DEC. 26 I GUITAR CENTER I LEGAL
Guitar Center Fights
On Dec. 16, Guitar Center sent a letter to its vendors stating it might advertise products below vendors' minimum advertised price (MAP) policies.
Signed by John Bagan, GC's executive vice president and general manager, merchandising and supply chain, the letter explained that GC becomes uncompetitive and wastes significant resources when MAP "is inconsistent with actual market pricing." The statement also mentioned that the chain retailer spent $75 million in 2010 to promote products, and it will take "whatever actions it deems appropriate to maintain its competitiveness in the marketplace and to achieve a fair return on its substantial investments in its vendors and products."
"These actions may include competing with and matching the lowest prevailing advertised price in the market, seeking vendor chargebacks or other concessions to restore [GC's] expected return on investment, canceling purchase orders, terminating some or all product lines of a vendor, or taking any other action it deems appropriate," the letter read.
According to the statement, GC will enforce the policy at its sole discretion.
"No complaints from any vendor regarding our actions towards any other vendor will be considered," it read.
Download the letter here.