EDITORIAL
Optimism Abounds If you can only take one thing away from both this month’s and last month’s issues of the Music & Sound Retailer, it should be this: There is plenty of optimism in MI right now. We definitely saw that last month in our guitar update, with sales numbers looking very strong last year and our manufacturer panelists adding this year has been excellent as well. We also saw plenty of optimism in last month’s print update cover story, and the optimism continued at this month’s Retail Print Music Dealers Association (RPMDA) annual convention in San Diego. (Much more on that in next month’s issue.) The good vibrations can also be found in droves in this issue you are about to read, with pro audio manufacturers pointing to a strong industry. And our “Five Minutes With” feature proves this point even more, thanks to Korg USA’s Andy Rossi’s comments. Everything sounds great, doesn’t it? There is no question the MI industry continues to hum along, and the decline the industry saw years ago seems like it’s miles away. It’s really exciting and you, as an MI retailer, deserve a ton of credit for this success. Of course, even at the best times, problems can arise — most notably, complacency. Many of us fall victim to it, myself included. We think things are great and we can relax. We cannot do that, though. You need to use this time to continue to strengthen your business. If your profits have been up lately, now is a good time to spend a little on something you always wanted to do, like marketing, social media or website development. Several of the retail columnists in this magazine can help you achieve your goals. Another option, if money has been flowing more freely, is attending Summer NAMM in July in Nashville, where you’ll be able to take part in a great exchange of ideas that can help your business. Because no matter
what, the next downturn will come eventually. It may not be tomorrow or even a year from now, but it will happen. Personally, if I had to guess, we will see some deceleration in the economy by some point in 2020. I have two main reasons for saying this. First, we recently experienced an inverted yield curve. Yes, it’s a fancy term. In simpler vernacular, it occurs when the yields on bonds with a shorter duration are higher than the yields on bonds that have a longer duration. It is important because it predicts recessions, and past inverted yield curves correctly predicted recessions in 1981, 1991, 2001 and 2008. Of course, this doesn’t mean history will definitely repeat itself. Nobody knows. But I’ve noticed in my time covering retail industries that history often does repeat itself. Second, some companies are currently suffering an earnings recession. In other words, overall corporate earnings are on the decline compared to a year ago. Hence, earnings are no longer increasing year over year for many companies, which is not a great sign. Of course, there is an opposing opinion. Goldman Sachs recently predicted only a 10-percent chance of a coming recession. And certain corporations continue to hit it out of the park and increase earnings. But either way, we must enjoy the success the MI industry has had. Hopefully it continues, and I am definitely not intending to be an alarmist. Instead, I think it’s a good opportunity to evaluate all aspects of your business and determine what your strengths and weaknesses are, no matter if we enter a future recession or not.
May 2019 Volume 36, No. 5
BRIAN BERK Editor bberk@testa.com ANTHONY VARGAS Associate Editor avargas@testa.com AMANDA MULLEN Assistant Editor amullen@testa.com
JANICE PUPELIS Art Director STEVE THORAKOS Production Manager CIRCULATION circulation@testa.com FRED GUMM Digital Art Director
DONOVAN BANKHEAD ROBERT CHRISTIE KIMBERLY DEVERELL JEFF KYLE JR.
MICHELLE LOEB WILL MASON ALLEN MCBROOM GABRIEL O'BRIEN ROBERT SAMPLE
ROBERT L. IRAGGI Advertising Director riraggi@testa.com RICKY PIMENTEL Art/Production Assistant rpimentel@testa.com ROBIN HAZAN Operations Manager rhazan@testa.com VINCENT P. TESTA President/Publisher TIM SPICER DAN VEDDA LAURA B. WHITMORE Contributors
Editorial and Sales Office: The Music & Sound Retailer, 25 Willowdale Avenue, Port Washington, New York 11050-3779. Phone: (516) 767-2500 • Fax: (516) 767-9335 • MSREDITOR@TESTA.COM. Editorial contributions should be addressed to The Editor, The Music & Sound Retailer, 25 Willowdale Avenue, Port Washington, New York 11050-3779. Unsolicited manuscripts will be treated with care and must be accompanied by return postage. Sound & Communications • DJ Times • Sound & Communications Blue Book The Music & Sound Retailer • The DJ Expo • IT/AV Report The Retailer Report • Convention TV @ NAMM • InfoCommTV News VTTV Studios The Music & Sound Retailer (ISSN 0894-1238) (USPS 0941-238) is published 12 times a year for $18 (US), by Retailer Publishing, Inc., 25 Willowdale Ave., Port Washington, NY 11050-3779. Periodicals postage paid at Port Washington, N.Y. and additional mailing offices. POSTMASTER: Send address changes to The Music & Sound Retailer, PO BOX 1767, LOWELL MA 01853-1767
MAY 2019
