Thursday, March 8, 2012

Fender guitars IPO?

Leo Fender must be rolling over in his grave. Fender Guitars owns a lot of companies including Jackson, Charvel, and has a huge stake in the new EVH brand. They had sales of 700.6 Million last year but executives are sniffing for more money. By going public they are hoping to raise 200 million in capital, 100 million will be used to pay off debt. Remember in 1965 when they sold out to CBS. They kept producing high quality guitars for a few years but then bean counters at CBS made them look for cost cutting ways that hurt the quality of the guitars. Not to say you can't find a decent '70's Stratocaster but the best thing that happened to the company was when Fender Chief Executive William Schultz teamed up with some of the company's international distributors and bought out Fender in 1984. In my opinion, the quality of guitars that are coming out of the USA Fender shop are 1st rate. But there are a lot of boutique builders that are building better Strat style guitars for a better price than what you can get out of Fender's famed custom shop for twice the price. But whats going to happen as boutique companies get bigger and Fender now has to answer to stock holders? And by stock holders I mean fund managers.  The bean counters will start finding more ways to cut cost. If your thinking about buying a Fender custom shop guitar I'm gonna suggest doing it in the next couple of years. Or start researching boutique builders that source most of their parts from the USA. For more on the story read here.

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