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Market Profile: MI Thriving in ‘Space City’

by Victoria Wasylak • in
  • Features
  • Issue Articles
  • July 2018
• Created: July 26, 2018

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They say everything is bigger in Texas – but are the MI profit margins bigger, too? Houston, the fourth largest city in the United States, spans 627 square miles and is one of Texas’ most populous cities. Coupled with the state’s musical notoriety, Houston’s makeup translates into a lucrative place to have an MI business – on paper, at least.

But just how big are the pickins’ in the famous Lone Star state city? For many MI suppliers and retailers, the size of the city has its pros and cons. A great spot for any enterprise in general, the area is business-friendly and boasts a strong economy, according to the MI industry representatives surveyed here. But for many, Houston’s notable size has its downsides – some stores can be glossed over or lost in the mix amongst so many other business, or go totally overlooked by people who are unaware they have independent local options for their MI needs. Sam Ash is tucked among five nearby Guitar Centers, while Rockin’ Robin Guitars says that despite being multiple decades old, locals come in all the time saying they didn’t knew the store existed.

For other issues pertaining to the area, look no further than the wrath of Hurricane Harvey, which ripped through Texas and Louisiana last year. But Houstonians are tough and have thick skin that’s weathered many a similar storm.

“Even though it’s the third or fourth largest city in America, it’s a real community of musicians and people who enjoy listening to music and supporting music,” says Liz Wittrock of Rockin’ Robin Guitars. “After [Hurricane] Harvey, I think we got to see firsthand exactly how strong Houstonians are with each other, coming together and supporting each other.” Read on to learn more about the MI market in the Houston, Texas area.

Promark

The oldest of the bunch, Promark Percussion was founded in Houston by Herb Brochstein in 1957. The company was purchased by D’Addario in 2011, but the company’s offices and factory proudly remain in Houston, where they make drumsticks, mallets, and brushes, among other percussion accessories.

“Houston has a vibrant music and we are proud to be part of the community,” says plant manager Jason Talas. “Operating in Houston gives us ample access to a variety of resources, excellent logistic solutions, and offer great venues for touring artists.”

In contrast, Talas notes that with the Houston plant cannot take advantage of the same recycling opportunities that their Tennessee plant can as a result of the industries local to the area.

“On the other side of that, Houston is primarily made up of oil and gas/energy industries, and as a wood processing plant, we are unable to capitalize on some opportunities in terms of recycling that we are able to at our plant in Tennessee,” he says.

 

Sam Ash

Sam Ash, albeit new to the Houston area, has already taken in a fair amount of the Texas market culture. The new location has only been in business for 12 months, but thus far the shop has been reaping the benefits of being in Houston, despite having some competition.

“We are the new kids on the block but it seems very healthy,” says Sammy Ash, grandson of the chain’s founder. “We get a lot of bands coming in for full outfitting. We have a lot of action at the musician message board and business has been great!”

And while Ash remains still green-ish with regards to the area, he’s noticed a few trends amongst his customers, one of which is that the people live up to the notion of Southern hospitality.

“I took about 10 different trips checking out the store and then designing and outfitting it, and every trip was wonderful,” he notes. “The people of Houston were and are very hospitable. It shows in my staff and our customers.”

Ash says that the majority of his clientele are families, and while there are professionals and hobbyists who enjoy shopping there as well, the number of parents with children that come in has wowed him.

“The amount of whole families that shop with us is incredible. It creates a great vibe in the store. Saturdays are incredible!“ he notes. “I’m too much of a New Yorker to say proof positive of what is typical for Houston, but it seems to be very similar to our other stores but with a larger slant towards Latin instruments like the Bajo Sexto and Tres – and an inordinate amount of accordions. I didn’t know this market catered to expensive squeeze boxes but we have them in stock up to $6,000 and they are selling! Everything else is in similar proportions to the rest of the chain.”

What is looming near the store, however, are five Guitar Center locations, which Ash says poses a bit of a challenge.

“Our little 10,000 sq. ft. store has a lot of competition. Fullers is right down the road, but we are doing something right,” Ash notes. “The sales numbers for guitars for example has propelled this store past four already existing stores in our chain. That’s saying something for only 12 months of business.”

Overall, though, he feels that Houston has been a great home, and hopes to open at least one more store, although he’s not sure of the whereabouts yet.

“Our expectations are at least another location. Houston (and Texas) has been very good to us,” he says. “Right now we are looking into something in a different state but I’ll be returning.”

