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Topic: MusicBiz News: Woodwind & Brasswind Enters Bankruptcy; Guitar Center buys

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  1. #1
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    MusicBiz News: Woodwind & Brasswind Enters Bankruptcy; Guitar Center buys

    On Nov. 22, Guitar Center announced it has signed an asset purchase agreement to acquire substantially all the assets of The Woodwind & The Brasswind under section 363 of the United States Bankruptcy Code. Under the terms of the agreement, Guitar Center will acquire The Woodwind & The Brasswind's inventory of band and orchestra and combo instruments, accounts receivable, trade names, and certain other intangible assets. The transaction is subject to a number of conditions, including bankruptcy court approval, and is also subject to overbid at a bankruptcy auction expected to be held in January.

    Marty Albertson, chairman and CEO of Guitar Center, said, "The acquisition of assets of The Woodwind & The Brasswind, including the Woodwind and Brasswind and Music123 Web sites, will enable us to further expand the already strong combo instrument business at Musician's Friend as well as build out our direct response band and orchestra business. We are excited about the opportunity to broaden our customer base and continue the growth of our direct response business."

    The Woodwind & The Brasswind filed for Chapter 11 bankruptcy protection in Indiana on Nov. 21. The proposed asset acquisition agreement was entered into by the Musician's Friend subsidiary of Guitar Center. Under the agreement, only very limited trade obligations and other pre-petition liabilities of The Woodwind & The Brasswind are being assumed.

    The demise of the South Bend, Ind.-based dealership, which booked 2005 sales of $136 million (down from $145 million in 2004), appeared to stem from the outcome of a lawsuit involving former minority partners Stephen and Richard Zapf. The Woodwind & The Brasswind had acquired Philadelphia-based Zapf Music Stores, Inc. in 2002, with the former brick-and-mortar business becoming the Internet-only marketer Music123. While Music123 prospered following the deal with sales escalating from $20 million to $58 million annually over the next three years, the relationship between the Zapf brothers and Woodwind CEO Dennis Bamber soured, and both Zapfs were terminated in 2004. The Zapfs then sued, Woodwind countersued, and the court found in favor of the Zapfs in September to the tune of $9 million. In a report published in the South Bend Tribune, Bamber said the bankruptcy filing was necessitated to protect the company from the outcome of the lawsuit. The court filing also cited the costs involved with closing a New Jersey distribution facility and the opening of a new distribution center, as well as an $800,000 expense related to software licensing and upgrades.

    Bamber told the newspaper he expects to stay on with the company he founded in 1979, either as an employee or consultant. All of The Woodwind & The Brasswind's approximately 240 employees are expected to also retain the positions with the company.

  2. #2

    Re: MusicBiz News: Woodwind & Brasswind Enters Bankruptcy; Guitar Center buys

    Lots of big-name mergers of late.

    I hope they don't change much to WWBW.

  3. #3

    Re: MusicBiz News: Woodwind & Brasswind Enters Bankruptcy; Guitar Center buys

    When did Guitar Center acquire Musicians Friend?
    Wheat Williams
    Atlanta, Georgia, USA
    Music Copyist in Sibelius
    Apple MacBook Pro, Mac OS X 10.8 Mountain Lion
    Apple Certified Support Professional. I also work with Windows.

  4. #4

    Re: MusicBiz News: Woodwind & Brasswind Enters Bankruptcy; Guitar Center buys

    Quote Originally Posted by Ernstinen
    Poor South Bend has had a string of bad luck. First their Studebaker factory shuts down, and now this!

    Ern
    What!? The first I've heard of this.

    Where am I going to get parts for my Studebaker, now?

    David
    www.DavidSosnowski.com
    .

  5. #5
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    Re: MusicBiz News: Woodwind & Brasswind Enters Bankruptcy; Guitar Center buys

    Now it's Steinway...

    Steinway Enters Bid for Woodwind & Brasswind
    $40.5 million offer may signal bidding war with GC
    On Dec 5, Steinway Musical Instruments, parent company of Conn-Selmer Inc., said it will pay $40.5 million for South Bend, Ind.-based Woodwind & Brasswind, creating the potential for a bidding war with WW&BW’s other suitor, the Musician’s Friend division of Guitar Center.


    The Steinway bid is $3.4 million more than the Nov. 22 offer from Musician’s Friend. Judge Harry Dees had scheduled a hearing yesterday (Dec 7) in U.S. Bankruptcy Court in South Bend to approve the bid rules governing the sale.


    Companies trying to sell their assets under Chapter 11 protection must submit to an auction procedure even when a buyer has come forth to ensure creditors can recover as much as possible of what they are owed.


    On Nov. 22, Guitar Center announced it has signed an asset purchase agreement to acquire substantially all the assets of The Woodwind & The Brasswind under section 363 of the United States Bankruptcy Code. Under the terms of the agreement, Guitar Center would acquire Woodwind & Brasswind's inventory of band and orchestra and combo instruments, accounts receivable, trade names, and certain other intangible assets.

  6. #6

    Re: MusicBiz News: Woodwind & Brasswind Enters Bankruptcy; Guitar Center buys

    I think Guitar center has had Musicians friend for a few years now...

