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Comment by vintermann | Hacker News Reader

Apparently Fender got bought up by a private equity fund, Servco Pacific Capital. Who would have guessed.

Apparently this started back in 1985.

> In 1985, Bill Schultz and a group of investors—including company employees and external companies like Servco Pacific Capitol—purchased Fender from CBS for $12.5 million and renamed it "Fender Musical Instruments Corporation" (FMIC).

> Ownership changed in December 2001, when private equity firm Weston Presidio bought a controlling stake in Fender for $57.8 million.

> Longtime investor Servco instead bought out Weston Presidio, with TPG Growth as an equal partner.

> In 2020, Servco bought out TPG Growth's stake, making them Fender's majority owner.

A long history of private equity ownership. I'm not sure CBS owning them would be much better, which started in 1965.

As much as I like to blame private equity for the downfall of once great companies, I'm not sure how to feel about this one, as they've been investor owned and passed around for decades.

https://en.wikipedia.org/wiki/Fender_%28company%29

IIRC pre-GFC FMIC has a generally good reputation among guitarists, and certainly in comparison to the preceding era of Fender, when it was owned by CBS.

Schulz and co were a big step up from CBS, genuinely. Schulz was associated with the original company, not a random PE firm.

It's the 2000-2020 exchanges that were detrimental

This is true but the buyout happened in 1985. Servco Pacific has been in charge for longer than Leo Fender and CBS, the two previous owners, put together.

Fender? I barely knew 'er.

I play a Gretsch... which interestingly is actually "controlled" by Fender after looking it up; still owned by the Gretsch family

My ex and her bf have been doing this thing where they match any word. For example, "Cardio? I hardly startio." You can do this too now. You’re welcome.

(It’s surprisingly hard to think of a motivating example.)

Makes complete sense to me. Fender has immense cultural cachet among multiple big-spending demographics: blues boomers, Cobain disciples, indie kids, even the hair metal guys via Charvel. The Gibson/Harley-Davidson move of leveraging a company that makes stuff into a lifestyle brand is the play here. Fender would rather throw legal weight around to execute that than compete by building high-quality guitars at a good price.

Too many Clapton lawyers have gotten hip to boutique builders. Fender would rather make them buy a $5000 Masterbuilt Custom Shop Deluxe Roadworn Heritage Double Relic No-Caster than a Tom Anderson or Suhr. Same for kids buying Harley Bentons and ESPs - a $1000 Indonesian-built instrument is their future if Fender has anything to say about it.

> Fender would rather throw legal weight around to execute that than compete by building high-quality guitars at a good price.

The thing is, they already do that, or have in the relatively recent past. Arguably, they invented that move in the 1980s when they started selling non USA/Japanese models as Squier models.

There's only so much that brings them, though, and guitar music ain't what it used to be. The pie isn't growing very much (maybe at all) and now there's competition trying to capture more of the market.

Would Bill Schultz have done the same thing if the 80s and 90s hadn't been so good to rock music? Hard to say, but if the alternative was "No more Fender", maybe.

Masterbuilts are closer to $10k now, fwiw. Plenty of shop built CS hover around $5k or more.

The real change is that the private equity owners also recently bought reverb.com, and must've seen the numbers showing that people aren't buying as many new fenders as they are other brands, and because the only thing they know how to do is extract money from people by destroying rather than creating, they went down this super obvious PE playbook

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