Fender files for IPO Today

[johnhall]

I'm not sure that the IPO will have anything to do with the day to day operations. New management took over, what 2 years ago now? It seems things have been pretty smooth for them more recently as a result of those changes and I would expect more of the same. Some stock changing hands shouldn't matter much.

[Scastles]

If you want some long and tedious reading you can skip through their SEC S-1 Form.

http://www.sec.gov/Archives/edgar/data/ ... 340ds1.htm

[johnallg]

No doubt the PE firm was looking at:

1. Bottom line

2. Whatever el toro poopoo the suits could create to expand #1.

Now, publicly held? I haven't heard yet how much of the company will secure this IPO. But, plan on things continuing in much the same "product" (as opposed to "musical instruments") vein, except more so. Things could get as wacky as they have been at Gibson lately!

Fender factories in China?

[billydlight]

I miss Bill Schultz, certainly he was at the helm for Fenders 2nd Golden Age

[johnhall]

Fender factories in China?

Seems like they've been there, done that. Straight from their S-1:

We rely on our manufacturing facilities in Arizona, California, Connecticut, South Carolina and Mexico, and OEMs in China, India, Indonesia, Japan, South Korea, Taiwan, Thailand and Vietnam to produce our products . . .

I was in China when they opened their factory; it was front page in the Beijing newspaper. If I recall correctly, it mentioned their target RETAIL price for the Strat as $36.

Bear in mind that non-Chinese factory ownership is close to impossible; just like Gibson's, theirs is a "joint venture".

The biggest oddity is the disclosure that their factory in Corona was shutdown for many months due to their paint maker's bankruptcy (Lawrence McFadden). It's hard for me to undertstand why any number of other suppliers couldn't have kept the doors open. Worst case, contract coatings producers are a dime-a-dozen and the nothing-too-special formula is on the MSDS sheet.

[RIC_FACTORY]

Not to mention the fact that both the heads of Fender and Taylor flew out to Philadelphia at the last minute to front McFadden the dough to keep their doors open, only to see them slammed shut forever four months later. I still remember getting the text message about the bankruptcy from the head of McFadden as we were just about to commit to them for our UV coating (luckily we had a few very eager backup suppliers in the wings). Unfortunately for Fender, their "bailout" didn't prevent the temporary cessation of production and subsequent, and very ugly, legal battle that ensued with the company that took ownership of McFadden's paint formulas, Seagrave.

[wmthor]

For fiscal 2011, approximately 59.9% of our gross sales before discounts and allowances were generated from the sale of fretted instruments, 12.1% from guitar amplifiers, 9.1% from percussion and 18.9% from accessories.

What really surprise me when I read the filings was that Accessories made up almost 19% of their sales. That's a lot of strings, straps, cables, etc. I'm willing to bet that the percentage of the Accessories' gross profit was considerably higher than the other categories.