Peter Schmitt of Schmitt Music: ‘To Better Serve the Customer’

Midwest MI retail powerhouse Schmitt Music has undergone some significant changes in recent years. 2021 marked the 12-store chain’s 125^th anniversary and also saw longtime president and CEO Tom Schmitt hand the reigns over to his son Peter, with Tom now serving at executive chairman. 2022 was distinguished by some structural reorganization and new store openings – most recently (and significantly) a brand-new flagship store and HQ in Bloomington, Minnesota that welcomed customers in late October of last year.

We recently sat down with Peter Schmitt to talk about his new role as fifth-generation CEO of this widely respected family business, the new headquarters, and expectations for both Schmitt Music and the MI industry, as a whole, in the coming months.

Nearly everybody loves the idea of family-owned businesses that stay in the family. When did discussions begin regarding you succeeding as CEO of Schmitt Music?

Well, I’ve been working with the company around eight years in total and, dad and I, Tom Schmitt, had multiple conversations over the years about a future transition. We never really set in stone when that would take place. We kind of figured time will tell when it’s right. I would say for six months we were actively discussing how and when the transition would happen. So the time just felt right, I think, for him. And he asked me if July [2021] seemed like a good time for me to step in, and I said, “Yeah, let’s do it.” And then we had made the transition.

Have you, either purposefully or just sort of incidentally, implemented changes to the operational mode of Schmitt Music? Have things changed since your ascension to the role of chief executive officer?

I did restructure the organization, starting with defining roles and responsibilities of the senior leadership team. There was a slightly different structure when my dad was CEO. And then that change in the leadership level also impacted the next level of leaders at the Schmitt Music Company with promoting Jeremiah Babcock to the VP of sales role. He had to step out of the things that he was doing in the past, and we had to elevate people up. And that brought in regional managers. So, we now have a north regional and a south regional manager, Daniel Miller and Jason Ratliff. And then David Strong, who was our former sax shop manager, has now stepped up to manage all things Bloomington. So, we have three individuals that manage the retail operations at Schmitt Music.

Got it. The big news prior to the recent headquarters shift was the summer ’22 opening of the Apple Valley location. What was the catalyst that led to that location’s opening?

The typical: lease expires and that starts the discussion of, “What should we do next?” And that was our old Burnsville store that we had closed down. It was a fairly large store in a shopping center that I think was losing foot traffic. And there was a major, major anchor tenant that was going away, so we were hesitant to sign another five- or 10-year lease there. We also wanted to downsize, frankly. COVID really put a halt to our lesson business. We didn’t know how the lesson program would bounce back and if we would need another 12 teaching studios. So, we found an opportunity in Apple Valley in and the MacPhail Center for Music has their lesson business operating out of that facility, as well. So, we have a small 3,000 square-foot or less retail space and then we thought, “Well that might be an interesting partnership.” And now MacPhail is operating the lesson business, we’re operating on the retail side, and it seems to be going well out of the gate.

That sounds like a nice symbiotic relationship that doesn’t really require a ton of overhead on your part, but still provides that service to your customers.

Yep. And until, you know, we’re kind of back in normal times – and I still think we’re not quite there yet, post-COVID – we won’t fully understand how that may continue to work.

Can you talk a little bit about what had been the previous flagship store and what prompted the decision to enter the new space?

Yeah, so our lease expired of our Edina location, which was in the southwest metro of the Twin Cities – just north of Bloomington actually, very close to where our current facility is here in Bloomington, but that lease expired and we had, I would say a 14,000 to 15,000 square foot store with 27-plus teaching studios. With that amount of space and no students, it was hard for us to sign another extension there. And we thought, let’s go look for a smaller location with fewer studios. And we went out on the hunt and kind of came up empty-handed. There were no great options we found to relocate in the southwest metro. We were looking for 8,000 to 10,000 square feet. So, in that search, I came across this building, the former Lifetouch building in Bloomington that had been vacant for about two years. I had this wild thought of, “Why don’t we combine our then-flagship MI store in Brooklyn Center and what was, or was at the time, our flagship keyboard store in Edina into one and have a flagship Schmitt Music location?”

That gave us the opportunity to take what we’ve learned in the MI business and the keyboard business over the past X number of years and design one facility that supported our growing business. Our facility in Brooklyn Center was around 50,000 square feet in total, and the facility we’ve moved into now is just over 90,000 square feet.

Wow. So how many employees are on hand, both full and part-time?

Over 100.

Are there any teachers are on staff at that location?

We don’t have teachers on staff. Teachers are independent contractors. We do have eight teaching studios in Bloomington.

Got it. And do you have repair and/or a rental on-site?

We do, yeah. We have a band instrument repair shop and a luthier team. I think we have around nine band instrument repair techs and we have seven luthiers.

This is quite the staff.

Yeah. We have a big staff on repair. Our main retail store footprint is around 20,000 square feet and it’s divided up into the store-within-a-store model. So, within our flute gallery, we have a space within the flute gallery for Katie Lowry, who is our master-flute technician. In the saxophone shop we have a space for Randy Jones and the folks at Tenor Madness. And then in the violin shop, Peter Bingen, our head luthier works out of there. And then behind all of those retail shops is our larger production shop.

Is there anything else specific to the new location that makes it unique, that makes it a different arrangement other than what you’ve already covered, which is already substantial?

One of the things I love about the building is we have a 14-foot ceiling, so we’re able to air condition our entire warehouse facility, which helps with the humidity extremes. So, I think our pianos and string instruments and wood clarinets are all going to be much happier this summer. Also, our educational reps have a place to pull their vehicles into our facility, which is an added benefit in contrast to our Brooklyn Center facility. Now they can load and unload outside of the elements.

Aside from feeling the MI industry is not 100 percent back post-COVID, do you have any other observations on the past calendar year? And what are your expectations specifically for MI in 2023?

I’m optimistic about the coming calendar year. You know, we had supply chain challenges this past year and the year prior, and the year prior, maybe if I’m counting on one hand. But, you know, in speaking with our key suppliers, they feel that we’re maybe are not going go through that again because they’re getting on top of manufacturing. We had shortages this fall in our back-to-school season, and we were turning customers away based on availability. So, I think the business is there, back to 2019 levels, it’s just now a matter of getting the product when we need it. It’s such a short window. Those kids are needing their instruments.

Also piano – we’re not seeing piano sales lighten up at all right now. The acoustic and digital keyboard market is still pretty strong for us. It’s more normalized now, it’s stabilized. I don’t think we’re looking at the peak of COVID as the new normal, you know. That was flipping the radar. But things have normalized and sales are back to pre-2019 levels and we’re glad it’s back to those levels.

Excellent. Is there anything else either pertaining to the recent store openings, or other big plans for the coming months?

Oh, yeah. We were mindful of, as we built out the offices and the retail and the warehouses… It was really about having an employees-first approach, making spaces that would encourage staff to come in and work in our facility, be a place they want to be, spaces to collaborate, spaces to gain a sense of community.

We’ve also identified what we’ve referred to as our experts, kind of how we have gained expertise in our shops. The clarinet gallery, the flute gallery, the brass shop has a combination of high-brass and low-brass saxophones and violins. And each one of those shops has an individual who’s responsible not only for the inventory, but making sure that we have the products and the service to fit the needs of the varying consumer types that would be entering Schmitt Music in Bloomington. So, whether it’s the beginner or the intermediate or the professional musician, we have that resource to better serve the customer.