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Musician’s Friend
Cuts Jobs

Musician’s Friend plans to eliminate approximately 75 jobs from its Northland distribution center in Kansas City, Kan., according to Galen Erickson, the company’s vice president of fulfillment.

The distribution center includes a call center that will close at the end of February 2010 and a retail clearance store that will close Dec. 30. Erickson said the company’s goal is to retain 25–30 of those employees by moving them into repair, returns processing and warehouse postions.

“We’ve been moving some associates that wanted to move right away,” Erickson said. He added that Guitar Center, the parent company of Musician’s Friend, has two area stores, which also might hire some of the employees.

“It’s important that we gave such advance notice,” Erickson said. “It would be easy for a company to say, ‘We’ll wait until the last minute to get through peak and deliver this news after Christmas.’ When I’ve talked with employees, they've said they don’t appreciate hearing the news but like the advanced notice.”

All employees who remain until the closing dates will be provided severance benefits based on tenure.

It’s Not the Economy
According to Erickson, this decision was strategic rather than a reaction to the economy. The brick-and-mortar clearance store, in particular, suffered due to online competition.

“The purpose of the retail clearance store was to sell returns that were either never opened or lightly used and get some value out of it,” Erickson said. Since its clearance products were turning up on eBay or Craigslist at higher prices, Musician’s Friend decided to take its clearance operation online, too.

“This summer, we started hiring repair technicians, guitar luthiers, and band and orchestra people who could repair instruments [for online sales],” Erickson said. “That’s also where we will be looking to rehire some of our employees. So now, instead of just reaching the Kansas City market, we’re on the Web with a larger customer base and getting better margin for that returned product.”