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merciful-evans

GC facing bankruptcy?

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Just pulled this from another forum:

https://www.nytimes.com/2020/10/23/business/guitar-center-is-preparing-for-a-possible-bankruptcy-filing.html

According to a report in the New York Times, the US Guitar Center retail chain is once again facing bankruptcy, with the possibility that it will file for protection as early as next month.

The company, which is reported to have missed a $45 million interest payment in October, leaving it with a 30 day 'grace period that could end in default...' is no stranger to financial difficulties. In January 2018 USA Today claimed it had about 18 months to refinance more than $900 million in debt scheduled to mature in 2019. 

Earlier this year, having missed an interest payment, GC agreed a 'distressed debt exchange' resulting in rating agency Moody's downgrading it yet again, saying: 'The CFR, PDR and unsecured notes downgrades reflect the increased probability of a debt restructuring due to the capital markets disruption caused by the coronavirus outbreak, as well as expected significant earnings declines in 2020 due to temporary store closures and declines in discretionary consumer spending. In Moody's view these factors, together with the company's high leverage and approaching 2021 secured notes maturity, raise the company's probability of default'.

While the immediate concern will be the fate of Guitar Center's nearly 300 stores and its employees, industry observers have called attention to the potentially devastating effect a bankruptcy could have on the MI industry as a whole if manufacturers, already suffering due to the effects of the global pandemic, suffered significant losses. 

Overall, Guitar Center is reported to be carrying a total debt of $1.3 billion. While it might be tempting to attribute its problems to the difficulties faced by all 'bricks and mortar' stores in recent years - and the intensification of those problems during lockdown - the company's precarious position cannot have been helped by the huge debts incurred from a highly leveraged buyout by Bain Capital in 2007, which left it with a reported $1.6 billion debt. Although the eventual takeover of the lead role in the company's ownership by Ares Management in 2014 reduced its debt by a reported £500 million and its interest payment by a claimed $70 million a year (see pitchbook.com) industry insiders say that however well a musical instrument retail chain performs, servicing, let alone repaying, a debt of that magnitude looks like a Herculean task.

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I want to say I won’t miss them when they’re gone but there are a few nice GCs like the Hollywood one and one I went to in Boston.

 

If they go out of business I will be interested to see what they do with all of their stock 

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Without getting into the extensive details, I personally would not want to see them go belly up. I get other things there for great deals that isn’t guitar related such as pro audio and keyboard stuff. But that debt they have is astounding! A billion dollars plus can get a TON of MI gear and the way things are today, it would take some guts to bet they are gonna pull through IMHO. 

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They will most likely unburden themselves of Debt & Parts of their Business model that have not been profitable. More than likely replace their CEO & Re-Structure.....

Sound familiar? It should.......

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1 hour ago, Larsongs said:

They will most likely unburden themselves of Debt & Parts of their Business model that have not been profitable. More than likely replace their CEO & Re-Structure.....

Sound familiar? It should.......

What company did that?

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16 minutes ago, Fish Crumpet said:

Perhaps they'll go back to being the single corner shop I remember on Sunset Boulevard — although that won't restore the countless  small shops that went out of business as a result of GC's misguided expansion.

They once had a store in Sherman Oaks (near their current location on Ventura Boulevard) staffed by knowledgeable musicians who knew you by name. Now their stores are staffed by twelve-year-olds who rush to your side as you enter, breathlessly mouthing phrases from corporate cue cards.

 

And lock up any acoustic guitar over 1k. I love asking the 20 year old (and have fun guessing their gender) helpful associate to unlock the guitar for that I could afford 5 times over. Do I look like the guy who is coming in here to play Stairway at 54 years old?

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Just now, Fish Crumpet said:

Gibson?

Get the fuk out. The brand that says only one of theirs is good enough?

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9 minutes ago, Fish Crumpet said:

Yes. My newest Les Paul is good enough. Only that.

Can I have the 345 I sold in 1964? Please?

The best Gibson I ever had was my BB King. When the Top Dogs at Gibson made Mark Agnessi their talking puppet, and made him make that uncomfortable video claiming they were going to come after everyone and sue all the guitar makers for putting strings on guitars, because they came up with strings on guitars first, I had enough and took my BB King and traded it for a CFM 000-28.

Edited by Sgt. Pepper

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2 hours ago, Mr. Gibson said:

Everything will be bought online in time,no more stores.

Sex too?

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2 hours ago, Fish Crumpet said:

Sex workers — sorry, Libido Technicians — have been doing that for decades. I should know.

Just curious, do any of the johns ever tip you? 😃 

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My local Guitar Center is the exception to the rule, I guess.
Really great employees, and they take great care of me whenever I'm in there. 

This town can support the market that allows a thriving Guitar Center, two larger local guitar shops, one or two mom and pop guitar stores, and a dozen pawn shops that deal in used guitars and gear.   

Many towns can't. 

I take comfort in knowing that I was once morally-bankrupt, and now I'm a paragon of virtue. 

😐
 

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I would really hate to see them go under.  They move a lot of guitars and whenever there is a problem they take care of it.

Worst comes to worst they refund your money.  

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8 minutes ago, Fish Crumpet said:

Nah... That would mean a pay cut.

They wouldn't really be teaching guitar lessons in those little rooms Sherlock. 

 

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I will say this for GC - when they came to my area, they were far superior to the competition (Sam Ash). 

I used to wait literally an hour just to get someone's attention to help me at Sam Ash.   And their guitar setups were terrible.  I remember asking them to leave my guitar tuned down 1/2 step and the guy had no idea what I was talking about.  Looked at me like I was the idiot.  Um ever heard of Jimi Hendrix?  EVH? SRV?  Apparently not. 

The guys at my local GC were nice enough and definitely more knowledgeable than the kids over at S. A.   But I haven't been to either of those in years. I get everything online or go to Alto Music now. 

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13 hours ago, Sgt. Pepper said:

I'm ready for their liquidation sale.

Hmm, maybe I need to visit more often for any sales? Lol. Deb asked me what she can give me for our 41st Anniversary? 

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13 hours ago, Fish Crumpet said:

Yes. My newest Les Paul is good enough. Only that.

Can I have the 345 I sold in 1964? Please?

Even though I have some really great replacements can I have my Mint condition Vintage Sunburst 1959 ES345 that so naively sold back in the mid '90's!!! I'm still crying over that one.. Nothing compares to that one.. Those PAF's sounded so Sweeeeet!

I do like the Hollywood Store but that's about it in So Cal as far as GC's go for me.... I can't stand going to them anymore.. 

Edited by Larsongs

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