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Post subject: Re: I was wondering about that Fender IPO...
Posted: Tue Oct 08, 2013 1:23 pm
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arth1 wrote:
Drew365 wrote:
I'm very interested to see what Fender offers for online ordering. If they offer as many options as Carvin does, it will be a huge success. If all they do is offer a rehash of what is available on their stock models, than it will be a big ho-hum. At Carvin I can order most of their models with an ebony fb, ss frets, 22 or 24 frets, tremelo or tune o matic or string through. Lots of options to keep you dreaming. I hope Fender is smart enough to see the real potential.


I'm not sure about that. Scarcity drives up value, not variety. Too much a-la-carte reduces value.
So while it can generate more volume, it doesn't necessarily mean more profit, and it certainly won't make a good investment if someone else can order the exact same next year.

I think I'd be happier if Fender reduced the number of offerings, but varied them more from year to year.
They're selling a dream, they're selling living history, and they're selling the user the feeling that he gets something special. If I eat at a buffet, I don't feel like I get something special, no matter how much I get to pick and choose.

What's the point of a custom ordering system if you get force fed someone else's choices rather than your own? I have a Carvin with features that I couldn't get on any other brand. I'm planning on ordering a second Carvin. If I could get a Fender the same way I'd be interested. When I'm playing my guitar I don't care what it says on the headstock, I care how it responds to me. If you don't know, Carvin offers excellent quality. Their resale value sucks but I don't buy guitars as an investment. So I'm more interested in getting what I want now, not what the next owner may want ten years from now, or what the resale value may be ten years from now. So in short, if I can't order a Fender the way I want it, I won't be buying a Fender.

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Post subject: Re: I was wondering about that Fender IPO...
Posted: Tue Oct 08, 2013 1:39 pm
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Solid Body Love Songs wrote:
mhowell wrote:
With respect to FMIC, can they continue to milk Mr. Leo's products with their cheaper imitations indefinitely? Granted, reissues practically saved the company in the 80's but can that go on?

The Fender guitar market is saturated with quality used instruments. Shop around and be patient and you can find MIAs for less that $600 and MIMs in the $200 range. How much does that affect the new guitar market?


Last question first, at auctions on the southside of this city you can pick up new Mercedes for pennies on the dollar cash customers only. Will that hurt sales of new Mercedes, if anything it helps by keeping a desirable automoble in the public eye.
MH, are you asking if Fender will grow, yes perhaps not as fast as some would like but yes. You know my opinion about the "cheap imitation" misnomer, I can make 50 dollars playing a squire bullet just as easily as one of those mega-priced custom shop rigs. Set the guitar up then tune up and play, worry about cheap when you have 5K burning a hole in your pocket lol. 8)

I play through a used $60 mustang I. I could afford a couple of spares at that price.

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Post subject: Re: I was wondering about that Fender IPO...
Posted: Tue Oct 08, 2013 7:19 pm
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brotherdave wrote:
mhowell wrote:
I do not read WSJ and keep up with market trends and financial issues etc so I can only speak from intuition but I think Fender is in a trap.

With respect to FMIC, can they continue to milk Mr. Leo's products with their cheaper imitations indefinitely? Granted, reissues practically saved the company in the 80's but can that go on?

The Fender guitar market is saturated with quality used instruments. Shop around and be patient and you can find MIAs for less that $600 and MIMs in the $200 range. How much does that affect the new guitar market?


I disagree about Fender being "in a trap." That would have been a more accurate assessment in 1985 though and I would have agreed more then. FMIC over the past 5 years has taken some very forward thinking steps to insure the future growth of the Fender brand. While budget import versions of the original Strats, Teles, Precisions and Jazzes have been and will continue to be part of their offerings, it is totally necessary because the market requires it. If Fender/FMIC doesn't have offerings in this price range others will fill the demand and FMIC loses the budget market.

After decades of re-Stratting the Stratocaster and re-Jazzing the Jazz Bass, in the past few years Fender has expanded their offerings in a way I've not seen since the early CBS era when they went in so many different and new directions in such a short time it was as if they were exploding with new ideas. Many of those CBS creations fizzled but were nonetheless creative and forward thinking.

In the past few years some real home runs have been hit you might have missed. The Jaguar Bass has been a good seller for example in all quality levels and price points.

