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Guitar Center Files for Bankruptcy

Guitar Center Files for Bankruptcy

11/23/2020 6:53:00 PM

Guitar Center Files for Bankruptcy

As expected, Guitar Center, the largest musical-instrument retailer in the U.S. and a mecca for musicians, filed for bankruptcy protection late Saturday night, according to the New York Times. The …

, the largest musical-instrument retailer in the U.S. and a mecca for musicians, filed for bankruptcy protection late Saturday night, according to the New York Times. The company, which missed a $45 million bond-interest payment last month, has around $1.3 billion in debt and has been deeply impacted by the coronavirus pandemic.

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The company entered Chapter 11 restructuring proceedings in the U.S. Bankruptcy Court of the Eastern District of Virginia, and said in an announcement that it will continue to pay its vendors and employees in full. It said it has reached an agreement with creditors on a plan that would reduce its debt by $800 million, and has secured new financing. Those investors include its current owner, private equity firm Ares Management Corporation, along with funds managed by Brigade Capital Management the Carlyle Group.

The company said it expects to emerge from bankruptcy by the end of the year.“This is an important and positive step in our process to significantly reduce our debt and enhance our ability to reinvest in our business to support long-term growth,” CEO Ron Japinga said in a statement. headtopics.com

While many musical-instrument retailers have seen strong online sales since lockdown began, Guitar Center lacked the e-commerce infrastructure to fully capitalize on those sales and has been outpaced by competitors such as Sweetwater.In 2014, Ares converted its debt from Guitar Center into equity ownership and became controlling shareholder. The Guitar Center generated about $2.3 billion in sales its most recent fiscal year, according to Moody’s.

Read more: Variety »

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What? Shit off. Now where are people going to go to learn ‘Stairway to Heaven’? you don’t get to $1.3B of debt being closed for a few months People don't like guitars anymore This one hurts. I grew up going to Guitar Center with my father (who is a DJ) and learning everything when it comes to sound equipment.