Paul Reed Smith Guitar Company

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Paul Reed Smith Guitar Company

380 Log Canoe Circle
Stevensville, Maryland 21666
U.S.A .
Telephone: (410) 643-9970
Fax: (410) 643-9980
Web site:

Private Company
Incorporated: 1985
Employees: 190
Sales: $19.2 million (2005)
NAIC: 339992 Musical Instrument Manufacturing







Few names are more revered in the guitar world than that of Paul Reed Smith Guitar Company. Known more simply as PRS, the Maryland-based company manufactures what many consider to be among the finest factory-produced electric guitars in the world. Founded in the 1970s by Paul Reed Smith, the company shot to fame after an early guitar model was adopted by musicians such as Al De Miola, Carlos Santana, Peter Frampton, and Ted Nugent. The company opened its own factory in 1985 and has steadily expanded production, including a 100,000-square-foot extension planned for 2007. This expansion comes in part in order to satisfy the surge in export demand for the companys guitar models, which include the Custom 22, Custom 24, and Singlecut models. By 2006, exports accounted for some 70 percent of total company sales, which topped $19 million that year. In 2006, also, PRS successfully challenged the trademark infringement suit brought against it by the Gibson Guitar Company, which claimed that PRSs Singlecut had copied the Gibson Les Paul design. Paul Reed Smith continues to lead the company.


Paul Reed Smith grew up in Bowie, Maryland, the son of a Navy mathematician. Smiths mother also taught math at an elementary school, and Smith himself appeared destined to follow in his parents footsteps, having enrolled as a math major at St. Marys College in 1974. Yet Smith, an avid guitarist, had begun to formulate a different dream for himself. Smith had long enjoyed working with his hands, and had taken numerous shop classes while still in high school. For one of his shop projects, Smith built his first guitar, using the neck from a copy of the famous Hofner Beatle bass. Smith also became interested in guitar repair, and soon found after-school work as a repair tech at a local music shop.

At college, Smith found himself in need of a new guitar but with no money to buy one. Instead, he acquired a pile of wood and convinced his music teacher to allow him to build one for college credit. The resulting guitar so impressed the teacher, also a guitarist, that Reed received an A for the course. That summer, Smith, his brother, and a group of friends set up a shop in the Smith family home and built a number of guitars. The group originally intended to bring the guitars to New York for sale, but were unsuccessful. Instead, Smith returned to college to continue his studies.

Nonetheless, Smith had begun to dream of a career building and repairing guitars. Two events helped convince him to pursue this dream. The first came when he was asked by a repair shop owned by guitar legend Danny Gatton to repair the broken headstock of a Les Paul Junior owned by Aerosmith guitarist Joe Perry. Smith made the repair, which helped him establish a reputation as a repairman of last resort. The second came while attending a concert by Johnny Winter. As Smith told Music Trades: That night Johnny was so on fire that the whole audience was riveted on him. As Im taking all this in, it occurred to me that if I died on the spot, no one would have even noticed; Id made no impact. I decided then that building guitars was my one real chance to make an impact in the world.

Smith dropped out of college in order to play guitar professionally, while continuing to repair and build guitars in a shop set up at his parents home. Smiths career as a guitarist failed to take off, although he did spend some time playing guitar in Root Boy Slims Sex Change Band, a popular D.C. area act that achieved mild success in the late 1970s. However, Smiths repair business flourished, and by 1975, Smith was able to open a dedicated shop in Annapolis. There, his growing reputation for guitar-repair brought him in contact with many of the areas major musicians, and especially hands-on contact with a range of guitars built during the vintage era of the 1950s and early 1960s.

Into the late 1970s, the guitar market had entered somewhat of a crisis phase. The flood of inexpensive imports, largely from Japan, had brought U.S. guitar manufacturers under extreme competitive pressure. If the Japanese guitar factories were then in the process of undergoing a transformationby the 1990s, the Japanese builders were widely recognized as among the finest in the industryguitar quality in the United States was rapidly losing ground. This process had started as early as the 1960s when the industrys major companies, including Fender, Gibson, Gretsch, and others, were snatched up by major corporations, which sacrificed quality standards for profitability.

Smiths exposure to guitars built during the U.S. industrys golden era enabled him to identify the features and factors that made these instruments so highly sought after by musicians. As Smith explained: As a repairman working on every conceivable type of guitar, I became convinced that vintage instruments were desirable, not because they had improved with age, but because they had been built differently from current models. The reason some of the electrics from the fifties and early sixties felt and sounded so good was that a great attention to detail went into the manufacturing process and that the manufacturers had a real sense for the subtle points. I tried to reintroduce these features in my instruments.