 

Allparts

Allparts has solid roots in Houston, being founded in 1982 and staying in the area for 35 years. President Steve Wark says that the locale of the Texas city has been a major component in

their steady growth, citing the diversity of the area and the ease of operating a company there as boosters for business.

“Houston’s central location, cultural diversity, and huge port helped us grow like the hair on an ‘80’s metal band and gives us an economical gateway to ship to our distributors and shops all over the world,” Wark says. “It helps that Texas is very business-friendly, enabling us to keep costs down and with a large workforce of talented people, Houston has been the ideal place for Allparts to call home.”

Wark also notes that the music scene helps to draw and keep musicians to the area, including his own employees. While Texas may be often lumped in with country and western music, Wark says that genres like punk and jazz also thrive in the area.

“It should be no surprise to know that as the home of Allparts, Houston also has a vibrant music scene with a huge variety of venues for local and visiting musicians to play–the city’s diversity is

reflected in the wide range of music you can hear any day of the year,” Wark adds. “From punk and indie rock to blues and jazz, intimate local stages to Texas-sized arenas, Houston has something for everyone and is continuing to grow every day–you can even find several of our talented staff out playing every weekend.”

For Wark, however, the main downside to operating in Houston appears to be the chaotic weather that Texas tends to experience.

Hurricanes in particular pose an enormous threat to offices and warehouses, and Wark notes that Allparts didn’t go unaffected by Hurricane Harvey in 2017.

“The main challenge here is the weather. Houston has, on occasion, been in the path of hurricanes and floods–the most devastating for the city being the recent historic flooding caused by Harvey,” he explains. “Supply and distribution lines were the most affected–roads, airports, and ports all closed down or flooded– while the unprecedented rising waters also threatened the warehouse and offices. With good planning, a little luck, and the hard

work of our dedicated staff, Allparts managed to come through mostly unscathed and continued operating through the challenges with minimum interruption. Perhaps nothing sums up the Texan spirit and grit better than the way the entire community pulled together to help those most affected by the flooding. We couldn’t be more proud to call ourselves Texans.”

 

Rockin’ Robin Guitars

Liz Wittrock, manager of Rockin’ Robin Guitars, stands in agreement with Wark over the major bonus that the Houston music scene offers to local MI businesses. The shop, which has been in

operation since 1972, has offered guitars, lessons, and repairs for more than four decades. She notes that Austin frequently gets much of the national spotlight – most likely from music festivals like Austin City Limits and South By Southwest – but Houston has its own scene to boast.

“I think that Houston has a very vibrant music scene. I think it has a diverse music scene, which might surprise people, assuming there would only be blues – which there is quite a bit of, for sure, but there’s good diversity,” she says. “There’s a good indie scene, there’s a good rock scene, and there’s a lot of venues. Musicians are able to play almost every night of the week if they’d like to, and people enjoy hearing live music in this town. I think Houston gets overshadowed by Austin a lot, but we have our own vibrant music scene going.”

In the store, she says that there is no “average” customer with regards to age and experience level.

“I think that’s one of my favorite parts of working here is that it is the full gamut – six year olds that can play better than I can and 80 year olds that have never picked up a guitar before in their life but have some time and want to learn, and everything in between,” Wittrock adds. “We love to see all of that.”

The challenges for her store, at least, come from the fact that Houston is almost too big. Wittrock notes that frequently, new customers who come to the store often didn’t previously know that Rockin’ Robin existed because they typically rely on chain stores, not realizing the options they have for independent businesses.

“I think the geography of Houston being so massive – you can drive for an hour and a half and still be in Houston,” she explains.

“It’s geographically massive. We have this space, so its kind of sprawling, so we might have someone call in and say, ‘Hey I want to make sure your guitar tech is in because it’s a 45 minute to an hour and a half drive.’ I think that can be a challenge. And I think the same challenges that every store is facing big box stores and people not realizing that they have a better option of an independent store. We’ve been here since 1972 and every day someone comes in [saying] ‘Oh, I didn’t even know this place was here, this is amazing, I’m so glad I don’t have to go to a box store anymore,’ so that’s really cool to see too. If you lookout how large Houston is, space-wise, it’s kind of staggering.”

She takes the size in stride though, and feels that the size is what helps to forge the amount of diversity in the city – musical and otherwise.

“Again, it’s a great diverse town with such a great community, even though it’s the third or fourth largest city in America, it’s a real community of musicians and people who enjoy listening to music and supporting music,” she concludes. “After [Hurricane] Harvey, I think we got to see firsthand exactly how strong Houstonians are with each other, coming together and supporting each other.”

