Iconic guitar brand Gibson have filed for bankruptcy.
The company produce the iconic Les Paul and SG lines, and are favourites of players from Jimmy Page, to Slash, to Carlos Santana, James Dean Bradfield and beyond. They were founded over 100 years ago, in Michigan U.S.A, and sell over 170,000 guitars a year in more than 80 countries.
Now, after reports of the business being in trouble emerged back in February, Gibson Brands Inc have filed for bankruptcy protection – with lenders taking control of the company. The process of liquidation has begun, in order to deal with their problems with debt and their struggling ‘Innovations’ division which deals in home electronics such as headphones and speakers. It is hoped that the measures will return the guitar business to profit.
“The decision to re-focus on our core business, musical instruments, combined with the significant support from our noteholders, we believe will assure the company’s long-term stability and financial health,” said Henry Juszkiewicz, Gibson chairman and CEO.
He added: “The brand name and company’s reputation for making guitars is tarnished, but not dead by any means, and it’s very much capable of being resuscitated.”
Back in February, the Nashville Post reported, “the situation facing the iconic Nashville-based music instrument maker, which has annual revenues of more than $1 billion, is far from normal. CFO Bill Lawrence recently left the company after less than a year on the job and just six months before $375 million of senior secured notes will mature… On top of that, another $145 million in bank loans will come due immediately if those notes, issued in 2013, are not refinanced by July 23rd.
Responding to the news, Gibson Brands CEO Henry Juszkiewicz outlined their plans to the Nashville Business Journal: “We have been monetizing assets like stock holdings, real property and business segments that could not achieve the level of success we expected. By monetizing these assets, we can reduce debt and generate funds to contribute to business segments that are thriving. It is important to our business to get back to the financial success we had to achieve the best financial terms in the refinancing of our company.”
Townshend smashed his original Les Paul Gold Top Deluxe on stage during The Who’s show at the 15,000-capacity Boston Garden arena in 1976, with its shattered remnants now on display at London’s Victoria & Albert Museum.