Guitars bring solace to millions of people – and money to Hawaii’s largest car dealership
Over the past two years, the Covid-19 crisis has produced well-documented benefits for companies like home fitness company Peloton and Zoom Video Communications. But another business – this one based in Hawaii – has also thrived amid the pandemic for some unexpected reason.
Servco Pacific, which is best known for selling Toyotas and Lexuses, was uniquely positioned to capture a wave of interest from people locked in their homes looking for creative, artistic and emotional outlets. The reason: Servco is also the majority owner of Fender Musical Instruments Corp. – the iconic maker of guitars like the Stratocaster and the Telecaster. And millions of people have started playing guitar and other fretted instruments, like ukuleles and basses, over the past two years.
“Our estimate is that 16 million new beginners started during Covid in the United States,” said Mark Fukunaga, president and CEO of Servco. “It’s enormous.”
The boom was so big that the editor of a music magazine compared the impact of Covid on entry-level six-string purchases to that of Beatlemania. Rolling Stone asked, “Did everyone buy a guitar in quarantine or what?” “
And Fender – and by extension the music division of Servco – saw its sales increase by 30% in 2020 and the same in 2021, Fukunaga said.
In dollar terms, the increases were in the range of $ 100 million per year, Fender chief executive Andy Mooney recently told CNBC.
Fukunaga said he expects 2022 to stay strong, although he said a lot depends on Covid-19 and the new omicron variant. Sales are strong from pre-pandemic levels, Fukunaga said, although he said growth had slowed somewhat as governments relaxed restrictions.
“Whenever we start to normalize – and a lot of it depends on how the omicron grows – we always see growth,” he said. “We are still quite optimistic.
Leo Fender played the “Hawaiian” Lap Steel guitar
Although Servco is best known for selling cars – in addition to dominating Hawaii, it is Australia’s largest Toyota dealership – the company’s musical roots run deep. In fact, its musical DNA dates back to the 1930s, when Fukunaga’s grandfather, Peter Fukunaga, started Easy Music as a subsidiary of his home appliance company, Easy Appliances.
In the 1950s, Easy Music linked up with Clarence Leonidas “Leo” Fender, who was creating archetypal guitars like the Stratocaster and guitar amps. At the time, Fender’s connection to Hawaiian music was more than superficial. Before Fender made modern electric guitars, its dominant product was the lap steel guitar often used in Hawaiian music, Fukunaga said.
In fact, Fukunaga says, “Leo was not a regular guitarist; he was a lap steel player.
Connections to Hawaii also involved equipment. Leo Fender saw a self-taught Maui guitarist and amplifier engineer named Freddie Tavares play a gig in California, Fukunaga said, and hired Tavares to help make the Fender amplifiers. Tavares is also credited with helping to design a component for the Stratocaster.
In the 1980s, according to the Servco website, the company was part of the small group of investors who backed Bill Schultz in buying Fender from CBS. Some 25 years later, Servco increased its stake by acquiring a significant stake in Fender from Weston Presidio, a private equity firm.
In 2005, Servco sold Easy Music to Peter Dods, a former Wall Street analyst and son of longtime First Hawaiian Bank CEO Walter Dods Jr. – the hops artists, but his father, who was on the board of Servco administration, convinced him to sue the larger company.
Peter Dods says he knew people would think his parents were buying a business for him, but he said, “Really, it was more my dad pushing me off the edge.”
In any case, the pandemic was also a boon for Easy Music. Home and mobile recording equipment flew off the shelves during the early days of the pandemic, as locked-in musicians sought to release their music when live concerts were verboten.
Since then, sales have grown across the board – guitars, keyboards, and recording gear are all popular, Dods said. Now that things are opening up, DJ equipment is regaining in popularity.
None of that just happened, Dods says.
Initially caught off guard by the pandemic in terms of online presence, Easy Music quickly bolstered its e-commerce business. The company now adds about 100 new products per month. And, like many retailers, there were times when Easy Music had to shut down on government orders and needed help from the federal paycheck protection program.
“Without it, maybe we should have thrown in the towel,” he said.
Online tools convert newbies
Among those who bought a guitar when the world was shutting down was Murti Hower. A 62-year-old yoga instructor, Hower hadn’t played since he quit trying at 14. Without a job and mostly stuck at home in March 2020, Hower thought, “I just need to do something; I’m going to be crazy.
So he ordered a Fender acoustic guitar online. Since then, the guitar has become a friend of Hower and his wife, Larina Hawkins. They named the Joni guitar after singer Joni Mitchell, and now Hower has a band that includes friends on tambourine and harmonica. They meet at Kapiolani Park for full moon jam sessions.
“We look terrible,” he says. “We are not ready to do shows. But we’re having fun. “
Of course, not all new players have bought Fenders – or new instruments at all. Rose Wright is a good example. A massage therapist and personal assistant who lives in Hawaii Kai, Wright retrieved a used ukulele from a client she was helping to get rid of the clutter.
Wright took the instrument to a friend who renovates instruments, and soon after, Wright joined an informal hui practicing the ukulele outside in a park once a week.
Wright says she tried playing guitar 20 years ago, but quit out of frustration. One difference now, she says, is that there are plenty of tools online to help her learn, especially YouTube videos. After forcing herself to train 15 minutes a day, Wright says she is now at 35 minutes.
“When you play with YouTube you get a sound that you get into,” which makes the practice more enjoyable, she said.
His advice to beginners: “If you play a little bit every day, even 15 minutes, you get better, and who doesn’t have 15 minutes?”
Wright and Hower embody what the Fender market research shows, Fukunaga said.
For example, he said, online tools have become an extremely popular way for people to learn. When Fender offered 1 million free subscriptions to its Fender Play course site during the early days of the pandemic, Fukunaga said the company might expect tens of thousands of new subscribers. Instead, 1 million joined in a matter of days.
Research also shows that people tend to stick with playing for as long as they can get through what Fukunaga calls the “Death Valley” of the early days when practicing isn’t fun.
“If you can get people over that one-year bump, they tend to be lifelong players,” he said.
Finally, said Fukunaga, there is the milestone of playing for an audience, which he calls an “inflection point” that can solidify an aspiring player’s engagement with art. These performances include posting videos to social media platforms like YouTube and Instagram, where no one expects a newbie artist to be stellar.
“Social media is really about showing off and promoting yourself,” he said.
Servco’s extraordinary place in the world of music has not been lost on Fukunaga. He knows that few other brands are so popular that they inspire people, some of whom don’t play guitar, to wear t-shirts and / or get the company logo tattooed.
But that doesn’t mean to sit still. In October, Fender announced a merger with recording technology company PreSonus, which manufactures a line of sound products including recording software, microphones, mixing systems, and speakers. The ad recognized that times are changing, as guitarists these days don’t want to just plug into a hot, buzzing Fender vacuum tube amplifier.
“Many also plug their instruments into interfaces, using virtual amps and effects to create their sounds,” Fender said in a statement announcing the deal. “Gamers of all skill levels are spending more time online than ever before and using a variety of products and technologies to learn, train, play and play, record and share. This modern workflow has expanded the traditional signal chain to include the capture and distribution of creative content around the world.
Helping position Fender for the future while staying true to its roots is vital for Servco, which started as a two-car auto garage in Waialua in 1919, Fukunaga said. This includes giving back by donating 2,750 ukuleles and acoustic guitars to public schools in Hawaii and helping to found a group supporting a voting measure in California that provides more funding for arts education.
“Fender is now a core business for us for the long haul,” he said. “We saw ourselves as the guardians of this incredible heritage. “