Contrary to the well-known narrative of bankruptcies and struggles among some of the country's largest guitar manufacturers, Tom Anderson and other smaller guitar builders around California aren't just surviving, they're thriving.
By producing a small number of electric guitars, focusing on a specialized market and limiting their backlogs, some of these boutique makers -- known as luthiers -- are doing better than ever.
A cacophony of sounds emerged from a warehouse in Newbury Park, Calif. -- the hum of the wood-sanding machines, the hiss of paint sprayers and the occasional bark from two dogs roaming the factory floor.
And then there were the twangs from Anderson's electric guitar playing. The founder and owner of Anderson Guitarworks was testing his instruments one last time before they were shipped to dealers around the world.
"We just had one of our busiest years," Anderson said in a recent interview, as he tuned one of his guitars.
Saddled with heavy debt and a saturated market, longtime giants such as Fender and Gibson have been forced to redefine themselves to maintain sales and relevance. Fender has moved into online ventures such as subscription-based guitar teaching. Nashville, Tenn.-based Gibson, which purchased Philips' audio division four years ago, filed for bankruptcy protection from creditors last year with at least $100 million in debt.
THE INDEPENDENTS
But boutique guitar manufacturers are prospering, said Tim Olsen, founding editor of the Guild of American Luthiers, a nonprofit organization that seeks to educate people on guitar-making. He estimates there are more than 200 independent guitar-makers in California, the largest concentration in the country.
Because they occupy a specialized market that targets high-end buyers, smaller builders haven't been as heavily affected by cultural shifts that have shrunk the prominence of electric guitars, he said.
"People weren't interested in hand-made guitars until the '90s," Olsen said. "Now in the past 10 years, there've been a lot of them. We're seeing a renaissance."
Anderson earned a reputation for making some of the finest electric guitars on the market, with artists such as Keith Richards, Kirk Hammett and Graham Nash all owning one of his namesake guitars.
Amid an industrywide downturn, the company has experienced small but steady growth since its founding in 1984. It produced a record 925 guitars last year, up from 863 in 2016. Anderson would not disclose profits but said the company generates more than $2 million a year in sales and is profitable.
In contrast to mass market guitars, which are mostly made in China and other overseas markets, boutique guitar-makers specialize in higher-quality guitars that are mostly made in Southern California.
Many boutique guitars are meticulously made by hand, some to the exact specifications of a customer. A boutique guitar typically costs $2,500 but can run as high as $6,000, considerably more expensive than many other guitars on the market.
California's ties to guitar-making run deep.
When Leo Fender created the Telecaster -- originally called the Broadcaster -- in 1950 in Fullerton, Calif., everything changed. His guitars helped shape rock 'n' roll, with his instruments evoking the images of legends such as Jimi Hendrix, Eric Clapton and Bruce Springsteen.
His models inspired many of California's boutique makers too, with many of their guitars based on Fender's now-ubiquitous designs.
Fender still makes some of its higher-end guitars in Southern California, but most of the instruments are now made in Mexico and East Asia. Fender's headquarters has been in Scottsdale, Ariz., for more than 20 years.
IDEAL CLIMATE
By the 1970s, lots of high-profile musicians were flocking to Los Angeles toward the record labels, and boutique luthiers were there to serve them. And with dry, consistent weather that keeps wood quality high, California is an ideal spot to make a guitar.
John Suhr, based in Lake Elsinore, operates one of the largest boutique makers in the country. Starting as a two-man operation in 1997, Suhr now employs more than 100 people who work out of a 30,000-square-foot factory.
Suhr declined to disclose financials, but he said the company has enjoyed steady sales growth for years. His most popular guitars sell for $2,500 to $3,000, and most of the buyers are 35 to 45 years old.
Like many of his peers, Suhr keeps costs down by making only what he can sell, rather than stocking large inventories.
"We thought of making guitars to stock for a little while," Suhr said. "But I don't like the idea of guitars sitting in a hot warehouse for a long period of time, and I don't want to run a business guessing what the demand is."
Bill Asher, a guitar-maker for more than 35 years, has a considerably smaller operation in Santa Monica, producing about 80 guitars a year.
Asher works in a 1,500-square-foot shop, and he's the only full-time builder, which keeps his costs low. Like Anderson and Suhr, Asher makes most of his instruments to order.
"It's a very small business, and we all have to wear multiple hats," Asher said.
Asher services a star-studded clientele, with musicians such as Neil Young, Lindsey Buckingham and Ben Harper all using Asher for repairs or buying his instruments.
Many of Asher's guitars list for $3,000 and up, but it isn't uncommon to see some of his glitzier models sell for at least $5,000.
He recently invested $40,000 to buy a Computer Numerical Control Machine, a device that helps make guitar bodies. He expects the machine to help him boost his guitar output to 125 units a year. Annual sales are currently about $300,000 a year.
The competition can be tough for some small guitar-makers.
LsL Instruments in Santa Clarita has been in business since 2008. Though the company makes $450,000 a year in revenue, it is barely profitable, said owner Lance Lerman.
"We're making products here in the United States, in Los Angeles where it's even more expensive, making high-end products and selling them to broke people -- musicians. [That's] some business model," Lerman quipped.
LsL sells about 400 guitars a year, and with a team of 10 people to pay and an expensive rent for his factory, covering costs is a challenge.
"There's no room for OK in this business," Lerman said. "The only way to survive is to make great instruments. ... If we don't do it, somebody else will."
With popular music straying from a guitar-centered sound, fewer teenagers are looking to learn an instrument than 20 years ago, Lerman said.
Like other guitar-makers, Lerman sells instruments to an older audience, and he doubts that the electric guitar will ever reach its 1980s rock-god height, but he's not counting out a comeback yet.
"All it takes is another Jimi Hendrix," he said. "And then everything changes."
SundayMonday Business on 09/23/2018