If the sagging housing market and high gas prices have Americans singing the blues, they're turning to Musician's Friend for accompaniment.

If the sagging housing market and high gas prices have Americans singing the blues, they're turning to Musician's Friend for accompaniment.

Internet Retailer ranked Musician's Friend first among all Web sites selling specialty products (based on 2007 sales), moving the Medford retailer up from second the previous year. Musician's Friend jumped nine spots to No. 39 among all Web merchants ranked by Internet Retailer. Musician's Friend reported sales of $470.4 million in 2007, a 20.1 percent gain over its $391.7 million 2006 sales.

"We've had 25 years of great execution by our people," said Chief Operations Officer Craig Johnson. "First with our print catalogs and now as the premier online music gear retailer. You just don't wake up one day and find you are ranked 39th; there was a lot of journey to get where we're at."

Chicago-based Internet Retailer reported the specialty and non-apparel category grew 47 percent during 2007, the highest growth rate among the 14 categories it tracks. Web sales accounted for 21 percent of the company's $2.25 billion sales in 2007, up from 12 percent in 2006.

Amazon.com led Web sales with $14.8 billion in online sales, while Musician's Friend was bracketed by No. 38 BarnesandNoble.com and Cabala's Inc.

Musician's Friend acquires revenue via a series of Web sites, including GuitarCenter.com, Music123.com.and WWBW.com, with business also generated through more than 10 million catalogs.

Johnson credits the company's ability to target customers through their musical progression, providing different resources for demographically varied customers.

"Each site targets different age groups and presents unique value propositions of those different lifestyles and age groups," Johnson said. "You take a young child learning to play a saxophone or something like that. Our Woodwind & Brass targets that with band and orchestra instruments. When kids decide it's cooler to play electric guitar or a saxophone, we have something for them."

About 220 people work at the headquarters on Chevy Way in Medford, Johnson said, with 400 staffing the Salt Lake City contact center, 500 at the Kansas City, Mo., warehouse and distribution center and 150 at Windwood & Brass in Elkhart, Ind.

Musician's Friend markets more than 45,000 products while its Web site offers in-depth buying guides, tech tips, videos, expert gear reviews, artist interviews and more than 135,000 product reviews and ratings written by customers.

The company was founded in 1983 by Rob and Deanna Eastman in Eagle Point. It was purchased by Guitar Center for $50 million in 1999 as part of a plan to expand its Internet presence. In turn, private equity firm Bain Capital Partners LLC acquired Guitar Center in 2007 for $2.1 billion. Boston-based Bain Capital has about $50 billion in assets under management and has invested in or bought more than 240 companies, including AMC Entertainment, Burger King, Domino's Pizza, DoubleClick, Michael's Stores, Sealy, The Sports Authority, Toys R Us and Warner Music Group.

Harry and David Holdings, with headquarters on South Pacific Highway, was ranked No. 80, down five spots from last year. Harry and David Web sales grew 6.2 percent in fiscal 2007 while overall revenue grew 7 percent. Harry and David sales improved to $176.8 million from $166.4 million in fiscal 2006. Web sales accounted for 46 percent of Harry and David's direct marketing revenue of $384.4 million. In fiscal 2006, the company's Internet sales accounted for 45 percent of its $369.8 million direct sales.

Reach reporter Greg Stiles at 776-4463 or e-mail business@mailtribune.com.