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Fender closes Hamer. Are more to follow?

Ronnie Dungan
Fender closes Hamer. Are more to follow?

Fender has decided to end manufacture of the Hamer guitar brand and has indicated it may not be the last of the brands owned by the firm to vanish.

Although never a mainstream brand, Hamer was formed in 1976 by Paul Hamer, Jol Dantzig and John Montgomery and is widely credited as being the pioneer of boutique guitar brands. Highly regarded by professional musicians it boasted a plethora of big names among its users including The Police, The Pretenders, Dire Straits and a host of others.

In 1988 it was bought by US distribution giant Kaman which was snapped up by Fender in 2007 for $117m giving the guitar manufacturer distribution of Hamer and other brands such as Ovation, Takamine and amp brand, Genz Benz.

A spokesman for Fender told MI Pro it was: “Transitioning Hamer to focus on more profitable lines. At this point in time it just makes sense. Sales have been declining for a long period of time.”
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Job losses are apparently unlikely as Hamer was serviced by a small team operating at the same Connecticut factory that also makes Guild and Fender Custom acoustics.

The question it does raise, however, is what fate awaits some of the other brands under the Fender ownership? The firm’s spokesman did seem to indicate that Hamer would not be the last name to disappear.

“It’s too soon to tell but,” he said, “but I imagine, based on our 65-year history, that it would be the case, yes.”

The firm’s last minute postponement of its flotation in July of this year was blamed on the fragile state of the European economy, although many analysts have pointed to the firm’s valuation at $396m as the root cause of investor apathy.

“Current market conditions and concerns about economic conditions in Europe do not support completing an initial public offering at what we believe to be an appropriate valuation at this time," Larry Thomas, Fender's chief executive, said in a statement.

Some $90m of the $150m raised from the flotation was earmarked in its SEC filing to pay down the firm’s long term debt of more than $200m, which many commentators say is due to be paid by 2014.

Another attempt at a flotation may happen sooner rather than later as the firm looks to service that debt. The fate of US retail giant Guitar Center, which accounts for around a sixth of Fender’s US sales and has enormous debts of more than $1.5bn is also of concern.

Tags: Fender , guitars , hamer , Manufacturer

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