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Steve Long, son of founder Jack Long, now runs the enterprise. (MOE DOIRON FOR THE GLOBE AND MAIL)
Steve Long, son of founder Jack Long, now runs the enterprise. (MOE DOIRON FOR THE GLOBE AND MAIL)

Long & McQuade CEO on family owned business success Add to ...

Long & McQuade Ltd. is one of Canada’s most successful home-grown retailers. Since 1956, the Ontario company has been selling and renting musical instruments to loyal customers, and it currently has 62 stores in all 10 provinces with annual revenues closing in on $300-million. Steve Long, son of founder Jack Long, now runs the enterprise, which is still family-owned.

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With 62 stores in Canada, how much bigger can you grow?

About 100 stores is the maximum that we could do. We only have two stores in Quebec at this point, so that is a growth area for sure. There are [still] certain parts of Toronto where we know we could put a store and it would do business. We are putting a second store in Ottawa this year and there is probably room for a third.

As a big chain, are you putting smaller independent stores out of business?

Our model has never been to find a city that has three music stores and go in there and try and steal the business from them. We have always gone into smaller markets when somebody has come to us and said, “I want to retire,” or “I want to be part of a bigger company because doing everything on my own is really hard.” Then we have taken them over. There are a lot of independents that have joined up with us, and pretty well all of them are really positive about it.

Are all your stores corporately owned?

Yes. Franchising wouldn’t work, because our business model is different from every other business model. It is almost counter-intuitive.

What is that business model?

We take a very long term view of our customers – a cradle-to-grave thing.

Most people who are musicians, through their whole life they identify as being a musician. [Often] their kids are musicians and their parents are musicians. They might take piano lessons when they are little, then they might be in a school band, then a rock band in high school. They might get an acoustic guitar when they are in their 20s, and when they get older they might become a collector of expensive guitars. We want to interact with them all the way through.

So, very often, we are not really concerned with making the big sale. We want to be the company that, whenever this person needs anything regarding music, he immediately comes to us. Whether he needs a guitar pick or a $4,000 Les Paul [guitar], he comes to us.

How do you make your stores appeal to those regular customers?

One of the things we try to do is have events on at our stores, whether it is somebody playing on a Saturday, or a clinic or something. These aren’t aimed at selling, they are aimed at just getting people to come to the store. It builds up loyalty.

Have there been big changes over the years in what you sell?

One of the areas that has changed the most is home recording. Pricing has come way down. That has hurt us a little bit, because we used to sell $100,000 recording systems, and it did add up to a fair chunk of business. Now you don’t get that any more. You sell a card to go on the customer’s computer, and that might be $200. Then he might buy a couple of microphones.

Are woodwind and brass-band instruments still selling?

It goes up and down in various parts of the country. You’ll get some school board somewhere that has a budget cut, or the person in charge decides that music isn’t really very important, and they will cancel all the band programs.

But there have been enough studies that show that music makes your brain smarter, and a lot of people realize that music is a good part of learning. That hasn’t saved all the band programs, but it has kept enough of them going, and when someone does try to cancel one, people get up in arms and they come back again.

Are aging baby boomers, who used to be in bands, spending a lot on expensive guitars?

That definitely happens. We joke that all guitar players have 12 guitars. That’s because every guitar is different, and once you get them you don’t really want to get rid of them. That creates sort of an endless market.

Are there a lot of low-end instruments made in China?

Sure, instruments are made in China [but] a lot of instruments are made in other countries. We do some manufacturing ourselves here, not instruments, but sound systems.

But often, you are looking at a really long-term life of a product, so price isn’t the main thing. There are many, many people who have had a guitar for 50 years. A lot of times people want to buy a really nice acoustic guitar and keep it for the rest of their life. We really try to stay away from the cheap stuff. If you buy a cheap guitar and the action is not very good and you can’t get it in tune, you’ll get discouraged and quit. I want to feel that I could walk around our store and pick up any instrument and play it.

Your family also owns Yorkville Sound, which makes amps and sound systems in Canada. Has it been hard to compete with foreign-made products?

It depends on the category. We used to make low-end guitar amplifiers but now they are priced at $99 so we don’t make them.

One of our advantages is that we have so much experience with the market. We know what people want. We know what features are important and what are not. Also, rentals give you great feedback. We can just respond really quickly and make changes if they are required.

What portion of your business is made up of rentals?

It is about 11 per cent, although it [contributes] more, because a lot of the time people rent something and then end up buying it. And it generates a lot of used equipment.

Any other big changes in retailing since you started in the business?

One big thing for us has been our in-house financing program. It is very different from most credit card financing, because we do it ourselves so it can be a lot more flexible.

How is it different?

The big credit card companies have very strict rules. If somebody’s payment history isn’t great, they don’t want to deal with them any more.

We know musicians are artsy people, and sometimes they have a different perception of time than the rest of the world. We don’t really have a problem if they are not always on time with their payments. [We know if a customer] has been buying for so many years, and he’s going to be around and he’s going to make his payment.

Is your father, who turned the reins over to you 19 years ago, still involved in the business?

Yes. He is 84, but he comes to work most days. He is very helpful. He is very smart with lots of experience. I think he has enjoyed being able to sit back and look at issues and not have to deal with the day to day things.

Your company is still family-owned. Is that a big advantage?

The nice thing is that we don’t have anybody putting pressure on us.

We don’t have stockholders who are saying “Our shares have to go up,” or “We have to make more profit.” We make the decisions to make the business run well, and we don’t really worry about becoming more profitable. We also own a lot of our real estate and that is helpful.

Have the McQuades been out of the business for a long time?

Yes, since 1963. Jack McQuade, who was my father’s original partner, died in the 1970s. He had kids, and we see them every so often, but they weren’t involved in the business so it is more of a social connection.

What do you play?I’m a bass player, and I play guitar too. I don’t play in an official band right now, although I do gigs here and there. The problem with official bands is that they usually end up playing more than I have time for.

Title

President, Long & McQuade, Pickering, Ont.

Personal

Born in Toronto; 56 years old.

Education

Bachelor commerce, McMaster University, Hamilton.

Career highlights

  • Began working for Long & McQuade full time in 1981.
  • Took over from his father Jack Long as president in 1994.

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