UPDATE: Legendary Guitar Company Gibson Has Officially Filed For Bankruptcy
ORIGINAL STORY: One of the world’s most popular guitar-makers, Gibson, is reportedly facing bankruptcy after 116 years in business.
According to a report by the Nashville Post, the American company is facing a USD$375 million (AUD$474 million) debt repayment deadline in less than six months’ time, with another USD$145 million (AUD$183 million) in bank loans due to mature soon if they’re not refinanced or repaid by 23rd July.
The company’s CFO, Bill Lawrence, recently left the company after only around six months in the role, but Gibson has maintained it has met all “current obligations” to its creditors, and is working on a new credit facility to replace the debt which will soon be due.
“With the refinancing and the improvement in operating performance from the actions that we are rolling out, we expect the company to be organised for success and growth for years to come,” said CEO Henry Juszkiewicz in a statement.
Gibson’s annual revenue has been shrinking over recent years, while some analysts have blamed the rise of hip hop and electronic music for slower demand for guitars.
According to analytics firm Nielsen, R&B and hip hop now represent 24.5 per cent of all music consumed in the US, while rock accounts for 20.8 per cent.
Gibson first started business in 1902 in Kalamazoo, Michigan, but has been based in Nashville since 1984. The company is best known for its Les Paul guitar, first made by the legendary guitarist of the same name. The company also operates other brands like Epiphone, Dobro, Valley Arts, Kramer and Steinberger.
Gibson reportedly sold a former piano warehouse for USD$6.4 million (AUD$8.1 million) recently, and is believed to be considering selling another property as its debts pile up.
