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Gibson financial problems ?

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Yes, it is.

 

For my two cents worth, I think Gibson would do well to divest itself of everything non-guitar and be again what they once were: a producer of fine musical instruments. Have Nashville continue to build the electric line and Bozeman the acoustics. Scale back production in both facilities to the appropriate level dictated by the market, cut staff and overhead accordingly. Certainly many would be hurt by such measures, but the number one priority of a going concern is to remain "going".........survive to service the people that appreciate and make use of the products produced. Do what has to be done to survive.

Edited by Buc McMaster

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Yes, it is.

 

For my two cents worth, I think Gibson would do well to divest itself of everything non-guitar and be again what they once were: a producer of fine musical instruments. Have Nashville continue to build the electric line and Bozeman the acoustics. Scale back production in both facilities to the appropriate level dictated by the market, cut staff and overhead accordingly. Certainly many would be hurt by such measures, but the number one priority of a going concern is to remain "going".........survive to service the people that appreciate and make use of the products produced. Do what has to be done to survive.

 

Agree, and I will add a complete retooling of corporate attitude to the Gibson dealer network. Start with something very basic ... dealers are not Gibson's adversaries! They know what they can sell, send them what they want to order, in quantities they can handle. If enough dealers don't think they can sell a model, take the hint rather than jam unwanted inventory down their collective throats. Let them advertise like any other dealer.

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Calm down people. This is from Bloomberg today....

 

Gibson Brands, Inc. in Process of Refinancing of Company's Bonds

Feb 15 18

Gibson Brands, Inc. announced that it has met all current obligations to the bondholders, is in the process of arranging a new credit facility to replace the bonds, and fully expects the bonds to be refinanced in the ordinary course of business.

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Gibson Brands, Inc. Key Developments

Gibson Brands, Inc. Hires Benson Woo as Chief Financial Officer, Effective on or Around February 19, 2018

Feb 16 18

Gibson Brands, Inc. announced that Benson Woo will return to the company as Chief Financial Officer on or around February 19, 2018. He spent his early career at General Motors and then moved onto senior financial positions at more entrepreneurial companies.

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Yes, it is.

 

For my two cents worth, I think Gibson would do well to divest itself of everything non-guitar and be again what they once were: a producer of fine musical instruments. Have Nashville continue to build the electric line and Bozeman the acoustics. Scale back production in both facilities to the appropriate level dictated by the market, cut staff and overhead accordingly. Certainly many would be hurt by such measures, but the number one priority of a going concern is to remain "going".........survive to service the people that appreciate and make use of the products produced. Do what has to be done to survive.

 

I think that is the right move, surely.

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No offense, but when some of you armchair entrepreneur's take a business 3 months from bankruptcy and run it for 32 years and it now has annual revenue in excess of a BILLION dollars

 

THEN

 

you would qualify to give Henry financial advice......

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Yes, it is.

 

For my two cents worth, I think Gibson would do well to divest itself of everything non-guitar and be again what they once were: a producer of fine musical instruments. Have Nashville continue to build the electric line and Bozeman the acoustics. Scale back production in both facilities to the appropriate level dictated by the market, cut staff and overhead accordingly. Certainly many would be hurt by such measures, but the number one priority of a going concern is to remain "going".........survive to service the people that appreciate and make use of the products produced. Do what has to be done to survive.

 

I agree with you Buck, but unfortunately, the mindset of Gibson's leadership is that Gibson is no longer a guitar company, it is a consumer audio electronics "lifestyle" company.

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Henry J. did save that company. When Piezo put the Gibson music division up for sale there were no takers. If he had not stepped in we would all probably all be posting about guitars built in China by some company that had simply bought the rights to the Gibson name.

 

Bozeman has always been run almost as an independent shop. It would be interesting if Bozeman went the way of the Doypera Brothers when after years they reacquired the rights to the Dobro name and began building instruments under the OMI moniker.

Edited by zombywoof

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No offense, but when some of you armchair entrepreneur's take a business 3 months from bankruptcy and run it for 32 years and it now has annual revenue in excess of a BILLION dollars

 

THEN

 

you would qualify to give Henry financial advice......

 

You understand that revenue of a billion dollars tells you absolutely nothing about the profitability of the company or how astute its business decisions are, right?

 

The last thing you want is for your shareholders or bondholders to lose confidence in your decisions. Bringing in a CFO with a good track record is a good place to start, but a lot of self-made business owners have trouble with advice that contradicts their own inclinations.

