Five Minutes With

CHRIS MARTIN IV

CEO, C.F. Martin

By Brian Berk

July will be a time of much change for Chris Martin IV, CEO of C.F. Martin. At his company, he will assume the role of executive chairman, with a search currently underway for a new CEO of C.F. Martin. Martin will also end an eight-year tenure on the NAMM board of directors, including the past two years as NAMM chairman. Clearly, there are many questions to ask of Martin, who has spent more than 40 years in MI. If you want both honest and informational answers to our questions, you have come to the right place. So, let’s dig right in.

The Music & Sound Retailer: It is certainly hard to think of just a couple of memories from your time at C.F. Martin. But can you think of any really important moments for either you or the company in the past 40 years?

Chris Martin: Let’s go back to the beginning of my career. My parents were divorced, but by high school, I was beginning to show interest in the business. So, I would come visit [the factory] and generally stay with my grandfather. One summer, I followed a guitar through production. That was fascinating. That’s when I really got into it. I thought, This is something. People are really dedicated to making this thing that makes music.

Then, I went off to college, and at that point, it was the tail end of my dad’s career. He joined the business, catching the folk boom. He made a few acquisitions. Darco Strings was brilliant. The other three did not work out very well. Through that time, I saw a bunch of stuff happen. My dad saw his career peak, and he was challenged by the fact that business was getting more difficult. It wasn’t just how many more D-28s can we make, because the world wants them. Music was moving away from the acoustic guitar and going to disco and digital sampling keyboards. It was a really challenging time for the company. In hindsight, I said to myself, Are you sure you really want to do this? It was the tail end of someone else’s life — my dad’s life and my grandfather’s life. But, although my dad and I had an awkward relationship, my grandfather and I became very close. He saw in me the next Mr. Martin. I saw in him the Mr. Martin who was going to keep this business going no matter what. That helped me.

My father retired under duress, and my grandfather passed away because he forgot to retire. That’s when the board [of directors] put me in charge. I said, “OK, I am doing this because I am a Martin.” I felt an obligation to at least try to help the business, to see if the business could survive. At that point, it was just survival. My dad hobbled the company with a lot of debt. Our banks fired us. They said, “We are done with you.” There was a lot of bank consolidation, and the people who bought the local banks did not know my dad, looked at the books and said, “This is a mess.” So, we ended up working with a little bank in Reading, [Pa.]. We would get calls every day from the CFO [chief financial officer] about whether the bank could send us money or if we needed us to send them money. That [daily] discipline was good because it made us understand that business is precarious. There isn’t a guarantee success will continue into the future. That was a really good thing for me to learn very early in my career.

The Retailer: You announced you will be transitioning to an executive chairman role at the company in July. How is the CEO search going, and what qualities are you looking for in that person?

Martin: I have been talking about retirement, off and on, for about five years. I am also concluding as NAMM chairman [in July], and I looked beyond those commitments and asked myself if I still want to be Mr. Martin, CEO. I said, “No. I don’t.” [My daughter] Claire, who is 16 and just got her driver’s license, said to [my wife]

"If you walk down the street with a big smile in a very friendly way, stop someone randomly and ask, 'Do you believe in music?,' the answer is 'yes.' It is a bit of a rebranding, but the message is more understandable to those of us who do not know what NAMM is. Our audience is beyond NAMM. Our audience is anyone who believes in music."

Diane [recently] that “I am thinking about minoring in business when I go to college.” I said “Oh, OK” [in an enthusiastic voice]. But she is not ready. She is only 16. Even if she wanted [the CEO job], she is not ready. So, we need an interim CEO. It is not unusual in a family businesses, depending on where the generations are. So, the challenge is to find someone who understands it is a business, but it is a very special business. The candidates we have interviewed are quite intrigued by the special nature of the Martin Guitar business. They all have an understanding of the value of music and the place the Martin guitar has in that history of American, and particularly British, music. The next step is to look at all the people we interviewed and determine how many we should meet in person, because so far, it has just been by Zoom. I hope to have someone help me run the business as I come out “the other side” as executive chairman and [end my term] as NAMM chairman.

The Retailer: I certainly need to meet Claire if she may be the future CEO of the company…

Martin: We have done a lot of estate planning. We want to keep the business in the family. We told Claire, as the only heir, that she will end up owning a majority of the company someday. We told her if she does not want to run the business, that is fine. We told her she will have seat on the board someday and she can be chairperson of the board if she is so inclined. “If that’s enough, hire good people, hold them accountable, and I think it might work out,” I told her.

The Retailer: We previously asked you last year about how you handled the pandemic. So let’s take another angle. According to MI SalesTrak, guitar sales were up 15 percent in 2020 versus the prior year. Are you impressed guitars have done so well when people could have chosen other hobbies during the pandemic instead?