 

Fort Bend Music Center

Rick Cochran, president of Fort Bend Music Center, says that the scene is going strong, especially with regards to the desire to learn how to play new music. His store’s school in particular, established over a decade ago, has swelled with students since it opened.

“We have a school that we started in 2004, and we’re currently around 700 students, so I would say it is very strong as is the interest in learning music,” he notes.

Similarly, his clientele leans towards families, which goes hand in hand with the offerings from the store’s school.

“I’m not just a piano store, I’ve got the band instruments, guitars, so when you say average, it’s younger families, 35-45 age range, with the kids,” he says.

“It’s fun – with that many kids coming into the store, it’s really a joy to see them progress. It’s not like we’re selling them instruments and never seeing our customers again. We’re generally seeing them every week and watching them grow up, and then each time we get together for recitals, we get to see their progression and learning.”

Cochran also adds that the diversity and sizeable teachers association in the area are the major pluses for Fort Bend Music City.

“Specific to Houston – we have a very large Asian population in Houston, so in general, so it’s a good market to be in for the MI business because of the diversity. I think we have one of the largest teacher associations in the country, also, so it is a very vibrant music learning community,” Cochran explains.

While he notes that rent is not an issue, except for the high-end districts, he feels that the biggest concern he and the store are facing isn’t specific to Houston.

“Rent is not an issue in Houston, unless you go into high-end districts, but there are very reasonable rent rates here,” Cochran noes. “I think, to put it honestly, the biggest challenge is dealing with the internet sales for a brick and mortar store, it truly is. It puts brick and mortar at a disadvantage when you can order something [online] and not pay sales tax on it. So, I guess that’s probably true for the whole country, but that’s my biggest challenge right now, is dealing with the internet sales.”

 

Texas Music Emporium

Since opening in November 1982, The Texas Music Emporium has moved twice and is currently on its third location, where it has been for 22 years.

While owner Jim Rod notes that the store’s clientele varies greatly, he likens the store to a boutique guitar shop.

“Our present location of 22 years is across the freeway from the northside Guitar Center,” he says. “Our customer base is very broad simply because we do incredible guitar lessons and professional guitar repair – so it really varies from eight years old to 70 years old. Because

of our professional staff we get a lot of professional players in the store.”

According to Rod, “Houston’s music scene is stronger than ever – lots of general club gigs, large venues and it seems like hundreds of open mic nights.”

Rod also notes that Houston’s economy seems to be stronger that other areas, although it’s not susceptible to the other issues that the entire MI industry is dealing with right now, such as a decreased amount of expendable income amongst many American families.

“A huge benefit of operating in Houston, Texas is our very strong diverse economy. I have friends in other cities and states that seem to struggle because of their economy,” he notes.

“On the flipside of the coin, a challenge in any music store would be music is just not a necessity. Most people, not all, pay their bills first then buy their musical gear or dream guitar. It’s all about creative advertising.”

 

Rio Grande Pickups and Alamo Music Products

Dave Wintz represents both Rio Grande Pickups (founded in 1994) and Alamo Music Products (founded around 2000), each MI suppliers located in Texas.

While each company certainly serves Houston, Wintz says that their market extends far beyond the Texas city. Still, he’s been living there since he was 20 years old, and he feels that times are a bit tougher than they were when he first arrived on the scene.

“Our market’s not Houston. Houston is just part of our market. [The music scene here is] a little soft – and I think that’s not just in Houston, that’s all over the country,” he explains.

“I talked to a lot of retailers, and I always hear that. There’s always some stores and some manufacturers and distributers that do well, but I think a lot of the independent shops are having a tough go of it. I’ve looked around Houston, which is a big metropolitan area, I’ve been in the business here since I was 20 years old, and I just look at the different stores and I just think that they’re having to work harder for less than it used to be.”

In comparison to the rest of the country, however, Wintz believes that Houston still has somewhat of a business advantage.

“[When] certain parts of the country are doing bad, Houston tends to do better,” he says, noting the warmer climate and oil industry.

With Houston being only a fraction of the two businesses’ market, Wintz says that as a whole, the biggest downside to their operation right now is the Internet. As a manufacturer, Wintz says that many people online have encroached on their territory as “assemblers” – people who buy almost-made pickups and assemble a couple of foreign-made parts for profit. The new method poses a new way of “manufacturing” – one that actually involves very little manufacturing at all, but puts these companies on par with Rio Grande Pickups, as far as many customers can tell from online.

