January 04, 2022 I Cover Story

The Next Chapter

By Daniel Margolis

Menchey Music got its start 85 years ago on the tiniest of profit margins — or at least so the legend goes.

“The company was founded in 1936 by my grandfather, Bob Menchey,” shares Joel Menchey, president of Menchey Music and the newly appointed chairman of NAMM, “and there’s a story about how he sold a saxophone for a ten dollar profit and reinvested the earnings to start the business.”

That first store, in Hanover, Pennsylvania, ultimately grew into a 17,000-foot store, office and warehouse, which changed locations in 2017. At the same time, Menchey Music expanded throughout Pennsylvania, including locations in Harrisburg, Lancaster, Reading and York, as well as three locations in Maryland, in Gambrills, Timonium and Westminster. On average these locations are between 2,000 and 5,500 square feet, and it takes 200 employees to run all that, half of which are teachers.

While Menchey Music has two acoustic piano showrooms, an orchestral string gallery and sells keyboards, at heart it’s a school music store. Menchey described rentals as its “primary core competency.” He pegged rental and repair revenues, print music sales and step-up sales as 65 to 70 percent of the company’s business. Of course, COVID-19 affected this, putting Menchey Music’s rental numbers 48 percent below the previous year’s in fall 2020.

Asked how the company survived this, Menchey quickly cited its longevity. “Well, we’re an 85-year-old company,” he said. “We, fortunately, have stability. From a cash-flow perspective, we didn’t need to replenish those instruments. So, between not having to replenish and taking advantage of the PPP loans, we were able to weather the storm.”

At its peak of offering lessons, Menchey Music was teaching 1,600 students. Today it’s at 700, but is building back up to its previous capacity.

When the pandemic first hit, Menchey Music was closed for nine weeks. When it opened back up, it did all the usual things — mandating masks, checking temperatures, overhauling instrument sanitation, etc. But in October 2021 it took the added step of a vaccine mandate for its staff. According to Menchey, this did require some navigation.

“Obviously we made some exceptions for valid religious and medical exemptions, and we did have a few people leave, and we had a few people get vaccinated who may not have otherwise done so,” he said. “But, fortunately for us, we had a very small percentage of our staff that that was unvaccinated.”

Asked what he would have done differently if he’d known the coronavirus was coming, Menchey immediately mentioned stocking. “Had I known that the supply chain was going to be as compromised as it was, we would have loaded up on inventory in February of 2020,” he said. “Fortunately we had a pretty good inventory position, and we have been selling from that. Actually, from an inventory management perspective, our GMROI ratios have never looked better, but like most other retailers we’re struggling to get new product.”

In terms of e-commerce, Menchey Music was both early and late to the game, in a way that proved fortuitous given the timing of COVID-19. “We opened an online store in 2001, and it was a disaster,” he said. “So we closed it in 2002 and reopened it literally right before the pandemic in February 2020. And while online sales don’t represent a huge part of our sales volume, we’re positive that it enhances our in-store efforts. People are now able to see what we sell, how we price it. We actually can show what SKUs we have in stock by quantity in what location, and that’s been good for retail sales.” Menchey Music now rents instruments right on its site.

And, in a sense, it doesn’t even matter how much Menchey Music sells on its site because, according to Menchey, its brick-and-mortar sales are off the charts. “We are so much higher right now than normal levels, just because of all the ESSER money that’s being sped through our school service channel, and our retail channel is very healthy,” he said, adding that this does come with its own problems. “I would love to just see them stabilize, because we’ve had a better year, but I suspect as the supply chain continues to have challenges it’s going to impact retail sales for probably the next six to nine months, and then probably stabilize to 90 to 95 percent of current levels.”

A Seat at the Table

Asked how long Menchey Music has been a member of NAMM, Menchey is forced to speculate. “Oh boy. I don’t even know. Probably [since] the ’50s,” he said.

Menchey assumed the role of NAMM chairman in July, and outlined his path to it, a path typical of any member of NAMM’s executive committee, or ExComm. He started in July 2015 as secretary; then two years later became treasurer; then two years later became vice chair and chair of The NAMM Foundation, the charitable arm of NAMM; and now has assumed his role as chairman.