Fender's ukulele line gained immediate respect in the uke community with one or more of their recently introduced models populating several "TOP 10" lists, especially those where value for the dollar is a primary consideration. The uke community is usually very slow to accept new offerings but embraced the Fender ukuleles very warmly. More warmly than the Gretsch ukes which to me are just as good in most regards. Granted this isn't a real high profit price point, but sell enough of them and you make money. The Fender ukes are selling well because they are really good ukes and the quality control on the uke line has been exceptionally tight. I don't know who was behind the uke project but they have obviously done a great job all around.

The Big Block P-Bass of 5 or so years ago was a non-traditional Fender electric bass that I count as a precursor to the recent introduction of the Dimension Series basses that are offered in a wide variety of models. Other than the fact they have 4 or 5 strings the Dimension is so unlike any Fender P or J bass that it is almost overwhelming. The Dimension evokes a Leo Fender flavored vision of a good electric bass, yet is as different from a P-Bass or J-Bass as a Stingray or an ASAT. If one could clone Leo Fender today and have this Leo clone design a new electric bass model taking into account all brands of professional basses that came before, I can see the new Dimension series being the result. It is very Leo-ish, yet cutting edge. Fender has made a multi-model commitment to the Dimension Bass at several price points. It will be around a long time, maybe forever.

In the past two years the Cabronita series has dressed up by dressing down and functionally refreshing several revered Fender guitar and bass models. I've really enjoyed the Cabronita direction. The Cabronita treatment emphasized simplicity of basic design from outward appearance yet are electronically refined internally so that they are tonally totally different from their inspirations.

The recently introduced Telecaster Thinline Super Deluxe is so unlike a Telecaster, other than the headstock shape, that I'd count that as a completely new model. It has some cosmetic elements of the old Thinline CBS era Teles but otherwise is a new design.

It isn't all new designs, as Fender has recently resurrected and updated the long discontinued Coronado and Starcaster series, neither being Leo Fender designs. The Pawn Shop and Modern Player series are both big sellers too.

Perhaps more important than new models is the forward thinking Fender displayed in the expansion into emerging markets over the past 2 years. Fender has moved into China in a bigger way than any other guitar maker or any other US based business it's size that I know about.

Like all US based brands that make some budget models in China, (or like the western marketed brands based solely upon Chinese made instruments like SX and Jay Turser who actually built the value reputation for Chinese guitars in the first place,) Fender moved into China for their manufacturing capacity and low cost for decent workmanship. However unlike any other brand, Fender has also built a distribution, dealer and support network within China on a scale unprecedented for a US based guitar company outside of North America. Fender is in a very unique position in China compared to any other western based guitar business.

It is easy to envision the same "marketing start-up" model Fender is successfully pulling off in China right now being replicated in markets like India plus even some former Soviet states where people with growing disposable incomes have a hunger for decent electric guitars and amps in the Fender flavor. The potential marketing opportunity in China and India is unprecedented and Fender seems to be the only US based electric guitar brand making more than a token effort at actually marketing and supporting their product in these emerging markets.

This global expansion is perhaps even more forward thinking than any new guitar design itself and has more long term earning potential than any new model would.

Far from being in a "trap" Fender has gone global and the long term potential financial rewards are astounding to contemplate from the expansion of the Fender way of doing business into emerging markets with little to no experience with a USA based brand. The global reach being initiated over the past 3 years is ultimately what will insure the brand's longevity and growth potential.

More intangible, yet perhaps even more valuable to global civilization as a whole, is the goodwill the Fender way of international marketing has the potential to create for other things American. This can not be undervalued. Yes, Fender has a chance to make a financial killing in emerging markets, but more than the earning potential from the sheer volume of consumers who happen to reside there Fender is bringing some of what is good about the west to places where the USA hasn't exactly been famous for doing good. They are in essence catching China up on 60 plus years of Fender's contribution to American music history and the overall "Fender-Lifestyle" if you will. This is not only good for Fender, but long term could be good for other USA based businesses and brands. It is even good for western music in general. If nothing else comes of it, then it is good for growing world understanding of what musicians have known in the west for over 60 years. Fenders make good music and good music can unite us all.

I honestly feel better about Fender's future now than at any point in the past 20 years. You can too.

You work in marketing?

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Post subject: Re: I was wondering about that Fender IPO...
Posted: Tue Apr 29, 2014 8:50 am
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brotherdave wrote:
I honestly feel better about Fender's future now than at any point in the past 20 years. You can too.

+1111! Not to dredge up this old thread, but does anyone have the actual official Fender IPO paperwork? A link or a file they could send me? I've done a search but can only find financial commentary and not the actual prospectus.