In addition to his repair work, Smith had continued building his own guitars, testing out a variety of designs, methods, and features. By the late 1970s, Smith had become convinced of the possibility of building a better guitar, and one that would appeal to a wide range of guitarists. The two great guitar companies, Fender and Gibson, had largely split the guitar-playing world into two camps, each preferring the highly distinctive sound and playing feel of the two companies most popular guitar models. Smith recognized the potential for developing a guitar that would appeal to both camps. I used to notice that top players were forever switching guitars on stage, Smith told Music Trades, Theyd use a Fender Strat for one song and a Les Paul for another. I wanted to create a guitar that was versatile enough so a player could use it for every song.

Over the next several years, Smith began developing the prototypes for his new guitar design. In the meantime, Smith had begun making a name for himself as a guitar builder. For this, Smith had developed the unusual marketing approach of trying to get his guitars in the hands of noted players of the moment. For this, Smith would attempt to hang out backstage at concerts, getting to know the roadies in hopes of convincing them to show his guitars to musicians. Smiths first success came at a Ted Nugent concert in 1976, when the guitarist, then at the height of his career, commissioned Smith to build a guitar for him. At the same time, Smith sold a guitar to Nugents rhythm guitarist, Derek St. Holmes.


Our Mission Statement: Guitar building is an ongoing process of discovery. We are devoted to the guitars rich heritage while committed to new technologies that will enrich our products with uncompromised tone, playability and beauty. Our success depends on our ability to listen, implement positive change and continually refine our craft. Believing this, we strive to build the best guitars and guitar products possible and to serve our employees, customers, suppliers and community with distinction.

Smith completed the guitar, but before delivering it to Nugent, brought it instead to a concert by Peter Frampton, then enjoying the massive success of his Frampton Comes Alive album. Frampton, too, was so impressed by Smiths work that he commissioned a guitar from him, followed by a second commission from Framptons bassist. Part of Smiths success in attracting commissions and receiving payment up front was also based on his policy that if the guitarist did not love the guitar, he would refund 100 percent of the fee. Another commission came from Garry Tallent, bassist with Bruce Springsteen.


Smith next set out to woo one of his guitar-playing idols, Carlos Santana. When Santana came through the Washington, D.C., area, in 1977, Smith succeeded in winning a commission from Al Di Meola, then playing in Santanas support band before emerging as a guitar legend in his own right. By the end of that year, Smith had built less than 20 guitars, but had succeeded in placing many of them in the hands of a number of the worlds top artists of the time.

Smith continued to pursue Santana, while refining his guitar design. At last, in 1980, Smith succeeded in convincing Santana to try out a guitar backstage. Santana was impressed, commissioned Smith to build him another guitar, and then agreed to use the guitar for the concert that night. However, a problem with the guitars pickup, a single-coil that was unsuited for use with Santanas high-gain stage amplifier, forced Santana to switch guitars during the first song.

Smith was able to fix the pickup problem for Santanas guitar, and Santana was impressed by Smiths refund guarantee. Santana was also impressed by the guitar delivered to him by Smith, although remained skeptical, calling the guitar an accident of god. After taking delivery of two more guitars from Smith, Santana became a believer and quickly became synonymous with Paul Reed Smith guitars.

Despite these successes, Smith continued to lead a hand-to-mouth existence. In the early 1980s, desperate to bring his guitar designs, rapidly reaching perfection, to a wider market, Smith began negotiating with a number of manufacturers to license his designs. These negotiations even led to the drawing up of contracts, yet in the end, Smith decided the terms were unsatisfactory. As Smith explained: I was looking for a shortcut to get from being a custom guitar builder to a full-fledged guitar company. Fortunately, the licensing deals never worked out.

Instead, by 1984 Smith became determined to found his own guitar company. Backed by his wife and friends, many of whom emptied their bank accounts to support Smiths ambitions, Smith and a friend took two of his prototype guitars on the road, traveling up and down the East Coast in order to sign up orders for guitar deals. In just two weeks, Smith succeeded in winning some $300,000 worth of orders. These helped Smith win further backing from a venture capitalist. Still short of the money needed to build a factory and launch the company, Smith invested all of his money on a gamble, building six new prototypes and setting up a display at the 1985 NAMM show, the musical instrument industrys most important annual trade convention. At first, Smiths guitars, which were priced significantly higher than even most of the markets high end guitars, went unnoticed. Then Megadeth lead guitar Chris Poland discovered the guitars and began dragging people to Smiths booth. By the end of the convention, Smiths order book was entirely filled, providing enough cash to back the construction of the companys first factory in Annapolis in 1985. In that year, Smith incorporated the company as the Paul Reed Smith Guitar Company.


Paul Reed Smith sets up a guitar repair shop in Annapolis, Maryland, and begins building custom guitars for sale.
Carlos Santana commissions first guitar from Smith.
Smith establishes Paul Reed Smith Guitar Company (PRS) to begin manufacturing guitars on a large scale.
Company moves to new 25,000-square-foot factory on Kent Island.
PRSs new Singlecut model brings trademark infringement lawsuit from Gibson Guitar Company; suit is ultimately decided in PRSs favor.
PRS breaks ground on new 100,000-squarefoot facility.


