In light of the recent collapse of Australia’s largest chain of music retailers, Allans Billy Hyde’s, which saw hundreds losing their jobs after it entered receivership amidst debts of nearly $40 million, you would think that the state of the music retail industry would be particularly dire.
Particularly given that the company’s receivership came only two years after the two businesses combined forces in July 2010 to face down financial struggles to begin with. Eventually falling into a financial position so bad that they would not honour any pre-purchased gift vouchers, while deposits were not able to be refunded during the receivership fallout.
The owners of music retailers Gallin’s Musician’s Pros Shop however, have a very different view of the loss of the music retail chain, with the company’s Managing Director of Australian Musical Imports (AMI), Con Gallin, saying that the industry is doing just fine.
In a press statement circulate to media yesterday, Gallin says that the collapse of Allans Music & Billy Hyde Group was a result of poor business decisions by its management, combined with a major downturn in sales.
“Allans Billy Hyde’s represented many of the world’s No 1 brands that had enormous consumer demand yet with a massive turnover of $120 million per year they couldn’t make a buck,” says Gallin.
Speaking of the chain’s owners and management, Australian Music Group, Gallin said they “lacked music retail expertise and as a result lost large amounts of money. They couldn’t adjust the company expenses to meet reality and they are not inspiring entrepreneurs. This is the game of Monopoly out of control and the economy is not to blame.”
As a result of Allans Billy Hyde’s falling over, Gallin’s and AMI is now looking to take over as the number one music retailer in Australia, responsible for supplying a high number of ‘name’ brands and instruments to customers, suppliers, and – of course – musicians. Including iconic guitar makers, Gibson. The axe of choice for the likes of Slash, Angus Young, and Jimmy Page, the sales of Gibson guitars have spiked in Australia in recent years according to Gallin’s, regardless of the economical terrain.
Allans Billy Hyde, left many musicians and consumers’ heads spinning when they closed their doors nationwide, with many predicting mass job losses, and many turning to online and overseas retailers for their music purchases, but Gallin assures it was an isolated incident. “We have good news, we are doing very well and so are others.”
In the face of their impending doom, Allans Billy Hyde also sought new owners to rescue the business, including Bain Capital; the private equity firm founded by US Republican presidential candidate Mitt Romney, who reportedly circled the buy-out at the eleventh hour.
Interestingly, Gallin also confirms that Gallin’s and AMI “had tabled a number of genuine and competitive offers to the receiver, Ferrier Hodgson, in an attempt to not only keep the Allans Music & Billy Hyde stores open but to maintain its dedicated staff. Those offers were rejected outright.”
Gallin adds that he was “disappointed,” stating: Our offer for AMG was a very attractive one” Gallin said, even offering to honour angry customers’ refused gift vouchers.
Instead he has turned his focus to his own business, with AMI recently being granted bank approval for a major expansion of Gallin’s, including additional stores and increased staff.
“Gallin’s and AMI are performing well because its staff and management understand that it’s all about the music and musicians – beginners or professionals” he added, pointing to how high-profile musicians like Noel Gallagher and Men At Work’s Colin Hay had sought Gallin’s services at their Chapel Street store.
“We are in the business of serving people’s love for making music, that’s the key,” said Gallin. “Music is a passion and like art and literature, it somehow inspires us and working in the retail side of music has a similar effect. If you don’t get that, then you will not be in tune with your customers. You certainly won’t be able to run a $100M business.”