MI Pro

In a previous incarnation of this magazine a certain Secret Shopper  caused no little controversy travelling around the country and springing himself unannounced and anonymously upon unsuspecting MI stores with a view to seeing how well the shops were doing their job. Some loved the column, others hated it, but if there was one question that was uttered most in the same breath as the Secret Shopper, it was, ‘Why can’t you do the same to suppliers?’

Good question. The problem with getting inside the workings of a supplier is that you need a trade reference, an account – you can’t just walk in off the street and find out what is happening. And the bigger the business, the more inscrutable they seem to be.

So when news dripped out that Gibson was going to take back the entire of its European distribution to a central, Netherlands-based operation, the sources available for information did not only dry up, they disappeared altogether.

Fortunately, clues have been left along the way as to why Gibson was cutting off its distributor partners from times when the corporate was only too happy to announce new strategies to the world.

Back in 2002, Gibson’s CEO, Henry Juszkiewicz produced a plan for his European distributors to create four or five joint-venture operations to cover the entire territory. While this must have been very appealing to some, there were words of dissent from others and the plan was modified until, in 2003 at the Musikmesse, Gibson announced Gibson Europe (based in Vianen, in The Netherlands) and the first joint venture, Gibson Med, forged with Monzino MI in Milan, to handle Gibson sales in the Mediterranean area, including Italy, France, Spain, Portugal, Greece, Malta and Turkey.

Distribution in other territories in northern and western Europe and Scandinavia remained unchanged.

Henry Juszkiewicz’s official comment at the time was an interesting one. “With a single, centralised distribution centre, we can now bring the entire Gibson family of instruments to all authorized dealers for the first time ever. And through our European sales partners, our connection with the musicians who play our instruments will be stronger than ever. For everyone – the musicians, the dealers and Gibson." Notice the missing word there?

Those companies that had had misgivings about Gibson’s motives for the joint ventures probably felt justified when, within two years of the establishment, Gibson bought out Monzino’s half of the joint venture. Again, Juszkiewicz’s comment was revealing – even though the word ‘distributor’ had returned. “Our new role in the operation of Gibson Med will give dealers a more direct contact with our European headquarters in Vianen. This will allow us more direct contact with distributors and increased efficiency.” So from solely third party distribution in 2002 to direct supply to seven important European markets.

The pattern is not dissimilar to the path taken by Gibson’s nemesis, Fender, as its predominantly marketing and artist liaison office began to scoop up more and more of the European territories. And there is nothing wrong in this. Any large company dealing with the squeezed margins brought about by the rush to offshore manufacturing and the cash cows of iconic models will always find cutting out the middle man a tempting proposition.

One Gibson insider told MI Pro that the plan had actually been to commence pan-European sales from 2007, but the Vianen facility was not ready on time, thus incumbent distributors had been asked to continue for the time being. If this is true, it is a fine illustration of Gibson’s power in the trade that all of the suppliers seem to have complied.

Scandinavia’s distributor, Luthman of Stockholm, told MI Pro that it had just returned from Nashville, where a new agreement had been signed for the company to continue supplying Gibson to Norway, Denmark, Finland and Sweden for the foreseeable future.

“Scandinavia has four countries, four languages, four currencies and one country outside the EU,” says Per Olsen of Luthman. “I have no idea what will happen in the distant future – I think it will depend on how things go with this latest move on the mainland, but Scandinavia is a far more complex proposition.”

Gibson does need to be careful – and postponing the handover (if that is what has happened) would be an indication of exactly that. Pearl, Yamaha and Fender have all fallen foul of logistics in supplying an entire continent from a single base – but then again, they have all pulled through and seem to be enjoying the fruits of their newfound independence.

For Rosetti it is undoubtedly the end of an era. When Arbiter lost Fender as a line, the US guitar brand amounted to an estimated 80 per cent of the company’s turnover. Should Rosetti’s figure be anywhere near similar, it will be one hell of a blow, but to suggest that the company will crumble is a non-sequeter. With brands such as BC Rich, Rickenbacker and Vandoren on its books, the Essex distributor has an awful lot to fall back on.