Guitar makers abide in Orange County.
Fender Musical Instruments Corp., which had its beginnings in Fullerton, drew attention last week when it withdrew plans for an initial public offering for about $150 million.
The once-local iconic guitar company has been headquartered in Scottsdale, Ariz., since 1991, but its legacy remains in OC in a handful of other manufacturers who string their passion and careers together to build electric guitars.
Among them are:
n GJ2 Guitars, based in Laguna Hills, was founded by two musicians who have worked with Fender.
n Rickenbacker International Corp., located in Santa Ana since the 1950s; its current owner’s father backed Leo Fender to start his company.
n G&L Musical Instruments is a Fullerton-based guitar company created by Fender and later acquired by Huntington Beach-based BBE Sound Inc.
GJ2 Guitars is the newest among the group of guitar craftsmen, established by guitar enthusiasts who have done few other things in life besides music. Grover Jackson and Jon Gold came together at the 2011 National Association of Music Merchants show in Anaheim and combined efforts to officially launch the GJ2 brand at the 2012 event.
The small guitar maker aims for the high-end and exclusive market, with models selling for about $3,000. The company currently is rolling out a new, more affordable line of guitars with fewer cosmetics and a $1,899 price tag.
“That allows accessibility to a different market,” said Gold, who quipped that his CEO title stands for Chief Enthusiast and Optimist.
“We probably couldn’t have picked a much worse time to start,” he said. “We are still coming out of the recession; it’s very tough. But because it’s a passion-driven industry, it’s easier than starting anything else. If we were trying to start a refrigerator brand, we probably wouldn’t have gotten off the ground.”
Enthusiasts
It helps that the music industry feeds on music enthusiasts, a circle in which collecting instruments is not uncommon.
But “an industry entirely fueled by enthusiasts” isn’t easy to penetrate in tough economic times, especially for a young company, Gold said.
“People are hesitant to buy high-end guitars, and it’s hard to build a new market, even with Grover’s name and my network,” he said.
Jackson-built guitars have been used by a number of famed artists for decades, especially through the rock ‘n’ roll heyday of the mid-1900s.
The otherwise nondescript walls of GJ2’s main office hold photographs and memorabilia of well-known musicians who have performed with custom-made guitars Jackson crafted over the years, including Dave Gilmour from Pink Floyd. Other musicians in Jackson’s network include Eddie Van Halen, and jazz fusion guitarist Allan Holdsworth, who has ties to San Juan Capistrano.
“There’s a tremendous demand for guitars made by Grover Jackson,” Gold said. “He changed guitar manufacturing in the late 1970s and early 1980s, a dismal period of time for U.S. guitar manufacturing.”
Jackson began playing the guitar in the 1960s while growing up in East Tennessee. He’s had a number of stints at various guitar-repair and manufacturing shops, including working as a subcontractor during the past decade.
“In 2000, I started a job-shop company and did work with Fender, Rickenbacker and G&L … until Jon and I got together for this new venture,” Jackson said.
Fender Vet
Gold at that time had been working at Fender as senior vice president of international sales. He left Fender in 2010 after more than 12 years and moved to OC.
Gold taps into his wide circle of networks as head of sales and marketing for GJ2, while Jackson and two other full-timers work on the actual design and building.
“We’re doing pretty well overseas,” Gold said. “That’s where I’m strongest. And we’re continuing to build the U.S. market.”
The company has about 20 dealers in the U.S. and abroad, including in the U.K., Australia and Japan.
Gold declined to disclose sales figures or revenue.
“We’ll just say that … each month, we’re growing incrementally bigger,” he said. “In a really bad economy, and in an industry really dominated by two or three big companies, we made the decision to take some capital to do something we believe in. We don’t want to follow the route of other companies where they go offshore as soon as they can. We are also committed to OC. We were thinking about going out to Corona, where, frankly, it would be cheaper and easier from a production point of view. But we both like OC.”
U.S.-based manufacturing and local roots also are important for Santa Ana-based Rickenbacker International, which has been making electric guitars since 1932. Owner John Hall’s father, Francis, bought the company in 1953 from founder Adolph Rickenbacker and brought the company here from Los Angeles.
Rickenbacker
Rickenbacker sells electric guitars and basses starting from $2,000 and runs all manufacturing in its OC facility with about 55 employees involved in production. The family-run company has about 75 employees total.
It sees revenue that’s slightly shy of $10 million and runs machines at half capacity for now. That’s to keep pace with the amount of work that can be done by employees, since much handwork is involved in the manufacturing process, according to Hall.
“We’re probably only satisfying an eighth of the demand we get,” he said. “It’s not that we’re trying to keep production down. If I could double my production, I would literally double the sales. But on the other hand, I will not compromise the quality of the guitars.”
Hall’s father had been running an electronic components company in the early 1900s when he came to work together with Fender Musical Instruments founder Fender, who at the time had a radio repair shop. Hall provided Fender with the capital to launch a guitar business in the 1940s and was the sole distributor of Fender guitars.
“Fender was a relatively small part of my dad’s business,” Hall said. “He then bought Rickenbacker and actually thought of integrating them together, but that didn’t happen. He continued with Rickenbacker from 1953 on. The [manufacturing facility] moved to Santa Ana in 1964, lining up with the arrival of the Beatles.”
Rickenbackers were played by John Lennon, who owned at least four, and Pete Townshend from The Who. Tom Petty still plays them.
“It’s more so the heritage [of the company] that keeps us here in OC,” Hall said. “There’s no economic reason to be here, but it’s historical.”
Exports make up about 60% of Rickenbacker’s sales.
“We’re trying to hold that down, because we’ve been starving the U.S. dealers,” Hall said. The company counts about 200 dealers here.
G&L
G&L Musical Instruments was founded by Leo Fender in 1980. It was sold to BBE Sound after he died.
BBE is a family-run manufacturer of amplifiers, equalizers and other devices for musicians.
“The BBE line is sold in major music retailers such as Guitar Center and Sam Ash stores,” Executive Vice President David McLaren said.
BBE audio technologies are licensed by major consumer electronics makers, including Sony and Samsung.
G&L guitars are sold through more than 40 distributors around the globe.
About 20 custom-ordered G&L guitars and basses are built each day at the Fullerton factory on Fender Avenue, with prices ranging from $1,500 to $3,500, according to McLaren. A midpriced line of guitars, under the name G&L Tribute Series, goes for about $600 to $1,000.
“About 1,000 G&L Tribute Series instruments are sold each month,” McLaren said. “The past couple of years have seen a remarkable rebound in sales, demonstrating the resilience of the musical instrument industry. We are always conscious, however, that musical instruments such as guitars are non-essential luxury goods. The upshot is that as the culture of rock and roll continues to grow in emerging markets, there are millions more potential customers each year.”
