Guitars on display at Guitar Center. (Photo courtesy of Flickr user Stephen Cummings. Licensed under Creative Commons.)
At the end of May, employees at Guitar Center’s flagship store in Manhattan overwhelmingly voted to form a union of its fifty-seven retail workers. The national Retail, Wholesale and Department Store Union (RWDSU) organized the win, marking what the union hoped would be the first of many such votes around New York City and the rest of the country.
Brendon Clark, 28, was one of the workers who voted to unionize. Clark has been working at Guitar Center for four years.
“It’s been a long time coming,” said Clark. “Our grievances have been at play for at least six or seven years, the main thing being how we’re paid and our compensation. No one ever considered a union, and a lot of that is because of how the company has not necessarily blocked unions, but just kind of blocked any way for employees to maybe press on the issue.”
Clark was hired about a year after Bain Capital bought Guitar Center in 2007, and he says a regular sales person at the store used to have a lot of autonomy, but things started to go awry when Internet sales for guitars and other equipment boosted and workers suddenly had to compete with giant online retailers like Amazon.com. Guitar Center tailored its marketing and discounting to represent the way the market was turning, and workers like Clark say their hourly wage and commission structure have been slashed since the investment firm took over.
“What they started to do was offer sale prices all the time, price-matching Amazon, and basically doing whatever they can to make sure the customer leaves satisfied at the lowest price possible, but with the company doing that, in order for that demand to be met, they have to cut away at pricing, which cuts away at profit, which ultimately cuts away at our pay check because we’re 100 percent commission employees,” he says.
“We’re paid on a pay structure that existed before the Internet existed. The company has modified their strategy in marketing and their web presence, and just about every way they do business, except for how they pay their employees,” said Clark.
Within the past three years, Guitar Center has rapidly expanded. Four years ago, the chain had 200 stores and it was very rare for the company to open another one. Within the past six months alone, it has opened ten stores.
“We’ve seen more stores open, we’ve seen more emphasis on dot com sales, and they were neglecting existing stores and existing markets that were profitable, and the number-one profiting store is Manhattan, and it was falling by the wayside,” Clark says.
Guitar Center management was less enthusiastic about the vote.
“We always want to have a working environment that our folks love, and it’s unfortunate that we now have a third party involved,” says Dennis Haffeman, executive vice president of human resources for Guitar Center, a $2.1 billion retail chain owned by Bain Capital. “We’re constantly listening to our employees’ needs so that Guitar Center can be the best work environment in the music industry and, quite frankly, the best in retail.”