While breaking all this down, Menchey mentioned that he really enjoyed his time as treasurer. “I’m sort of a numbers nerd, so I enjoy digging into the books,” he said.

Asked what his financial acumen is doing for NAMM today, Menchey insists it’s probably not as much as one would think. “NAMM has incredible financial controls and our current treasurer, Chris White, is obviously doing a great job of overseeing the financials in there,” he said. “But having a good fiscal background has probably helped in this COVID transition because obviously NAMM has seen a reduction in revenues because we didn’t have a trade show in January. And it’s been very helpful to have the financial background to assist Joe Lamond [NAMM president and CEO] and Derek [Murphy, NAMM controller] in making decisions.”

Menchey explained what NAMM is fundamentally about. “We’re all about promoting music making,” he said. “It’s that melting pot that makes the world a more musical place.”

It makes sense, then, that Menchey points to regularly interacting with others in MI as the most important thing he and his company have gotten out of membership in and involvement with the association. “The networking has been probably the greatest benefit,” he said. “Meeting like-minded people in the industry who have the same challenges and opportunities that we have, and being able to find these people and compare notes and promote best practices has really been the biggest benefit we’ve received both individually and as a company from them.”

But, of course, there are other benefits of NAMM membership, and Menchey recommended its professional development offerings first. “The professional development opportunities are very appropriate and timely for NAMM members,” he said. “When you think of accountants and lawyers, they go to continuing education. We don’t have that in the music industry, but NAMM does provide that. So we always take an advantage of that as a member.”

Another key benefit Menchey emphasized was NAMM’s Best Communities for Music Education survey, and explained why this is so essential. “School music programs are not always universally appreciated by administrations,” he said. “So the NAMM Best Communities effort is an opportunity for us to elevate the awareness of a particular music program. Schools apply for this a designation, and if they’re awarded this designation a NAMM member, i.e. Menchey Music or anyone else, can present the certificate at a board meeting, and it’s a great, warm, fuzzy opportunity to show the school board that the community values music education. We have a number of programs that have won 10, 12 years in a row, and the board almost expects them to win this award.”

Menchey also cited NAMM’s state and federal music education advocacy efforts, adding that he favors the former. “A number of us have gone to the Fly-Ins in Washington, but there are also states’ organizations that have, frankly, a much more direct impact on local music education efforts,” he said.

A big thing NAMM is specifically charged with managing is the relationship between music retailers and music manufacturers and suppliers. Despite recent, highly disruptive changes to the way MI overall does business, Menchey doesn’t see that relationship changing. “I think historically this is an industry that needs both pieces to promote the trade of musical instruments long term,” he said. “I think there are certain manufacturers right now [that] have enjoyed unprecedented growth due to the fact that people were cooped up in their houses and had nothing to do but play guitar. But I think ultimately the retailer-manufacturer partnership is the best long-term solution. And I think NAMM is a great vehicle to promote that.”

Having said that, what does a manufacturer these days really get from a NAMM show? “Well, if you asked me that question 20 years ago, I would think their measure of success would be a drawer full of orders,” Menchey said. “But I really think in 2021, 2022, it’s the annual opportunity to meet face to face with your retail trading partners, show new products, and really get a sense for how your product can be marketed in that dealer’s respective marketplace.”

Not Out Of The Woods

Menchey took over as NAMM chairman during unprecedented times. He noted that traveling the world to support the role is definitely different than it would have been in the past, in that he and Lamond aren’t able to. Regardless, Menchey was quick to state that NAMM is a strong organization that will weather this storm, and was quick to praise the leadership of his predecessor. “Chris Martin was the first one to really lead the organization through COVID,” he said. “He chaired ’19 to ’21, and it was literally in his ninth month that this all started. He did a wonderful job and led us through some really challenging times. We’re not out of the woods. We’ll get there, but it’s just not as predictable as it was six, seven years ago.”

Asked about his plans for the future of the association, Menchey quotes its president and CEO. “Joe Lamond said something a couple of weeks ago; he said NAMM had a great run, and we didn’t know it at the time, but at five o’clock on the Sunday of The 2020 NAMM Show, it was the end of an era. And now we’re moving to the next chapter and it will not be a modification of what it was. It will be a new version, and it’s exciting and positive. And as the one who has the opportunity to lead through this transition, I’m delighted to be a part of it.” MI

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