 

Very few companies of this type have a history of perfect decision-making or linear increases in profitability.

 

I wish Gibson and Henry only the best. He saved the Gibson Acoustic brand, and deserves credit for that no matter what.

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No offense, but when some of you armchair entrepreneur's take a business 3 months from bankruptcy and run it for 32 years and it now has annual revenue in excess of a BILLION dollars

 

THEN

 

you would qualify to give Henry financial advice......

Indeed, Henry and his partners did pull the brand from the fire........32 years ago. There have obviously been some bad decisions made along the way or the business wouldn't be in the state it is now in. There is a rule for business (and individuals as well for that matter): you cannot operate beyond your means for long.* A billion dollars in annual revenue means nothing if it's without profitability. The historical longevity of a business has nothing to do with it's continued existence......it's decisions made in the present that make the future viable.

 

*the exception to that rule is the United States government, but only because they can print the money they overspend and even that won't last forever.

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Agree, and I will add a complete retooling of corporate attitude to the Gibson dealer network. Start with something very basic ... dealers are not Gibson's adversaries! They know what they can sell, send them what they want to order, in quantities they can handle. If enough dealers don't think they can sell a model, take the hint rather than jam unwanted inventory down their collective throats. Let them advertise like any other dealer.

Yes, this has stuck in my craw since 2001, when Gibson began acing out dealers and went big box (& online) with GC & MF. A small and local long time Gibson dealer & very vocal supporter of Gibson, from whom I had purchased a number of Henry's instruments, was left in the lurch - along with many other long time dealers across the country, including Elderly. Another large local dealer in my area with four stores, had been carrying Gibsons for thirty years, but also couldn't justify the amount of product Gibson was requiring them to purchase to remain a dealer.

 

And the beat goes on. I just purchased a closeout NOS 2015 J-50 from a dealer who again, could no longer live with Gibson's terms. Martin, Taylor, and Fender seem to be able to work with all these same folks just fine.

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Yes, this has stuck in my craw since 2001, when Gibson began acing out dealers and went big box (& online) with GC & MF. A small and local long time Gibson dealer & very vocal supporter of Gibson, from whom I had purchased a number of Henry's instruments, was left in the lurch - along with many other long time dealers across the country, including Elderly. Another large local dealer in my area with four stores, had been carrying Gibsons for thirty years, but also couldn't justify the amount of product Gibson was requiring them to purchase to remain a dealer.

 

And the beat goes on. I just purchased a closeout NOS 2015 J-50 from a dealer who again, could no longer live with Gibson's terms. Martin, Taylor, and Fender seem to be able to work with all these same folks just fine.

That's Henry's greed.

 

 

 

 

JC

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Seems the greatest detriment to Gibson is this forum, should anybody read it and take it to heart. Gibson has done well in the past, in which these instruments value will continue to climb. My guess is that 90% of the participants here abouts have never known or played a "real Gibson". Depending on my amount of replies to this post will let us know. he he he!

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Seems the greatest detriment to Gibson is this forum, should anybody read it and take it to heart. Gibson has done well in the past, in which these instruments value will continue to climb. My guess is that 90% of the participants here abouts have never known or played a "real Gibson". Depending on my amount of replies to this post will let us know. he he he!

 

What do you mean by "real gibson" ?

 

 

 

 

JC

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I am not sure many of you have actually followed Henry all of these years. Henry is an entrepreneur. And, a successful one. He takes risks! In taking risks, he smartly uses others’ monies. He continually reinvents his holdings to adjust to an ever changing marketplace. All, these things are exactly why creditors keep lending to him and he keeps uncovering new opportunities....and why he has kept the company private and successful all of these years, so he can keep it all entrepreneurial and fluid. And, why he can liquidate certain pieces to keep the engine floored to new endeavors. All of which hedges one risky part against another more stable part. And, why the financial articles can never figure him out, They are used to public companies that do not have the flexibility and entrepreneurship and risk taking appetite that he as the company’s entrepreneurial owner has. Again, I raise that Gibson is the world’s leading mass producing and sales leading guitar company through its Epiphone business, which inexpensively outsources it’s high quality and super profitable guitar products. Gibson’s high priced high quality handmade guitars is a niche business that the Epiphone lines enables, provided Gibson guitars are kinda self supporting. By the high end and expensive Gibson guitar business being kinda self supporting, the more lucrative Epiphone mass producing arm of the company makes a fortune of monies for the over all company by being the exclusive authorized copy maker and seller of good quality inexpensive Gibson knock off guitars at a fraction of a Gibson guitar price and with tons of profit making due to their outsourced mass production and inexpensive good quality products.. Plus, they can hedge the profitable mass market Epiphone and niche market Gibson brand by also being a consumer electronics company if the guitar business slows for awhile. And, all using creditor’s monies and assets that Henry’s entrepreneurship has accumulated over the years.

