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MARKETING

A Fretless Business

Famous guitar maker has seen a recent surge in sales.
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It's hard enough to run a business under the best of circumstances, but what if your product is subject to wild market surges that come and go without warning? That's the situation in which John Hall finds himself with the guitar company his father bought 36 years ago. Hall insists there were no signs foreshadowing the "exploding sales" that Rickenbacker International Corp. began to ring up earlier this year. He is equally mystified as to when the sales boom will stop. "It's a manufacturing nightmare," he says.

The situation is particularly nightmarish because the manufacturing is done by hand, as it has been since 1929, when a Swiss immigrant, who copatented the first modern electric guitar, founded the company. Ready to retire and convinced that the new electric guitar would never sell big, this inventor sold the business to Hall's father in 1953. However, in 1959 the young John Lennon purchased the first of his several Rickenbackers, and they became all the rage, their crisp, clear tones featured in such songs as The Beatles' "Ticket to Ride" and The Byrds' "Mr. Tambourine Man."

It didn't last. Sales growth slowed by the end of the '60s, as musicians moved on to other styles of music for which the guitars were not suited. Rickenbacker has made a few attempts to capture the market in the 20 years since, but sales had plateaued. A regular guitar shaped like its popular bass was "one of our worst-selling instruments ever," Hall says. "Every time I do something new, I get a million letters saying, 'You've blemished the tradition.' "

But now, suddenly, the Rickenbacker sound is back, in songs by the likes of Elvis Costello and The Bangles. As of April, the company had already sold four times as many electric guitars as in all of 1988. With annual sales approaching $10 million, Hall is trying to figure out how to be prepared for the next musical cycle. He is far from panicked, however. It helps to have a company with one owner, no bank debt, and a factory of its own, which is in Santa Ana, Calif. "We have maximum flexibility," he says. Hall is currently working on a kind of early-warning system for future market swings: a recording studio in his home. "I'll lure musicians inside," he says. "Then I'll pick their brains." -- Joshua Hyatt




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