Martin: Let’s go back to the pre-pandemic [period]. Where were these new customers then? Why weren’t they buying guitars then? I mean no disrespect by this, and it is my personal opinion: Of all of the other previous guitar booms that I have experienced in my career, and watching my dad and grandfather, all of them were driven by the music. Again, I mean no disrespect, but this one

I think is driven by boredom. I am not sure how durable boredom is. When it is music [driving guitar sales], I get it. “I am buying my guitar hero’s guitar because I love their music.” Now, “I am buying a guitar because I am bored.” Will those people who bought their first guitar actually learn to play it and stick with it? I hope so. Time will tell. None of these booms last forever. I never experienced the boom and bust my dad and grandfather did back in the ‘70s and ‘80s. But I have seen ups and downs throughout my career. I think, someday, this will end, particularly if all of us [manufacturers] increase production and try to catch the bus at the same time.

The Retailer: There is certainly no way MI can keep all of these new players involved and engaged. But is there a way to keep some of them?

Martin: As an example, let’s talk about [NAMM’s virtual trade show in January] Believe in Music Week. As NAMM chairman, I suggested to my colleagues that we jump in with both feet. I knew it was novel and never had been done before. If I were not NAMM chairman, we probably would have looked at it from the outside and said, “Yeah, maybe we will participate, but we are not sure what it is.” I think it is an industrywide concern [regarding keeping new players playing]. As [NAMM president and CEO] Joe [Lamond] says, “it is not just more to start, it is fewer to quit.” We have the “more to start.” Now, how do we keep them from quitting? That is a big question we need to keep talking about. The guitar is hard to learn. It is not a simple instrument to learn to play well. That is why people lock themselves into their bedrooms [while learning] and say, “I am not ready for primetime.”

The Retailer: You decided this year to make a big push into the ukulele market. Why did you decide to do so, and how has it worked out thus far?

Martin: I have been watching the uke market for a long time. We have been in it. We never got out of it. But it was not a big part of our product line. The customer that kept us in the business was our Japanese distributor. They told us 10 or 15 years ago that there was a demand in Japan for high-end ukuleles. They basically kept us in the business. The problem was, we were using old fixturing, so we had to look and see if we should redo old fixturing for low volume. We said “yes,” because we have to. That helped us every time demand would pick up a little bit.

I finally ended up calling Brian Majeski [editor of Music Trades] and asked him how big he thought the market is. He said he thought it might be $150 million worldwide. I looked at our sales and said, “Here is Martin Guitar, the oldest ukulele manufacturer on earth, and we own 1 percent of that market.” I said, “I see opportunity. I think we can double our share.” That is our goal for this year. And I said to our colleagues, “You know what our goal is next year? It is double our market share.” [Laughs.] We’ve got some runway here.

The Retailer: Let’s talk about the future of C.F. Martin. When you hire a new CEO, what will you tell him/her are the company’s opportunities for growth?

Martin: I am going to be boring, because sometimes boring works. It has worked for me. One of our directors asked me this relative to all of the CEO candidates we interviewed. I said, “I want to do what people want us to do. I want us to make great guitars, great ukuleles and great strings. That actually keeps us pretty busy.”

My other concern from a competitive standpoint is, I bet our competitors would love it if the new CEO got distracted by some shiny object. “Look at how green the grass is over there Mr. New CEO. Maybe Martin Guitar should start making solid-body electric guitars because they are in demand and we make guitars.” You could get distracted very easily, and our competition would love it if Martin Guitar got distracted from making dreadnought guitars. I am sticking to my knitting. And that is what I hope the new CEO does. We certainly can build on our foundation, like the new 13 Series model. It is an acoustic guitar, but it is different enough that people got excited who have in the past have said “Martin is my dad’s guitar.” Not this one. This is not your dad’s guitar.

The Retailer: Let’s switch gears and put on your NAMM hat. Your executive NAMM tenure is also ending in July as mentioned before. In your last nearly two years as NAMM chairman, you have certainly faced challenges. But can you provide any highlights during this time?

Martin: Well, being NAMM chairman is an eight-year commitment. It is not a two-year commitment. You start as secretary. So, seven and a half years ago, I was secretary of NAMM for two years. And then, when [West Music’s] Robin [Walenta] moved up, I moved up and became treasurer. The value of being treasurer is you get to peek under the hood of NAMM in terms of the finances, and you get a real understanding of the value of a trade show and how the trade show provides fuel for NAMM to reinvest in making music. And then, I became vice chairman. Under normal circumstances, the vice chair’s job is to watch what the chairman does, because you are going to do that [in the future]. I was watching Robin. She was traveling throughout the world with Joe [Lamond] and going to all the trade shows. In the meantime, NAMM’s attorney said, “By the way, NAMM has this foundation, which is really great, but is part of NAMM. That’s not good. This foundation needs to be independent of NAMM. Having it as part of a trade association is problematic from the standpoint of the IRS. They need to be two separate entities and never comingle funds. So, guess what I became? The first chairman of the NAMM Foundation as an independent entity, something I am really proud of, because I am at the point of life where I believe in philanthropy and I can help. It has been a joyful thing for me to be involved with.

We had a great trade show in [2020]. Then, all hell broke loose. I ended up sitting in my chair and talking to a TV [on Zoom calls] for a year. The one advantage I had was, I already had the opportunity to travel the world as Mr. Martin. So, as much as I miss traveling with (continued on page 43)