The company quickly achieved fame throughout the guitar world, becoming more popularly known as PRS and setting a new standard for instrument quality. In fact, PRS was widely credited with stimulating a new era of guitar craftsmanship. By the mid-1980s, quality standards in the guitar manufacturing industry had hit an all-time low. While this stimulated the emergence of a thriving vintage guitar market, the survival of the new guitar market, including both the Fender and Gibson companies, appeared in doubt. By placing the quality threshold at an ever-higher level, PRS forced the other companies to follow suit. As a result, by the late 1990s, the overall level of guitar quality in the world had never been higher.

PRSs continued commitment to increasing its own quality levels in the meantime led the company to develop more and more guitar features. While many of these were invisiblefor example, the company began packing its truss rods with paraffin because it was felt to provide tonally superior resultsothers were more visual. In the early 1990s, the company launched its now famous, and much prized Dragon series, featuring a highly elaborate inlay on the fretboard. The company also became one of the first to use highly figured woods for the tops of its guitars, while developing a rating system for the figuring levels of the woods it used, with guitars priced accordingly.

By the mid-1990s, PRS had established itself as one of the major guitar companies in the world. By then, even though the companys production levels had soared, it struggled to keep up with demand. In 1996, the company moved to a new 25,000-square-foot facility on Kent Island. The new factory also enabled the company to develop a state-of-the-art production process, much of which was designed by the company itself, allowing a number of the steps in the manufacturing process to be accomplished by CNC equipment. In this way, the company combined hands-on craftsman-ship with the consistency of automated production techniques.

PRS attracted a growing list of noted musicians to the ranks of its players, including Jimmy Page, Neil Schon, Trent Reznor, and Ross Childress, among many others. At the same time, the export market became increasingly important to the companys growth. This came in large part after the company hired its former German distributor, Peter Wolf, to serve as international marketing and sales director in 1997. Through Wolf, PRS established a network of more than 43 international distributors. Foreign sales quickly rose from just $1.8 million in 1997 to more than $13.5 million in 2006, accounting for some 70 percent of the companys total sales that year. The company had also successfully expanded its brand with the launch of the lower-priced SE line, manufactured in Korea according to PRS design standards.

PRSs commitment to high-quality standards paid off for the company with surging demand for its U.S.-built guitars. In order to meet this demand, the company launched a multimillion-dollar expansion of its production capacity, breaking ground on a new 100,000-square-foot facility in November 2006.

In that year, also, PRS succeeded in eliminating the sole cloud on its horizon. Following the introduction of its Singlecut model in 2000, so-called because it featured a single cutaway at the neck, instead of the cutaways on both sides of the neck, PRS found itself faced with a lawsuit from the Gibson Guitar Company, which claimed that the Singlecut violated its trademark on the famed Les Paul guitar design. Although Gibson initially won its suit, PRS won its appeal, when the court accepted the argument that despite similarities in design there was no likelihood that customers would mistake a PRS guitar for a Gibson guitar. Gibson attempted to bring that decision to the Supreme Court, but ultimately lost that effort. By then, the Paul Reed Smith Guitar Company had replaced Gibson as the standard in the guitar manufacturing industry of the 21st century.

M. L. Cohen


Yamaha Corporation; Samick Musical Instruments Company Ltd.; Fender Musical Instruments Corp.; Line 6 Inc.; Gibson Guitar Corp.; C.F. Martin and Company Inc.; Taylor-Listug Inc.; Carvin Corp.


Bullish on the High-End Guitar Market, Music Trades, November 2006, p. 28.

Court Rules PRS Singlecut Violates Les Paul Design Patent, Music Trades, May 2004, p. 28.

Creating a New Guitar Classic, Music Trades, October 1989, p. 100.

Dixon, Tyeesha, Local Guitar Maker Triumphs in Court, Baltimore Sun, June 6, 2006.

Dorich, Alan, The Next Level, US Business Review, January 2006, p. 178.

Peter Wolf: The Marketing Virtuoso Who Made Paul Reed Smith Guitars a Truly Global Brand, and His Unique Set of Skills, Music Trades, June 2007, p. 18.

The PRS Book, Guitar Player, April 2000, p. 109.

PRS Guitars: Catalyst for Change, Music Trades, October 2005, p. 110.

Thompson, Art, Paul Reed Smith: Pushing the Limits of Classic Solidbody Design, Guitar Player, March 1995, p. 37. Toto, Christian, Creating a Heavenly Sound, Washington Times, March 16, 2000, p. 4.

Triplett, William, Guitar Heaven, Washingtonian, November 1, 2006.