charlie brown Posted March 23, 2016 Share Posted March 23, 2016 I suppose it was only a matter of time. And, they've listed their real-estate properties, in Nashville, as well. http://www.tennessean.com/story/news/2015/08/08/gibson-brands-electronics-first-guitars-second/31165805/ CB Link to comment Share on other sites More sharing options...
capmaster Posted March 23, 2016 Share Posted March 23, 2016 The article dates from 8 August 2015. Meanwhile they should have realized it doesn't work as planned. :unsure: Link to comment Share on other sites More sharing options...
charlie brown Posted March 23, 2016 Author Share Posted March 23, 2016 Yeah, and we all know how 2015 went, sales wise, for Gibson! Well, it was just recently brought to My attention. I guess they're still manufacturing in Nashville, but they no longer own the buildings. And, since a LOT of "music" nowadays doesn't even use "instruments," per se, but "sampling," and other electronic/computer applications, their stringed instrument sales are simply not enough, to keep the company afloat! Technology, is always a double edged sword! And, the ever changing landscape of music, is pretty fickle, too! CB Link to comment Share on other sites More sharing options...
daveinspain Posted March 23, 2016 Share Posted March 23, 2016 If Gibson has to deversify and go into other music related areas to keep the guitar manufacturing going I say good on them.., the demanding for guitars is down because of modern day music tendencies, not to mention the average Joe is not going to spend thousands of dollars on a piece of equipment you can't make a living on anymore... Link to comment Share on other sites More sharing options...
charlie brown Posted March 23, 2016 Author Share Posted March 23, 2016 Well, at the rate their prices are going, they'll have to rely on their Epiphone division, to supply the "working musician," and leave the Gibby's to the collectors, millionaire hobbyist's, and "Rock Stars!" Of course, the more moderately priced "Used" Gibson market will benefit, as well. There are simply too many other good, even great, brand alternatives, these days, to rely on that elitist mentality, to move the kinds of numbers, they need to, any longer. I know there will always be a group of folks that "Only A Gibson Is Good Enough," but the rest of us will need to either buy "used," or save a LOT longer, to get one. Don't even get me started, on Fender, and their "American" pricing, for bolt-on, necks, and band saw bodies...OK, maybe computer cut out bodies. Which, in some ways, is even worse, regarding pricing. Ai Ya!!! But, then...Heck, the price of a bar of soap, or box of cereal is ridiculous, too, these days! So...??? CB Link to comment Share on other sites More sharing options...
LPS1976 Posted March 23, 2016 Share Posted March 23, 2016 Yeah, and we all know how 2015 went, sales wise, for Gibson! Well, it was just recently brought to My attention. I guess they're still manufacturing in Nashville, but they no longer own the buildings. And, since a LOT of "music" nowadays doesn't even use "instruments," per se, but "sampling," and other electronic/computer applications, their stringed instrument sales are simply not enough, to keep the company afloat! Technology, is always a double edged sword! And, the ever changing landscape of music, is pretty fickle, too! CB i think expanding their brand to electronics was probably a good move BUT the 2015 models, like you mentioned, hurt them bad. in regards to the sale of property; Gibson has to pay down the debt somehow... http://www.tennessean.com/story/money/industries/music/2016/03/04/gibson-brands-hit-credit-downgrade/81336440/ Link to comment Share on other sites More sharing options...
LPS1976 Posted March 23, 2016 Share Posted March 23, 2016 forgot to mention, this isn't the first time Gibson has sold property. either last year or the year before; they sold the property for the USA plant and the Custom Shop. they now lease these buildings. Link to comment Share on other sites More sharing options...
rct Posted March 23, 2016 Share Posted March 23, 2016 forgot to mention, this isn't the first time Gibson has sold property. either last year or the year before; they sold the property for the USA plant and the Custom Shop. they now lease these buildings. Probably trying to trim fixed costs so going public looks better. Then, a few people will get obscenely rich and the company can be left to the whims of "the market". rct Link to comment Share on other sites More sharing options...
Guest Farnsbarns Posted March 23, 2016 Share Posted March 23, 2016 It's fairly common for companies to sell the property they operate from and lease it back while trying to generate revenue for growth through brand aquisition. There are risks related to property management and that's why there's a 'property market'. Gibson aren't a property company, let a land lord worry about that, and maintain it too. I think it's perfectly legitimate for Gibson to do so and I very much doubt it's indicative of any cash flow problems. They made a healthy profit in 2014 reading that, during a period in which they invested a lot in growth by aquisition of complimentary brands on the fringe of their existing market. I'd be interested to see their 2015 reports. I'll say this, they are the very top of the list of "brands I'd like to work for". I like the ethos. I wondered at one point if HJ was working at an exit stratergy but I think now that I was wrong. He seems to be simply protecting the organisarion from a shrinking market by spreading out into a larger, more general market around him. All looks healthy to me. Link to comment Share on other sites More sharing options...
