June 23, 2020 I Cover Story
An Uncomfortable Reopening
The music products industry confronts an uneven reopening — and many questions — in the face of coronavirus.
By Frank Alkyer
As businesses across the nation began to reopen during the past two months, the emotions ran the gamut from exhilaration to caution, from rising hopes to heightened frustrations.
That’s because, at press time, the reopening of American business was as uncomfortable as it was uneven. Some states allowed businesses to reopen in April, others remained shuttered until June. While online juggernauts soared with holiday-like, frenetic sales, brick-and-mortar retailers couldn’t even enter their stores as they watched Amazon, FedEx and UPS trucks whir around their neighborhoods.
Music Inc. reached out to a variety of retailers and suppliers from across the industry landscape to get their take on a pandemic that has changed the way business is done in 2020, and perhaps forever.
It’s June 4, and Sammy Ash is standing outside a Five Guys restaurant in Long Island, New York, getting carryout. He might be the chief operating officer of Sam Ash Music, a 47-store chain spread across 16 states, but right now, he’s Dad, still working from home, grabbing lunch for the family.
“One of the perks of having Dad home all the time is that Dad goes out and he does a lot of takeout,” Ash chuckled. “The office is still closed. This is New York. We’re not essential. Do we have a few people there? Yes. Is our distribution center fully open and going? Absolutely. That’s part of the rules that we’re allowed to do.
“But for the most part, a lot of things are hampered. Getting checks out is a drag. Keeping inventory is difficult.”
Ash noted that many of his suppliers, like Martin, Gibson and Fender, had to close, too. He felt if a supplier had to close for a month, it would mean a backlog of orders for six weeks.
“If you’re closed for three months, that puts you back four months,” he said during a phone interview. “So that kind of stuff is difficult. But our mail-order business? Never saw anything like it.”
Ash is one of many retailers who have seen an explosion in online sales. And for any retailer who could sell online or take orders over the phone, there were definitely products customers were looking to buy.
“We’re seeing an uptick in keyboard sales and, of course, guitar sales from people branching out and wanting something to do at home,” said Rosi Johnson, president of Mississippi Music. “And everybody’s seen that with beginner guitars and drums, too. We’ve had some sales on electronic drum kits, ukulele, too, and any sort of beginner instrument.”
Mississippi Music is located in one of the earlier states to reopen. Mississippi sheltered at home for the first two weeks of April with curbside sales starting in mid-April and the state opening before the end of the month.
Forecasting for May, Johnson was worried and looked at a worst-case scenario, estimating that sales could be down as much as 40%. When the actual numbers came in, sales for her four-store chain were only down 18%, which she called a victory.
Asked when in the past she thought being down by 18% would be a win, Johnson replied, “Never,” with a smile during a Zoom videoconference.
At Menchey Music, an eight-store chain with locations in Pennsylvania and Maryland, stores closed on March 19 and began to reopen in mid-May with the last two coming back online in early June.
Joel Menchey, the company’s president, was one of many who has expressed his frustration at seeing certain retailers flourish while his company remained closed.
“I was very uncomfortable in the beginning,” he said. “It’s rare for someone to tell a business not to do business. It’s a very uncomfortable feeling. We all felt it. It hurt. And as it went on, it got worse. We had our ups and downs. We had our little victories, but it was uncharted territory. Once we got the yellow light to open up — and that’s where we are right now; we’re not even in green yet — it just changed everything. It allowed us to be more positive again.”
Menchey said the first day they reopened stores, the company sold 12 keyboards, helping to breathe some life back into the piano side of his business and give his sales team a little hope.
One thing that remains unclear is what will happen with schools in the fall. And that could be more complicated and chaotic than reopening businesses with each school district making the call to go back to the classroom, continue online learning from the spring or create some hybrid of the two.
“Obviously all eyes are on September to see what next year looks like,” Menchey said. “If I had to guess, it seems like, with the prospects of staggered schedules and obvious job losses for some of our customers, I’ve got to believe rentals are going to be down. I have a feeling the string business will be up because it makes a lot more sense to play a stringed instrument than one where you’re blowing through it and creating droplets. So, it’s anybody’s guess, it really is, but we’re preparing for all scenarios.”
