The Fall Of Allans + Billy Hydes. What Does It All Mean?

The combination of a rise in online shopping and the poor state of the world's economy has left Australia's retail sector struggling to make a buck. The musical instrument industry is not immune to the conditions and that was made evident when receivers were appointed to the Australian Music Group on Thursday 23 August. AMG encompasses Allans + Billy Hydes retail outlets as well as Musiclink and Intermusic, distributors of such high profile brands as Korg, Ampeg, Line 6, ENGL, Jet City, DW and many others (some of those brands have already gone to other wholesalers). AMG's voluntary administration has ramifications for the whole industry, the wholesalers who have stock sitting in their stores, as well as the people who have lost or will lose their jobs. For many, it's the day job which supports their music making activities at night. On one hand the liquidation of Allans+ Billy Hydes stores provides the chance to pick up a bargain as they sell off gear, on the other hand if you were the holder of a gift voucher with the chain, things aren't so rosy.

However, despite the retail arm of the music industry suffering a major setback, the live music scene remains reasonably bouyant. Gigging and the merch table seem to be the only real way to pay the way for a musician. What this means at the most basic level is that there are many working musicians who still need gear and accessories. They need to get it from somewhere and it's up to those still in the retail game to step up, get clever, promote and attract musicians to their stores or online services. The conditions provide a great opportunity for independent music stores in particular … but they best get out there campaigning aggressively now as there are other retail chains with a whiff of that opportunity too.

The JB Hi Fi chain has been quietly introducing musical instruments to their inventory for a couple of years now, the Harvey Norman chain has more recently joined the hunt for the musician's dollar and Con Gallin's Musician's Pro Shop network is always growing. The time is perfect for those chains to ramp up their activity. “We have hundreds of thousands of transactions per week. If one percent of those bought a musical instrument, it will grow the market significantly,” JB's Nick Kanaris told us earlier in the year. “This is adding another category for the amount of traffic we have coming through. We added computers a few years ago. If you go back to the start of JB, we didn't even have TVs. We have 165 stores nationally, all potentially could have musical instruments in them. Currently we offer keyboards in around 40 stores. That will expand into guitars and other areas. We'll have close to 80 stores with musical instruments soon.”

Harvey Norman, the newest player to the music game introduced instruments and accessories to their stock in January this year via their Big Buys stores. Their Big Buys store idea was originally an online only project. “We're expanding as we go,” said Michael Palamara-Category Manager-Music of the music range. “We've got entry level guitars and ukuleles, electric pianos, print music, music technology, accessories and we'll branch into band gear as we grow.”

Palamara claims that the Billy Hydes factor has not really altered their tactics as they had planned to grow the instrument market anyway. “It just means we may do it in a larger way than originally planned,” he said. “We want to be a serious one stop shop with everything for the beginner through to the intermediate player. We'll cater to the parents buying gear for their kids or the player going from their first guitar to their second.”

Mark Gale, Marketing manager of Perth based retailers Kosmic Sound certainly isn't spruiking the AMG downfall as an opportunity to benefit from. Australia's musical instrument industry is a close knit community and everyone knows somebody suffering from the situation. Rather Gale suggests that the indies should always be on their toes being active irrespective of what the opposition is doing. “Independent stores always have the advantage of being able to manoeuvre relatively quickly under changing market conditions and adjust their business models to suit customer expectations,” he said. “Unfortunately, AMG, given their private equity backing, were primarily profit focused rather than customer focused and consequently their buying and management decisions were poor. As Australia's largest independent music store, Kosmic will continue to focus on providing the right products at great prices and with a level of service that has seen us get to where we are after more than 40 years in business.We are also tightly integrating our online and offline business to provide a seamless customer experience and meet the rapid growth that we are experiencing nationally. We now ship from both the east and west coasts with free delivery over $50 and with the option to pay for express shipping.”

Ron from Ron Leigh's Music Factory in Brighton, Victoria suggests that in tough economic times, independent retailers like himself need to look to their strengths. “Are they good at retailing or repairs or teaching? Establish what your strengths are and focus on that,” he said. Leigh sees his advantage as the great customer relationships he has built through his personable teaching methods.

A recent phenomenon he's not fond of however, is witnessing people coming into the store, taking photos of gear with their iPhones, knowing that they will then take that photo back to their computer and search for the best online price for the product. Spare a thought for the local retailer before you pull that act of rudeness.

For musicians seeking new gear, there's going to be some very competitive deals out there in the next few weeks and leading up to Christmas. Get yourself into a store and check it out. Muso would also like to wish all of the hard working, music loving AMG staff well in finding new employment.