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Post subject: Re: I was wondering about that Fender IPO...
Posted: Tue Apr 29, 2014 9:56 am
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I don't disagree with BD's assessment that Fender needs to keep the bargain offerings. They do. However, Fender seems to glut the market as they actually compete with themselves. The lower end Fender models actually compete against the Squiers. Honestly, At this point they'd be best to keep Fender a US company, and then just thin the Squier/Import heard and put it all under the "Squier by Fender" banner. The lower end models hurt the Fender name. There should be no such thing as a "Fender Starter Pack". That's what you have Squier for. The sad thing is there are tons of redundancies in the Fender line, but also some holes, too. Yet they spend their energy competing against themselves instead of trying to be the best company they can be. I know I wouldn't be investing in this when it comes around.

As far as the GC fallout when it happens. Any wonder why we're seeing the ADE now? Simply cut out the bog box middle man and go direct to customer.

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Post subject: Re: I was wondering about that Fender IPO...
Posted: Tue Apr 29, 2014 6:17 pm
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OK, I finally found the FMIC S-1 Registration. All 161 pages of it. http://www.nasdaq.com/markets/ipos/filing.ashx?filingid=8089224#D293340DS1_HTM_TOC

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Post subject: Re: I was wondering about that Fender IPO...
Posted: Wed Apr 30, 2014 2:30 am
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Fender opening up online sales is a good idea, but limiting to the US only is a waste of time. Open the design experience and the online store internationally and the dollars will roll in.

If GC goes under, I see Fender downscaling USA production and enhancing their China & Mexico production facilities.. That's if FMIC own facilities in China. It's the only way I can see them adapt to what the market is dealing right now & I just cannot see it any other way. Get your American standards & Specials while you can..

This makes me wonder what will become of Fender Japan, whether or not they will be affected. I have heard ESP have scaled back on their production also..

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Post subject: Re: I was wondering about that Fender IPO...
Posted: Wed Apr 30, 2014 3:12 am
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TheKingofPain wrote:
I don't disagree with BD's assessment that Fender needs to keep the bargain offerings. They do. However, Fender seems to glut the market as they actually compete with themselves. The lower end Fender models actually compete against the Squiers. Honestly, At this point they'd be best to keep Fender a US company, and then just thin the Squier/Import heard and put it all under the "Squier by Fender" banner. The lower end models hurt the Fender name. There should be no such thing as a "Fender Starter Pack". That's what you have Squier for. The sad thing is there are tons of redundancies in the Fender line, but also some holes, too. Yet they spend their energy competing against themselves instead of trying to be the best company they can be. I know I wouldn't be investing in this when it comes around.

As far as the GC fallout when it happens. Any wonder why we're seeing the ADE now? Simply cut out the bog box middle man and go direct to customer.


It is far and away past the point of a corporation to be able to focus only in North America...
We are now irreversibly entrenched in a global marketplace... Expansion dictated profitability decades ago, even centuries.... Back in the 1900's East Coast based corporations were moving manufacturing south and west in search of lower production costs... It is no different today with corporations having expanded overseas.. The irony is that as companies set up in the midwest, and the work force became wealthier, costs of living rose, thereby necessitating wage increases which becomes a vicious circle.. However corporations seek to keep overhead down all the while increasing profitability.... Which sooner or later means that a manufacturing base moves further out in search of reduced labor costs.....
There are more variables to this equation of course but that is a large part of the equation...

As far as the Big Box Factor, that is all about leverage... Debt Ratio's rule where Wall Street is concerned. An IPO is about reducing debt while increasing revenues... Question is what is truly the debt load versus debt reduction capability.... Is growth feasible and will that growth prove to be profitable..... ??
Guitar Center functions very much like all Big Box stores, their profitability is based on a finite timeline. They set up in a locale and stay profitable until their consumer base becomes saturated... Then relocation becomes the norm and the process begins again...
However a glipsch in that business is the online purchasing capability of consumers... That is a whole new form of leverage.

Should be interesting to see if GC will continue to, reduce debt / interest loads or become a business model similar to what we have seen in the american mall... In other words will the retail locations become obsolete and will those losses be absorbed or the final fulcrum.. ??

