Bax seems to be back.
For places like GAK and PMT with physical shops mostly making their £ selling mass produced new instruments then they can't compete on price with big online only shops for price, so what's their selling point? Even if people want to test the instruments, they can just do that in the shop then buy online elsewhere. And even that isn't really necessary as all online sales can be returned for refund within a month. I don't think they've adapted with the times with internet, return laws, big automated warehouses, cheap delivery.
We've seen it with shops like Our Price and HMV going under while shops like Rough Trade have expanded. They do in shop signings/gigs, have cafes, have fairly obscure vinyl and merchandise that can be tricky to get online.
Personally I'd try and do similar with an instrument shop - don't compete directly with online shops for shifting mass produced boxes, put some effort in to offer alternatives: In shop demos, talks from musicians and manufacturers, small gigs, product launches, lessons, good part exchange deals, second hand, servicing, in shop experts happy to help, equipment rental, practice spaces, cafe/bar, boutique brands and custom stuff. Incentives like 'buy here and get a free lesson on how to use your new keyboard/set-up your bass/pair your mixer with your Laptop' etc. really make it a 'go to' hub for musicians. I think places like PMT have dropped the ball on this.