|Title:||Global top 10 chain music stores by revenue, number of employees, and number of locations in dollars and units for 2011|
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The World's Top Ten M.I. Retailers
Revenues Employees Locations
X Guitar USA $X,XXX,XXX,XXX X,XXX XXX Center X Musikhaus Germany $XXX,XXX,XXX XXX X Thomann X Sam Ash USA $XXX,XXX,XXX X,XXX XX Music X Shimamura Japan $XXX,XXX,XXX XXXX XXX Music Co., Ltd. X Shinseido Japan $XXX,XXX,XXX XXX XX Co., Ltd. X Long & Canada $XXX,XXX,XXX XXXX XX McQuade, Ltd. X Yamano . $XXX,XXX,XXX XXX XX Music Japan Company, Ltd X Sweetwater USA $XXX,XXX,XXX XXX X Sound X American USA $XXX,XXX,XXX XXX X Musical Supply XX Parsons Hong $XXX,XXX,XXX XXXX XX Music Kong Limited Total: $X,XXX,XXX,XXX XX,XXX XXX
AXX retailers essentially do the same thing: They buy products and hold them in inventory for resale to customers. But, as with cuisine, each nation approaches the task with its own distinctive style. In the following first-ever report, we present a glimpse at how m.i. retailing is conducted in different countries around the globe. The sales rankings in the following pages include XXX of the industry's top retailers operating in XX different countries. For the most recent fiscal year, the group racked up revenues of $X.X billion, accounting for a little over a third of the global market for music products. Total employment of the group was over XX,XXX. At the top of the ranking is Thomann Music, the German-based online retailer with sales of $XXX million. At the bottom is Tien's Violin of Vietnam, with sales of $X.X million. In between is a broad range of businesses with structures and product offerings that reflect the needs of local markets.
Some of the regional differences are easy to discern. China is the world's largest acoustic piano market by a wide margin, and not surprisingly, the retailers there are more piano-focused than anywhere else. The European affinity for techno and other loop-based music styles is reflected in local retailers' emphasis on DJ gear and related software products. In Spain, the birthplace of the classical guitar, nylon-stringed instruments tend to dominate guitar walls. The accordion gets a place of prominence in Mexican stores, as do hand percussion instruments in Brazilian stores.
In mature markets like the U.K. and Germany, there is a clear distinction between retailers and distributors. Not so in emerging markets like Israel and Russia, where the top distributors also operate their own chains of retail stores. The leading player in Australia also wears two hats, serving as both distributor and retailer. As a fairly accurate rule of thumb, the larger the market, the more specialized the retail stores. Yupangco Music in the Philippines stocks everything, from grand pianos to concert sound systems. By contrast, in Germany there are specialty wind instrument retailers, piano stores, and guitar stores.
Less apparent but equally significant are the financial underpinnings of the retail networks. In the U.S., where there is a well-developed financial system, most inventory financing and consumer credit is provided by outside lenders. In China, South America, and parts of Eastern Europe, however, much of the inventory financing is provided by distributors, and retailers are still in the business of providing consumer credit.
For all the outward differences, the shared objective of moving inventory into the hands of consumers with as little friction as possible has led retailers to adopt many of the same business practices. In fact, on closer analysis, the similarities between the world's retailers outweigh the differences. Chalk it up to globalization, which has homogenized commercial practices everywhere. Just as rock 'n' roll and hip hop have found adherents in every corner of the globe, retail styles have converged on a few similar formats. The "big box" model defined by Guitar Center stores has been embraced worldwide. Whether in Brazil, Spain, Japan, or Russia, contemporary stores are organized into departments, with products out in the open for customers to try. Anywhere in the world, the first thing a consumer is likely to see upon entering an m.i. store is the guitar wall. Artist posters are prevalent everywhere, and even the salespeople tend to look the same: under-XX musicians in need of a day job.
When it comes to luring customers into the store, from one end of the world to the other retailers uniformly boast of their broad selection and competitive prices, which also speaks to the broad-based consumer affinity for bargains. As to the selection, whether it's North America, South America, Europe, or Asia, the same brand names take center stage. Yamaha, Fender, Gibson, Roland, JBL, Buffet, and Steinway are among the trademarks that mean something in every language. Pricing is difficult to compare from country to country, given the prevalence of value added taxes. In the European Union, for example, VAT can add between XX% and XX% to the retail selling price. However, every retailer interviewed complains of working on razor-thin margins, which suggests that in every country, retailing remains a gritty, low-profit business.
