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Picking Winners

Thanks in part to the recent popularity of Hawaiian ukulele virtuoso Jake

Shimabukuro — with an assist from pop stars Jason Mraz, Taylor Swift, Bruno Mars and others — the miniature stringed instruments have become a big seller at San Diego-based Bertrand’s Music.

“A couple years ago we were selling five to 10 ukuleles per year,” said co-Vice President Joel Bertrand, whose family-run company operates four stores that sell and rent musical instruments. “We’ve sold about 500 ukuleles in the past year.”

Music product makers and sellers in San Diego County are capitalizing on increasing sales of musical instruments, as national retail sales rose in 2013 for the fourth consecutive year, topping $6.8 billion, according to the Carlsbad-based National Association of Music Merchants.

The organization reports that sales have not returned to levels seen just before the U.S. financial crisis hit in late 2008. But the industry appears to be progressing despite some strong headwinds, including continued financial struggles for the 30-and-

under crowd that constitutes the majority of sales of instruments and accessories.

Other challenges include ever-tightening music budgets at public schools and the tendency of a growing contingent of players to buy used music products through online venues such as eBay and Craigslist.

Changing tastes, however, are giving locally based companies the chance to make and sell a wide array of products — ranging from low-cost ukuleles to pricier, hand-crafted acoustic guitars — to a diverse cast of buyers, led by millennials and baby boomers.

‘String Valley’

The trends are not lost on “String Valley,” the nickname that Jo Marie Diamond, CEO of the San Diego East County Economic Development

Council, uses to denote the presence of two industry leaders with manufacturing headquartered in that region: Taylor Guitars of El Cajon, and Deering Banjo Co. of Spring Valley.

The county is also home to San Diego-based Carvin Corp., a large global maker and distributor of electric guitars, amplifiers and related components.

The music merchants trade group reported that while total shipped units of acoustic and electric guitars dipped slightly, the retail value of those products increased 7 percent in 2013, to $1.07 billion, reflecting rising sales of instruments retailing for more than $1,000.

Acoustic guitars “significantly outpaced” electric guitars in sales, and sales of high-end acoustic guitars — those priced above $1,500 — have risen 39 percent since 2009. Factors include baby boomers nearing retirement now being able to buy higher-quality instruments to replace older ones and the rise of collectors who value the higher-end guitars for their craftsmanship as well as sound quality.

Taylor Guitars officials say those are among factors in that company’s continued sales growth. The privately held company, which employs 350 in San Diego County and 735 worldwide, saw its sales reach $97 million in 2013, up from $92 million the prior year.

Chalise Zolezzi, Taylor’s communications manager, noted that the company recently debuted its new 800 series of acoustic guitars to “rave reviews” at the annual summer trade show in Nashville presented by the music merchants group, which drew 438 exhibitors representing 1,510 brands.

The 800 series — in which most of the guitars have a suggested retail price between $3,500 and $4,500 — includes high-end woods, thinner finishes, redesigned bracings and other elements that the company said have improved the overall sound quality.

At the other end of the spectrum, ukuleles like those sold at Bertrand’s are portable, relatively easy to learn how to play and available in a broad array of price points depending on their craftsmanship — ranging from $40 to $500 and higher.

The uke activity has helped to balance out the less-spectacular sales of some other products at the Bertrand’s stores, which posted about $3.5 million in sales in the past year, amid generally rising sales during the past three years.

Among other keys to business these days are Bertrand’s repair and rental operations, with some instruments available for purchase on a rent-to-own basis to make them more affordable to a larger group of young customers.

Going to School

Also helping in the current climate, Bertrand said, is that the company since its 1983 founding has maintained steady community and school district relationships in San Diego, Poway, San Bernardino and Aliso Viejo.

“We’ve been pretty fortunate in that they haven’t been cutting the school music programs in San Diego and Poway, like they have in some other places nationally,” Bertrand said.

Nationwide, unit shipments of musical instruments to schools — including woodwinds, brasswinds and orchestral strings — declined 5.9 percent in 2013, mirroring a slight decrease in K-12 enrollment, according to the music merchants group. Still, the retail value of shipments to schools rose 1.7 percent in the past year, to more than $630 million.

In addition to the Nashville summer show, which draws 12,500 attendees, the nonprofit National Association of Music Merchants also stages an annual winter show in Anaheim, which in January attracted about 96,000 people to that city’s convention center, making it among the instrument industry’s largest global trade shows.

“The shows have been growing along with the market in the past few years,” said Lora Bodmer, the trade group’s director of public relations and social media. “There seems to be a sense of optimism out there.”

Since 1998, the trade group has operated an onsite visitor attraction at its Carlsbad headquarters, known as the Museum of Making Music. With historic exhibits and other elements supporting its music education efforts, the museum last year greeted an estimated 35,000 visitors.

“That figure’s been growing steadily,” Bodmer said. “Most of the concerts and events held at the museum sell out in advance.”

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