As if one blockbuster business deal in our industry isn’t enough (see my blog about Avid yesterday), today the news came from the Wall Street Journal that Guitar Center was in talks about being acquired by one of its creditors.

It appears that Ares Management, who owns the majority of Bain Capitol’s (the owner of GC) debt, is in discussions to convert the debt into equity by taking over the majority of the company.

Talk about sending shudders through the industry, this is going to change the landscape of music retail, for better or worse.

Ares wants their money, so watch as they squeeze GC by making it leaner and meaner than ever, all at the expense of the customer. If you think doing business with them now is hard, just wait until this comes down. Fewer sales people that turn over even more frequently, less stock on hand, only the latest products and no deep inventory – that’s what you can expect. It’ll be the way it is now, only worse, if you can imagine.

And expect to see some of your favorite small manufactures either struggle or go out of business, as GC cuts its inventory and SKU’s even more. For all those companies depending upon GC for a good chunk of their business, times are about to get a lot tougher.

And we may be seeing the beginning of the end of GC, at least as we know it. Ares could just decide it wants as much money as it can get right now and liquidate it.

The good thing out of all of this could be the rise of the indie music store again. I relish the days of individual services from people who really cared.

Once again, this is a small industry filled with creative people. It’s too small for a company to go public, roll up smaller companies, or grow to big box levels without the customer suffering.

I want to thank Eric Garland for his heads up on the story. He’s been on top of this from the start.