The United Nations ranks Finland as the nation with the world's highest broadband penetration and North Korea with the lowest. In between, internet access varies considerably. Nevertheless, every retailer on the global rankings maintains a highly professional website with inventory and events listings, store pictures, and a host of other information. Obviously, the consensus is that an internet presence is as essential as a sign over the front door. Although it's difficult to pinpoint with total precision, an estimated XX% of the retailers on the list actively sell products on their websites. The notable exception are acoustic piano dealers in China. An international review of websites also reveals that retailers everywhere have settled on similar promotional strategies, including a mix of in-store clinics, periodic inventory clearance sales, and "battles of the bands."
The same competitive tension that exists between online and brick-and-mortar retailers in the U.S. is also playing out in much of the rest of the world. Take Europe as one example. Thomann Music may be based in a small German village, but given its reach, is viewed as an arch competitor by retailers in virtually every country on the continent. To a slightly lesser extent, online retailers Woodbrass in France and Digital Village in the U.K. also roil markets across the continent with the combination of competitive pricing and extensive inventory. At the recent Frankfurt Fair, retailers and distributors alike spent much of their time discussing how to develop new strategies for competing in an internet age.
It's accepted everywhere that the availability of music education is vital for the sale of musical instruments. How the service is delivered varies from market to market. In much of Asia, where western music styles were only introduced in the XXth century, it fell to retailers to develop an educational infrastructure. That's why at most stores in Japan, China, and Hong Kong, teaching operations are viewed as a vital profit center and are aggressively promoted. In English-speaking countries like Canada and Australia, where there existed some music education institutions, in-store teaching evolved less as a profit center and more as a public service and an effective way to drive store traffic. In these markets many stores include teaching studios, but they are not considered absolutely essential. In Continental Europe, where music conservatories date back several centuries, there has been a clear divide between the activities of teaching and selling, and relatively few in-store lesson programs are offered.
Perhaps the greatest similarity that binds the world's top m.i. retailers is the type of people who run them. In the XXX years that Music Trades has been publishing, the retail side of the industry has been a magnet for entrepreneurs who combine a love of music with some business smarts and a healthy dose of ambition. Those same traits can be found in the managerial ranks of every business in the following roster.
The retailers ranked in the following pages represent most, but not all, of the top retailers operating outside of the United States. The list was somewhat limited by a lack of credible sales data in some locales. For example, although Italy ranks as the third-largest market in Europe. the list includes no Italian-based retailers because of a lack of data. A leading Italian distributor suggested that because of the country's punitive tax laws and rigid labor regulations. "no one will tell you anything about their business." As the data in the following pages illustrates, however, distributors and retailers in other parts of the world were far more forthcoming.
For the purposes of comparison, revenue estimates have been converted into U.S. dollars at a January X, 2012 exchange rate. The revenue estimates are for the 2011 calendar year, or the most recent fiscal year.
Financial accounting, the process of distilling human activity down to a set of numbers, is useful for the purpose of measuring efficiencies and comparing businesses. However, it never tells the whole story of an enterprise. Left out is the passion, and the human element. The ranking on the following pages paints a useful numeric portrait of the world's top retailers. It is also offered up as a salute to an exceptional group of individuals who have dedicated themselves to making music available on a broad basis. What the numbers don't capture is their outsized contribution to the quality of human life worldwide.
Global M.l. Retail At A Glance
Number of Retailers: XXX
Number of Countries XX
Total Sales Volume $X.X
Billion Number Of Store Fronts X,XXX
Number Of Employees XX,XXX
Average Sales Per Employee $XXX,XXX
Average Sales Per Location $X,XXX,XXX
RELATED ARTICLE: Retailing In Italy
Although Italian retailers and distributors were not forthcoming with data on sales, employees, and locations, there was general consensus about who the top players were. Below, a list of the leading m.i. retailers in Italy.
Centro Chitarre S.R.L.