“The Internet is a double-edged sword. There are a lot of people who have created pickup companies with a laptop in their bedroom or closet, and you can make your website look as professional as you have the skills to do so, but you may not even have a company,” he explains. “But you’re buying pickup components from China that they use on Chinese instruments, and they you make up a cute name for your product – and you’re a pickup company – or at least you appear to be a pickup company. But you’re not manufacturing all your components, and you’re basically an assembler. There’s a lot of people who do that in the guitar business too; they buy bodies, neck, and assemble them. There’s nothing wrong with

that, it’s just a different way to do it. But it’s not the old model of manufacturing from raw material to finished product. What they’re doing is taking almost finished product, finishing it up, and putting their name on it. The barriers for entry have been removed because of the Internet. I like the Internet, but you’ve got to take the bitter with the sweet.”

 

Guitar Center

With eight metro-area locations in Houston, perhaps no one witnesses Houston’s diversity more often than Guitar Center. District manager Ryan Salinas says that the city’s long history of producing top-tier acts and promotion of events in the downtown area have spurred on the want and need for more venues in town – which is good news for musicians all around.

“For decades, Houston has put its stamp on the national and international music stage. The diversity and unique culture allow Houston’s music scene to not be stuck in one genre or another, and that diversity also is represented through our homegrown artists ranging from Beyoncé to ZZ Top and beyond,” he explains. “The city of Houston has also been large in promoting music at events on the large downtown space called Discovery Green. These events include national acts and showcase local school bands, jazz ensembles, choirs, and more. The city of Houston is the fourth largest city in the U.S. and has a strong network of band and orchestra programs in its schools. Houston’s demand for live music has brought a new wave of venues coming soon and some just now gaining traction such as White Oak Music Hall and

The Secret Group. There are venues and events for the budding artists and bands all the way to the international superstar acts.”

When it comes to clientele, Salinas echoes that the diversity of the city means there is no one type of shopper, but he does note two special kinds of customers: pros and houses of worship.

“Many of our customers are passionate players, but we also have a large concentration of professional and accomplished musicians, as well as a considerable number of executives from the oil and gas industry, who shop with us for higher-end gear,” he explains. “Additionally, Guitar Center is proud to serve the city’s numerous houses of worship, from stadium-sized churches to mobile bible study classes. The praise-and-worship music scene is strong in the Houston area and growing. “

However, even for a store as massive as Guitar Center, the city’s incredible size can present a challenge.

“Customers in Houston travel throughout the city primarily by car and are not likely to stay in one area of town when needing to shop,” he says. “This allows for a retailer to have a large ‘reach;’ however it also can mean that competition can be strong, even if it is a competing business clear across the city.”

On top of that, Salinas cites factors from other markets as what makes Houston a bit of a tricky market to navigate.

“Macro-economic factors can sometimes create stresses within the retail market. For example, the fluctuation of the petro/oil and gas industry has an acute effect on the local economy,” he explains. “Being on the Gulf Coast, we are subject to tropical storms and hurricanes and their associated flooding; however this area of the country has managed to withstand those events and pick itself back up time and time again.”

The company also hires a fair number of bilingual associates to help accommodate for customers whose first language is not English.

“The diversity in Houston also requires that retailers cater to the many languages spoken in Houston. Our  associates that are bilingual are a huge benefit to our organization,” Salinas says.

“Houston’s population and diversity make this a fertile ground for MI retail industry. The density of population and how any given zip code can host a wide demographic and economic range allow retailers to serve a large market of musicians in a small geographic area.”

Looking forward, the Houston Guitar Center stores plan to develop and grow their music education programs, as well as continue to help the musicians who are still feeling the sting of last year’s Hurricane Harvey.

“Guitar Center is just getting started in our pursuit of being the world’s largest provider of music education,” Salinas says.

“We expect to see a fast-growing music education population in the Houston area as our lessons programs in our retail locations flourish and host more students of all ages and skill levels.”

“Guitar Center remains committed to the Houston music community and most recently teamed up with MusicCares to help working musicians impacted by Hurricane Harvey rebuild their lives,” he continues.

“In addition to working with MusiCares, Guitar Center continues to work with the local communities to assure musicians and music professionals have support for reduced cost repairs and replacement for damaged equipment as well as support music education programs in the area for needs they may have from the devastation of Hurricane Harvey. Guitar Center also recently partnered with a local Houston news station (KPRC-TV) to provide instruments for a family with six special-needs children who lost all their instruments that were used for music therapy.”

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