At Strait Music in Austin, Texas, Clint Strait, the company’s vice president, said his schools are scheduled to start on time in the fall, but his band directors lost the valuable recruiting season for next year’s beginning band programs.
“We do a lot of spring recruiting here,” Strait said. “We’re signing people up in March, April, May and all that got canceled. So, it’s like, ‘Oh my gosh. We’ve got to let these people, let our directors basically send them to us.’ Everything will be the same. It’s just we’re not going to sign them up at the middle school on a Saturday. They’re going to go online or come to our stores.”
One of the projects Strait Music undertook during the pandemic was beefing up its online services for the school market.
“We’ve had online rentals, but now we’re really getting our accessory packs and everything set up by school,” Strait said. “Now you can go to my website and search for a Hill Country Middle School, and everything you need is there.”
As retailers have had to improvise, so too have suppliers hoping to help out.
Larry Morton, president of Hal Leonard, said his company saw the pandemic’s effects on business coming as his company made some rapid adjustments to help retailers.
“We have a massive distribution facility,” he said. “We have great online capabilities. So, when dealers were trying to figure out how to handle curbside service and all this, we quickly moved in. We expanded our drop-shipping and fulfillment services.”
As a result, the company is doing fulfillment for more than 1,100 retailers. Beyond that, Hal Leonard made an even heavier push to sell digital folios on the company’s websites under a new program called Prof-IT. When a customer goes to check out, Hal Leonard now offers a box asking them to choose a music store in their area. The customer clicks on the box, and the retailer gets a commission.
For Dansr, the distributor of accessories by Vandoren, Denis Wick and others, the school year being up in the air means retailers placing master orders will be up in the air as well. The solution? Ensure there’s a supply for whenever decisions are made.
Mike Skinner, president of Dansr, said the company stocked up on inventory while it had cash on hand so that retailers had options until the school year is sorted out.
“We told everybody, ‘Order it when you need it,’” he said of the company’s added flexibility. “We know that there’s going to be a change in how school music is taught for a while, at least 18 months, if not two school years. We want to be there to help.”
Over on the audio side of the industry, Scott Goodman, CEO of Zoom North America, said his company has been lucky to have the exact products customers would want during this pandemic.
“The third week of March, things started to melt down,” Goodman said. “You could sense the frightened nature of the customers, and everyone out there. The phone stopped ringing. Orders stopped coming in. And, like everyone, we had no idea where this was going to go. We started working on different models of 10-, 20-, 30-, 40-percent reduction in sales, different cost models. And, we were preparing for the worst.”
The worst hit for two weeks before Goodman saw a dramatic shift.
“All of a sudden April came around, and orders started coming in, and more orders started coming in, and more orders started coming in,” he said. “And we were like, ‘What is happening here?’
“I’ve got to tell you, it’s lucky. All we do is focus on making great product. We don’t focus on making great product to stay at home. It was sheer luck.”
Of the executives interviewed for this article, only Zoom and Dansr didn’t have to furlough or lay off staff so far during the pandemic.
Every executive who had to send employees home called it the most difficult thing they’ve ever done. And, at press time, all had called back or began to call back staff, with every executive speaking effusively about their employees.
“From day one, I told everyone your job is not something that you need to be concerned about,” Goodman said. “We have a healthy company with a healthy balance sheet and keeping a job is not an issue.
“When the whole thing started, a lot of our associates, very naturally, were fearful,” he added. “I’m really proud of the way we just buckled our seat belts and said, ‘We’re going do everything that we possibly can to keep the business humming.’ And we did. And they did.”
“I tell you, there [have] been surprises,” Mississippi Music’s Johnson said. “And that was a really good thing, just knowing how loyal our employees have been, and they were ready to do whatever they needed to do. I felt like I had somebody there to help me, which I needed with all this going on.” MI