CAGR from 2009-2011 in SEC filings.

Interesting Report:
http://www.mainstreammanagement.com/pdf/musical-instruments.pdf

The industry is expected to grow at a compounded annual rate (CAGR) of 3% through 2013. Industry
revenue for 2009 decreased marginally due to the impact of recessionary conditions domestically,
a slight decline that industry experts considered a strong indicator of the relative position of musical
instruments in the consumer purchasing world. In addition, industry revenue is projected to again
decline slightly in 2010. The reasons for these slight declines relate to the demographics of the purchasing
community and the continued recessionary conditions. However, significant growth from 2011 through 2013
is forecasted, with experts predicting annual increases at the rate of 6% for 2011, 8% for 2012 and 6% for
2013, respectively.

[Dave W]

Thanks, Dave!  I should have done more research before shooting my mouth off.

...

You were just speculating, based on Henry's personality. 

And you may be right about it being new-fangled economics. It sure looks like a way to bamboozle creditors, rating agencies and investors. Another way to make things look better than they really are.

[PhilT]

He also made the 30% CAGR claim in a NYT interview in 1994. But his profile on Gibson.com says "20% over the last decade", as does an interview with Larry LeBlanc in 2010.

Some of the growth will have come from the acquisitions. The interesting figure would be the like-for-like growth of the guitar business, but it doesn't look like he wants to tell us that.

http://www.nytimes.com/1994/03/13/business/saving-gibson-guitars-from-the-musical-scrap-heap.html?pagewanted=all&src=pm

http://www.gibson.com/press/press_juszkiewicz.asp

http://www.celebrityaccess.com/news/profile.html?id=535

http://www.independent.co.uk/news/business/analysis-and-features/henry-juszkiewicz-gibson-from-requiem-to-mass-profits-434878.html

I wonder if Tony and the Tycoons are on Youtube ....