Guitar Center Severs Ties With Behringer
THE MUSIC PRODUCT MARKET'S supplier-retailer relationships are always shifting, and usually without much comment. On May 16, however, Guitar Center took the unusual step of severing its longtime relationship with Music Group, parent company of Behringer, Midas, Klark Teknik, and Turbosound. A statement from Guitar Center cites Music Group's "revision to unreasonable business terms late last year and a continuous history of attempting to force unfavorable changes into agreements."
GC's statement continues: "Decisions like this are never made easily. There are rare occasions where the integrity of the relationships and agreements we make with vendors are challenged, despite the potential impact to the bottom line or overall sales. We can't speak for anyone else in the industry, but we'd had enough of watching Behringer try to do business this way. It's not the way we like to work with people and it's not productive. They made some questionable choices that put us into a position to develop a contingency plan. As we re-evaluated that plan several weeks ago, we found that it would allow us to build better relationships with other vendor partners in the category. When Plan B starts to make this much business sense, it became clear we didn't need to tolerate this anymore. We're focused on where we can succeed in partnership with our new vendors and we're excited about the future."
Music Group CEO Uli Behringer responded, "We were surprised by a recent public statement issued by Guitar Center. Over the last year, due to GC's highly publicized financial situation, we were forced to evaluate their creditworthiness. As a result of their credit rating, it was determined that they were a high risk and we were forced to put them on business hold. We certainly respect GC's decision to discontinue business with us and we thank them for our excellent 20-year relationship."
THE MUSIC PRODUCT MARKET'S supplier-retailer relationships are always shifting, and usually without much comment. On May 16, however, Guitar Center took the unusual step of severing its longtime relationship with Music Group, parent company of Behringer, Midas, Klark Teknik, and Turbosound. A statement from Guitar Center cites Music Group's "revision to unreasonable business terms late last year and a continuous history of attempting to force unfavorable changes into agreements."
Music Group CEO Uli Behringer responded, "We were surprised by a recent public statement issued by Guitar Center. Over the last year, due to GC's highly publicized financial situation, we were forced to evaluate their creditworthiness. As a result of their credit rating, it was determined that they were a high risk and we were forced to put them on business hold. We certainly respect GC's decision to discontinue business with us and we thank them for our excellent 20-year relationship."