 

This call to downsize to only Gibson guitars would be the death knell for Gibson. It’s niche is too small in today’s worldwide mass produced guitar marketplace. Gibson guitars exist because of all of the risk hedging Henry has built up since he purchased a dying Gibson and Epiphone brand from Norlin. He’s an entrepreneurial genius.

 

After watching Henry’s business endeavors all these years, these are my takes on what is really going on.

 

QM aka Jazzman Jeff

Edited by QuestionMark

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I am not sure many of you have actually followed Henry all of these years. Henry is an entrepreneur. And, a successful one. He takes risks! In taking risks, he smartly uses others’ monies. He continually reinvents his holdings to adjust to an ever changing marketplace. All, these things are exactly why creditors keep lending to him and he keeps uncovering new opportunities....and why he has kept the company private and successful all of these years, so he can keep it all entrepreneurial and fluid. And, why he can liquidate certain pieces to keep the engine floored to new endeavors. All of which hedges one risky part against another more stable part. And, why the financial articles can never figure him out, They are used to public companies that do not have the flexibility and entrepreneurship and risk taking appetite that he as the company’s entrepreneurial owner has. Again, I raise that Gibson is the world’s leading mass producing and bought guitar company through its Epiphone business, which inexpensively outsources it’s high quality and super profitable guitar products. Gibson’s high priced high quality handmade guitars is a niche business that the Epiphone lines enables, provided Gibson guitars are self supporting. By the high end and expensive Gibson guitar business being self supporting, the more lucrative Epiphone arm of the company makes a fortune for the over all selling company by being the exclusive authorized copy maker and seller of good quality inexpensive Gibson knock off guitars at a fraction of a Gibson guitar price and with tons of profit making due to their outsourced mass production. Plus, they can hedge the profitable mass market Epiphone and niche market Gibson brand by also being a consumer electronics company if the guitar business slows for awhile. And, all using creditor’s monies and assets that Henry’s entrepreneurship has accumulated over the years.

 

This call to downsize to only Gibson guitars would be the death knell for Gibson. Gibson guitars exist because of all of the risk hedging Henry has built up since he purchased a dying Gibson and Epiphone brand from Norlin. He’s an entrepreneurial genius.

 

QM aka Jazzman Jeff

 

QM,

 

Les Paul's haven't been selling that well for the last few years.

A lot of key people have left the company .

Henry isn't as smart as you think he is ... He let valuable people go because he didn't care about them and now Gibson is suffering because of his "I'm in charge attitude".

 

It's no secret that no one at Gibson likes the guy .

He might be a wonderful business man but his arrogance is driving the company to extinction!

 

I talked to a guy from the electric division who told that since 2015 they have had trouble moving stuff and a lot of it has been sitting in warehouses.

 

Henry is out of touch with what the company needs and should just let go of the brand altogether and let someone who genuinely wants to carry the Gibson name on in the future do it.

 

 

Henry J has no idea how to turn this around

 

 

JC

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His people skills is a different subject.

 

Regarding the mess you’ve referenced, what mess? There is no actual indication there is a mess except an article speculating. Henry knows exactly what he is doing and created. And, despite the article’s BK speculation, any creditor who has any brains knows it’s in their best interests to continue working with Gibson by renewing their loans with assets being sold to reduce their debt upon their sale and profits continuing to come in. Plus, the recent corporate tax change to 21%, means more profits and more of a cash flow to produce further loan paydowns, provided the company keeps operating. Creditors forcing a BK would only hurt them. They are better off continuing to work with Henry.

 

Henry’s eventual exit plan? Go public and raise tons of cash or sell to one of this foreign Epiphone partners in China who have tons of monies. But, for now he still seems to be Henry the entrepreneur doing his thing to expand and hedge the company’s risk by diversifying into the electronics business through building the Phillips leg of the company., which in the long run may make the entire company more saleable.

 

Just my thoughts.

 

QM aka Jazzman Jeff

Ps. Another string should be started about his people skills, if you want to go there.

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