  7. #7

    Re: MusicBiz News: Woodwind & Brasswind Enters Bankruptcy; Guitar Center buys

    Oh good grief!!!

    I watch this nonsense and shake my head most of the time. This one, however, really hit close to home.

    Zapf's music was a Philadelphia mainstay when I was in high school. When I moved back into the area a few years ago I was disappointed to discover that they were a mere shadow of their former selves, and then the unthinkable, they went away completely.

    One of my fondest high school memories is my Dad taking me to Zapf's (actually we hit a number of stores that day) looking for my first "real" guitar amplifier. I had my heart set on a Marshall stack, but the sales guy at Zapf's made me try a bunch of different amplifiers, and I ended up buying an Aims (they no longer exist, and sadly I sold it when I graduated from HS) which served me really well, and was a heck of a lot more reliable than all my friend's Marshalls<G>! The sales guy also let me play with this goofy little stompbox called a Mutron III. It was the coolest thing I'd ever run across, and he discounted it pretty steeply so I could buy it too.

    Anyway, I am not sticking my head in the sand, I recognize the fact that the entire marketplace is revising itself, but dang, I miss being able to go to the local music store to try out new things. In this area there is arguably one major music store left, and even they don't carry the breadth of lines they once did. There is also a regional chain that stocks all the necessities, which is odd in my opinion, because if there was something I'd buy on line it would be strings and picks and capos etc.

    Certainly I would never buy a guitar, amplifier, or even a stomp box without actually using them first, and in the case of a guitar I mean the actual guitar<G>!

    Software and sample libraries are another challenge, as we have discussed previously. The only libraries I've purchased without using them first are GPO and JABB. In the case of GPO I was largely emboldened by my experiences with GOS, and when JABB came around it was nearly a no-brainer.

    Anyway, it is sad to see Zapf's continue it's fall from glory!
    Bill Thompson
    Audio Enterprise
    KB3KJF

  8. #8

    Re: MusicBiz News: Woodwind & Brasswind Enters Bankruptcy; Guitar Center buys

    Quote Originally Posted by wst3ae
    Oh good grief!!!

    I watch this nonsense and shake my head most of the time. This one, however, really hit close to home.

    Zapf's music was a Philadelphia mainstay when I was in high school. When I moved back into the area a few years ago I was disappointed to discover that they were a mere shadow of their former selves, and then the unthinkable, they went away completely.

    One of my fondest high school memories is my Dad taking me to Zapf's (actually we hit a number of stores that day) looking for my first "real" guitar amplifier. I had my heart set on a Marshall stack, but the sales guy at Zapf's made me try a bunch of different amplifiers, and I ended up buying an Aims (they no longer exist, and sadly I sold it when I graduated from HS) which served me really well, and was a heck of a lot more reliable than all my friend's Marshalls<G>! The sales guy also let me play with this goofy little stompbox called a Mutron III. It was the coolest thing I'd ever run across, and he discounted it pretty steeply so I could buy it too.

    Anyway, I am not sticking my head in the sand, I recognize the fact that the entire marketplace is revising itself, but dang, I miss being able to go to the local music store to try out new things. In this area there is arguably one major music store left, and even they don't carry the breadth of lines they once did. There is also a regional chain that stocks all the necessities, which is odd in my opinion, because if there was something I'd buy on line it would be strings and picks and capos etc.

    Certainly I would never buy a guitar, amplifier, or even a stomp box without actually using them first, and in the case of a guitar I mean the actual guitar<G>!

    Software and sample libraries are another challenge, as we have discussed previously. The only libraries I've purchased without using them first are GPO and JABB. In the case of GPO I was largely emboldened by my experiences with GOS, and when JABB came around it was nearly a no-brainer.

    Anyway, it is sad to see Zapf's continue it's fall from glory!
    You are so right about Zapf's. They were a class store. Their sales people were not on commission, so they could be honest about what they sold. They used to care a nice selection of classical guitar music, which is impossible to find in the Philadelphia area now that Theodore Presser's retail outlet has also gone out of business.

    I've been disappointed so many times in ordering music on line that I have not been anle to see or hear.. Even though I certainly don't know the situation, I hope the Zapf brothers get something out of this.

    Karl

  9. #9

    Re: MusicBiz News: Woodwind & Brasswind Enters Bankruptcy; Guitar Center buys

    When I was a professional brass player I bought most of my stuff through WW&BW - it's kind of sad to see them go through this - sad, but not surprising. These are hard times for MI industry. Steinway stepping in to save Woodwind and Brasswind... that's really intersesting - it will be interesting to see if GC will let it go or re-up their bid.
    Houston Haynes - Titan Line Music

  10. #10
    Senior Member
    Join Date
    May 2005
    Location
    Recanati, Italy
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    164

    Re: MusicBiz News: Woodwind & Brasswind Enters Bankruptcy; Guitar Center buys

    Gary, have you seen what your libraries have caused?

    (Joking apart, the new, recent funding cut to orchestras here in Italy will probably cause a worsening of the crisis; anybody wants some Italian orchestral players for cheap?).

    Paolo

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