Legendary guitar maker, Gibson, has filed for bankruptcy protection.
Gibson Brands, the makers of rock’s favourite Les Paul, SG and Flying V guitars, has filed for bankruptcy protection citing a “devastating” financial fall after its investments in consumer electronic brands failed to pay off.
The company said in a statement accompanying its chapter 11 bankruptcy filing on Tuesday that it required court protection from creditors to reorganize its business.Aging out?
The turmoil afflicting the maker of guitars favored by Neil Young, Jimmy Page and Slash is a common story across the industry.
Over the past decade, electric guitar sales have plummeted, from about 1.5m sold annually to around 1m. In 2010, sales of acoustic guitars outstripped electric. Some industry analysts thank Taylor Swift for that shift.
Like Gibson, Fender, which had to abandon a public offering in 2012, has struggled under debt. The US’s largest retail guitar supplier, Guitar Center, recently had its corporate credit rating downgraded to junk status by S&P after racking up debts of $1.6bn.
According to Digital Music News, “younger buyers, who once drove the guitar surge, have now shifted towards [EDM], rap, and less guitar-driven indie music – even though interest in music itself has never been higher.”
WTF are Gibson branded "consumer electronic brands". Sounds like something a new age marketing team advanced with the backing of the finance dept. All of who never learned a lick
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ReplyDeleteWilly, it was a brainfart gone horribly wrong by a CEO who couldn't come up with anything better nor accept inevitable market swings.
.. gave my son 1/2 the dough for his Gibson Les Paul
ReplyDeletesame as with his Ovation turtleshell accoustic with a pickup & plug
but this Christmas I gave everyone important
a Gibson thermal undershirt (rage reviews)
and my sweet fiancee struts the black or the grey/green
yes I gave her both.. logo is down low on the right
as fashion wear.. and absolutely slays her music biz associates
one of whom is an iconic Canadian musician
They gnash their teeth that they have nothing like them
but I spotted a basketful at an obscure music shop
in November and started buying different sizes
Classics now, I suppose..
but in the music biz highly recognized
Maybe Martin next year.. who knows..
Will have to start sniffing in more obscure guitar shops
I can't see Gibson folding. The guitar line is too iconic. The creditors in these things tend to have two options. Sell the company as a going concern or work a deal - "take a haircut" - that often involves trading debt for an equity position, usually with management changes. In this case it seems like it was bad judgment on the part of current management that brought Gibson down.
ReplyDeleteThe third option is to burn the place down. Sell the inventory. Lay off the employees. Everybody gets a few cents on the dollar and writes off the rest. That does not sound realistic.
As a musician, it is sad this company will go the way of the Dodo Bird. Hopefully a way will be found. Anyong
ReplyDeleteAnyong, as I mentioned in my previous comment, it's highly unlikely Gibson will "go the way of the Dodo bird."
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