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Post subject: Re: I was wondering about that Fender IPO...
Posted: Wed Apr 30, 2014 5:39 am
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What I mean is using overseas instruments imported to the US as "Squiers", and the USA models as "Fender" domestically. Fender has destroyed it's reputation as a quality instrument maker with import product. As someone who works in logistics for a large international manufacturer as a day job and has over 20 years in MFG and LOG experience you see big companies doing this all the time. It's simply a second part number with a different badge sold under the subsidiary when imported to the US. Fender Japan used to do this but with both being branded Fender. They have Domestic and Export models. You'd simply use the Export line with the different decal and serial number strain and then instead of selling it to Fender. You sell it to Squier.

Fender simply does not use it's Squier brand well. Since the import models generally have cheaper components and in some regions much looser QC restrictions DON'T brand them with your flagship name. Simply put. Make your "low cost alternative" simply that. An alternative.

"When you're ready" is the CS motto. However, it should be Fender's motto. The starter packs, import standards, modern players, ect. Those should all simply be Squiers domestically. Sure in their country of origin they can be Fenders. However, here we have a glutted market. Fender Starcasters at Bestbuy, and Squier starter packs competing for the same market? For what? The "Squier by Fender" brand is perfect. Use it correctly.

All the way up to the 1k price point. They have a Squier Mike Dirnt Signature model, and two Fender MIM Signature models. No disrespect to Mike. He's great and his basses are cool. However, How many variations on that do you need? We get 3 Mike Dirnt signatures, but we can't get an American Vintage Single Coil Precision Bass? It's Squier, The Sting or the Custom Shop? Really? Overseas import or 5000 dollars? If you made the imports all Squiers you could do away with the Dirnt plain Poly Sig. Give him the current budget Squier model for the young kids and the Roadworn for his older fans. Same thing with the Sting. There's the cheaper "Classic Vibe" single coil, then you can upgrade to the Sting sig from Japan if you want something with more refinement.

Gibson does this with Epiphone much more effectively. Sure, there's the LP Junior that can be had at just a hair below the 1k mark. However, it's not the flagship model. If you want a Gibson LP you are going to pay, but you will be getting something of quality. If you want a cheaper, budget model that you might want to trade in or upgrade down the line. You can buy an Epiphone. Obviously I don't want Fender to turn into Gibson, but there's something to be said for the fact that the name still carries some weight.

Fender dillutes their name by branding lower end product with it. I get that Leo's vision was quality, affordable mass produced instruments. When he was running the show that's what you got, and that's fine even now if your lower end product is top notch in terms of quality. However, let's be honest. It's not. If everything with the Fender name had the quality level of say the Japanese imports or the Ensenada Roadworn or Classic series then that'd be fine. However, pretty much everything else in terms of import should be branded Squier and then give the product lines some "housekeeping".

That's all I'm saying. Not about debts, or anything else. Those are simply a by-product of a poorly managed business. However, as others have pointed out in other threads. If the people pulling the strings don't really care about having a business with longevity and the product they produce. If this is just "buy low, sell high" and cash out before the bank catches up with you. Then it's all for naught. Because what makes the biggest profit is polishing turds and selling them to suckers. Then hauling your snakeoil wagon out of dodge before they catch on.

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Post subject: Re: I was wondering about that Fender IPO...
Posted: Wed Apr 30, 2014 7:52 am
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brotherdave wrote:
I honestly feel better about Fender's future now than at any point in the past 20 years. You can too.


A big +1 brotherdave, I totally agree.


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Post subject: Re: I was wondering about that Fender IPO...
Posted: Wed Apr 30, 2014 8:17 am
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Why dredge this old thread up?

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Post subject: Re: I was wondering about that Fender IPO...
Posted: Wed Apr 30, 2014 8:28 am
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Miami Mike wrote:
Why dredge this old thread up?


I was looking for the actual IPO paperwork, which I eventually found. It contains some vital intelligence that I needed to gather. :wink:

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Post subject: Re: I was wondering about that Fender IPO...
Posted: Wed Apr 30, 2014 9:58 am
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On where to find donuts?

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Post subject: Re: I was wondering about that Fender IPO...
Posted: Wed Apr 30, 2014 11:36 am
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TheKingofPain wrote:
On where to find donuts?


I want some donuts. Ha ha ha :lol:


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Post subject: Re: I was wondering about that Fender IPO...
Posted: Wed Apr 30, 2014 11:49 am
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Relic G Man wrote:
TheKingofPain wrote:
On where to find donuts?


I want some donuts. Ha ha ha :lol:


Exactly! FMIC To Acquire Krispy Kreme! :shock:

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