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CHICAGO-Officials from the Westlake Village, CA-based Guitar Center outlined four store formats poised for growth during a presentation Tuesday at William Blair & Co.’s 25th Annual Growth Stock Conference here. Marty Albertson, chairman and CEO of the retailer of guitars and other musical instruments, detailed expectations for the company’s two existing Guitar Center formats, a third format now in the testing stage, and the expansion of Music & Arts, a Maryland-based chain that Guitar Center acquired in April.

The Guitar Center today operates a large-format store of 17,000-sf and a second format of 10,000 sf, with a third, 5,000-sf format in the testing stage. The Guitar Center stores specialize in serving professional and aspiring professional musicians, along with hobbyists, while the Music & Arts chain focuses on beginning musicians including school band members. Albertson told the gathering that his company expects to expand the 17,000-sf stores, which are located for the most part in markets of 900,000 population or larger, from the current count of 112 to about 160. The company also expects to expand the 10,000-sf stores to 160 locations from the current 36, focusing on communities of about 250,000 population. What happens with the new, 5,000-sf format, which is targeted to communities of about 100,000 population, will depend on how the testing goes, he indicated. Based on Albertson’s remarks, the Music & Arts stores have the potential for the highest number of new stores. “Our target for growth in this division is north of 450 stores,” the Guitar Center CEO said.

Albertson explained that the growth potential in the Music & Arts chain arises from the huge number of musical instrument stores in the US that are already serving the beginning and school band market. “There are about 7,800 mom-and-pop musical instrument store fronts in America,” he said. “The overwhelming majority of them got started in the 50s and 60s, and the majority of those owners are looking for exit strategies.” The Guitar Center’s growth in its Music & Arts division “will be predominantly through a roll-up strategy” of acquiring existing stores and consolidating them under the Music & Arts name, he said.

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