'Scales Posted March 23, 2016 Share Posted March 23, 2016 It would also be interesting to see how the 2016 sales volumes are looking. Quite a few models under $1000, plus the Firebird at just over is pretty enticing, and coming off a slow 2015 hopefully they are winning in the market this year. Link to comment Share on other sites More sharing options...
rct Posted March 23, 2016 Share Posted March 23, 2016 It's fairly common for companies to sell the property they operate from and lease it back while trying to generate revenue for growth through brand aquisition. Most companies in America borrow for growth, counting on the revenue after the acquisition to repay the debt and maybe net 1% for a year or 5. But they probably knew that borrowing was going to cost too much pretty soon, as it turned out with their bond rating. They made a healthy profit in 2014 reading that, They are a privately held corporate citizen, where did you get that information? rct Link to comment Share on other sites More sharing options...
Guest Farnsbarns Posted March 23, 2016 Share Posted March 23, 2016 Most companies in America borrow for growth, counting on the revenue after the acquisition to repay the debt and maybe net 1% for a year or 5. But they probably knew that borrowing was going to cost too much pretty soon, as it turned out with their bond rating. They are a privately held corporate citizen, where did you get that information? rct I should have said earnings really, it's before tax and interest but... The acquisitions have led to an explosion in annual revenue, up to $2.1 billion in 2014, but they also narrowed the company’s earnings margin to 4 percent last year I work in an industry where 2% is exciting. Link to comment Share on other sites More sharing options...
rct Posted March 23, 2016 Share Posted March 23, 2016 I should have said earnings really, it's before tax and interest but... Yes. Big difference. That quote from you goes on to say 4% margin. Changes to the company and they way the do things are done out at the margins, and the phrase "out at" assumes a somewhat larger distance than 4%. In corporate America, no matter what widget you sell, 4% is generally what they do before breakfast. It's a lotta revenue along with a really lotta debt, that's about it. rct Link to comment Share on other sites More sharing options...
'Scales Posted March 23, 2016 Share Posted March 23, 2016 There is some info available for what it's worth http://www.hoovers.com/company-information/cs/revenue-financial.GIBSON_BRANDS_INC.b1826f5356393af3.html Link to comment Share on other sites More sharing options...
LPS1976 Posted March 23, 2016 Share Posted March 23, 2016 It's fairly common for companies to sell the property they operate from and lease it back while trying to generate revenue for growth through brand aquisition. There are risks related to property management and that's why there's a 'property market'. Gibson aren't a property company, let a land lord worry about that, and maintain it too. I think it's perfectly legitimate for Gibson to do so and I very much doubt it's indicative of any cash flow problems. They made a healthy profit in 2014 reading that, during a period in which they invested a lot in growth by aquisition of complimentary brands on the fringe of their existing market. I'd be interested to see their 2015 reports. I'll say this, they are the very top of the list of "brands I'd like to work for". I like the ethos. I wondered at one point if HJ was working at an exit stratergy but I think now that I was wrong. He seems to be simply protecting the organisarion from a shrinking market by spreading out into a larger, more general market around him. All looks healthy to me. yeah, I totally get the generating revenue for growth and brand acquisitions and understand they're not a property company but 98 million in debt seems like a bit of a cash flow problem somewhere. Link to comment Share on other sites More sharing options...
Guest Farnsbarns Posted March 23, 2016 Share Posted March 23, 2016 Yes. Big difference. That quote from you goes on to say 4% margin. Changes to the company and they way the do things are done out at the margins, and the phrase "out at" assumes a somewhat larger distance than 4%. In corporate America, no matter what widget you sell, 4% is generally what they do before breakfast. It's a lotta revenue along with a really lotta debt, that's about it. rct You can't really say that. I mean, you did, but it's wrong. There are plenty of industries which have a very high equity turnover but where the equity very rarely belongs to the comapany turning it over. Take the franchise car dealership, I know the franchise model is strong in the industry there. The manufacturer sells cars via the dealer, the dealer, therefore has a huge turnover but they didn't own equity in the product so they sell a $50000 car and get maybe $1500 from the maufacturer. Take away the overhead and nett is tiny. Link to comment Share on other sites More sharing options...
