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Fernandes Guitars Files for Bankruptcy

Xpensive Wino

Xpensive Wino

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The iconic Japanese guitar company, founded in 1969, is known for instruments played by Genesis' Steve Hackett, Kirk Hammett, Robert Fripp, and others ceased operations on July 11. The company posted a notice at its headquarters stating: "We are currently burdened with a considerable amount of debt to multiple creditors, and unfortunately, we are unable to continue our business."

in recent years, the company's performance has deteriorated due to the emergence of the second-hand market and intensifying competition. The company attempted to make a comeback by creating a catalog and releasing new products, but in the January 2022 period, sales fell to 166.08 million yen and the company recorded a final deficit of 24.14 million yen. Furthermore, Osaka Fernandes was ordered to start bankruptcy proceedings by the Osaka District Court on April 26, 2023, due to sluggish sales and other factors. As the company's credit also declined, its cash flow reached its limit and it became difficult to continue its business.


 
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zacknorton

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That sucks.

but there's no way that a recently emerging second hand market was a contributing factor.
 
Xpensive Wino

Xpensive Wino

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latestarter said:
Always sad to hear. I love my Fernandes Sustainer.
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Fernandes didn't actually build guitars. I wonder who made the Sustainer for them.

Early manufacturing was done by Kawai Gakki who had guitar building experience from their acquisition of Teisco in 1967. Other major Japanese manufacturers have built guitars for Fernandes under original equipment manufacturer (OEM) arrangements, including Matsumoku, Dyna Gakki, and Tōkai Gakki.

Since the late 1980s, lower-spec guitars were built in Korea, and more recently China.

The growing second-hand market and intensifying competition adversely affected sales, and the company reported debts of 434 million yen for the year ending January 2024. On 11 July 2024, Fernandes ceased operations and filed for bankruptcy.

Fernandes Guitars - Wikipedia

en.wikipedia.org en.wikipedia.org

List of Japanese OEM guitar manufacturers - Wikipedia

en.wikipedia.org en.wikipedia.org
 
Xpensive Wino

Xpensive Wino

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zacknorton said:
That sucks.

but there's no way that a recently emerging second hand market was a contributing factor.
Click to expand...
Rising component and shipping costs might be felt immediately in the bottom lines of guitar makers, but it takes longer for the increased prices to filter through to the used market.

What’s more, we know that when times are tight, some musicians will have to sell more instruments and buy fewer of them. This puts a downward pressure on prices, somewhat counteracting the inflationary effect.

We asked Reverb.com to compare used sale price changes versus new prices, and it makes for interesting reading. Their price tracking data notes year-over-year increases of around 19% in the price of new Gibson Custom Shop Les Paul Standards and 9% in the USA Standards. In contrast, the used equivalents rose by 4% and 0%.

It’s a similar story when you look at Fender. For example, Reverb’s data shows a new Custom Shop Telecaster increased in price by 20% more than the average price paid for a used equivalent.

As noted previously, the higher-end guitar sales have continued to hold up well in the second-hand market, too.

“Compared to 2019, Reverb is now selling around 50% more used electric guitars over $1,400,” notes Cyril Nigg, Reverb's Senior Director of Analytics.

“And we've seen continued strong demand as the value of higher-end instruments has steadily increased. While these guitars aren't cheap, buying them used offers great value for the money.”


www.guitarworld.com

“The higher end the guitar, the more robust the demand is”: Why are guitars getting more expensive? We spoke to the world’s biggest guitar companies to find out

From $50k acoustics to eye-watering ‘premium offshore’ prices, the cost of big-name new guitars has felt like it’s spiraling. So how did we get here? And how do we get out of it?
www.guitarworld.com www.guitarworld.com
 
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OKHopkins

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Much of the manufacturing I understand was happening in countries other than Japan in the last handful of years. I have a Japanese Burny LP Custom and my cousin bought a John Sykes model in the early 2000's made in Korea I believe, the difference was night and day. The Korean Burny felt like a toy relatively speaking. I think Wino is correct combined with the super swamped used market.
 
Xpensive Wino

Xpensive Wino

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OKHopkins said:
Much of the manufacturing I understand was happening in countries other than Japan in the last handful of years. I have a Japanese Burny LP Custom and my cousin bought a John Sykes model in the early 2000's made in Korea I believe, the difference was night and day. The Korean Burny felt like a toy relatively speaking. I think Wino is correct combined with the super swamped used market.
Click to expand...


Can confirm. I've never owned a Japan-made Les Paul copy, but my best Strat is a "1954" MIJ made in the old FujiGen Gakki factory when Fender had no US manufacturing facilities. I've bought many others made elsewhere (including USA & Mexican reissues) over the years and ended up flipping 'em, because they weren't as good.

Later ones from Korea, Indonesia, China, etc. can be a bit of a dog's breakfast.

Some further details here: https://stringjoy.com/cij-fenders-vs-mij/
 
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