rct Posted March 23, 2016 Share Posted March 23, 2016 You can't really say that. I mean, you did, but it's wrong. There are plenty of industries which have a very high equity turnover but where the equity very rarely belongs to the comapany turning it over. Take the franchise car dealership, I know the franchise model is strong in the industry there. The manufacturer sells cars via the dealer, the dealer, therefore has a huge turnover but they didn't own equity in the product so they sell a $50000 car and get maybe $1500 from the maufacturer. Take away the overhead and nett is tiny. Yes. Now I'm not sure which end you are talking about. The company making the guitars has debt above their boots in order to keep the company going that sells guitars just enough to keep the debt about at the ankle, but it is above the boots. The companies that sell the guitars made by the above are going to the bank every year in order to pony up a very considerable amount of money just for the privilege of selling those guitars. They too are in debt above their boots, selling just enough to keep themselves at an ankle deep debt load, even though it is above their boots. The problems of our largest retailers here in America are not a secret, though the information is hard to get from privately held entities. Where the big guys go the remaining little guys will follow, unless you live where I do. There are no more little guys. NONE. The consumer, who drives this bus headed for the cliff, is in debt above their boots, but making headway at getting back to their ankles where it should be. Part of that is not going out and getting daddy another 5000 dollar Les Paul for Christmas kids, that's just how it has to be. So we have a maker in the same situation as the seller, who is in the same situation as the buyer, whom we are told holds the key to our economy, which is pretty much writhing around on the floor waiting to be put out of its' own misery. The businesses will all have to wait until the consumer can help dig the businesses out of the holes they have gotten into, which we will do when we get ourselves out of our own holes, which will be when our kids get a decent job and move out of the basement, which from the look of things will be never. None of it is good, slice it and speak it any way you want, it isn't good, not in any way. American Economics 303. rct Link to comment Share on other sites More sharing options...
Guest Farnsbarns Posted March 23, 2016 Share Posted March 23, 2016 I think the reality is the "global downturn" isn't a downturn, it's a snap back towards reality, and I think we have a way to go yet. Link to comment Share on other sites More sharing options...
Karloff Posted March 23, 2016 Share Posted March 23, 2016 Where's Donny when you need him ? Link to comment Share on other sites More sharing options...
rct Posted March 23, 2016 Share Posted March 23, 2016 I think the reality is the "global downturn" isn't a downturn, it's a snap back towards reality, and I think we have a way to go yet. I do not know about Europe. In America it is the consequence of a nearly 88% service economy. You can not grow when the vast vast majority of skilled work is simply service, that is, selling something that someone else made or servicing something that someone else sold. Our service economy continues to grow, it is the way of the future, we have given up on a lot of production and manufacturing on which most or our economic ideas are built, therefore, most of our economic ideas don't and won't work, we need some new ones for this here service economy. Hopefully in two years plus a little I will do something called "retire", with a "pension", two words that the new peoples in this building will have to google for a definition when they are 56 years old. The economy and jobs picture is that bad. rct Link to comment Share on other sites More sharing options...
badbluesplayer Posted March 24, 2016 Share Posted March 24, 2016 Where's Donny when you need him ? Me and Donny both sent Gibson a bill for a million bucks for the advice we gave them last year. They settled with Donny for $350.000 and gave him a bunch of new T series guitars. Link to comment Share on other sites More sharing options...
Cougar Posted March 24, 2016 Share Posted March 24, 2016 ....they invested a lot in growth by aquisition of complimentary brands on the fringe of their existing market.... I'll say. "Over the last five years we made major acquisitions of brands like Cerwin Vega, Onkyo and TEAC. Just last year we acquired the Phillips Home Entertainment division, and more recently Onkyo has acquired the Pioneer Home Entertainment business." Link to comment Share on other sites More sharing options...
Karloff Posted March 24, 2016 Share Posted March 24, 2016 Me and Donny both sent Gibson a bill for a million bucks for the advice we gave them last year. They settled with Donny for $350.000 and gave him a bunch of new T series guitars. lol. Link to comment Share on other sites More sharing options...
american cheez Posted March 24, 2016 Share Posted March 24, 2016 Don't even get me started, on Fender, and their "American" pricing, for bolt-on, necks, and band saw bodies...OK, maybe computer cut out bodies. Which, in some ways, is even worse, regarding pricing. Ai Ya!!! - amen! you are 100% right on this point, at least, that's what i think too. I think the reality is the "global downturn" isn't a downturn, it's a snap back towards reality, and I think we have a way to go yet. well i sure as hell hope your completely wrong about that. the last time i had a job, the calendar said november. best case scenario, if we don't strike over the new contract, i got another month on my butt to look forward to. if that's reality, i'm going back on drugs. Link to comment Share on other sites More sharing options...
'Scales Posted March 26, 2016 Share Posted March 26, 2016 Where's Donny when you need him ? Keepin' busy... Link to comment Share on other sites More sharing options...
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