Instrument superstore Guitar Center has officially filed for Chapter 11 bankruptcy.
However, it does not mean the end of the store.
According to the company, the financial move will allow business operations to “continue uninterrupted” as the filing injects “$165 Million in new equity investments” to “recapitalize the company.”
The move will also reduce the store’s debt, currently totaled at nearly $800 million.
“Today we announced a very important and positive step forward to ensure the long-term financial strength of Guitar Center,” CEO Ron Japinga said via press release. “This agreement will allow us to significantly reduce our debt and reinvest in our business in order to better serve our customers and deliver on our mission of putting more music in the world. With ten consecutive quarters of growth prior to the impact from COVID-19, we have been pleased with our resilient financial performance during these challenging times created by the pandemic. As a result of this financial restructuring process, we will be better equipped to execute on and invest in our strategic growth initiatives and we will continue delivering through the strength of our brands, availability of our stores, customer-focused associate relationships, innovative music education programs and our expanding digital solutions.”
10 Comments comments associated with this post
JEROME
November 18, 2020 at 10:29 amI would RUN and spend that ALL today (in all seriousness as a CPA). I’ve been burned many times holding worthless gift cards and credit to stores.
Jerry
November 17, 2020 at 7:01 pmI hope my Gift card that I received in September is honored.
Everyone gets a handout!
November 17, 2020 at 4:20 pmDo we run a charity here? First Tips which has been teetering on bankruptcy long before covid, now these guys who have barely hung on for a decade? Where is their go fund me?? Where is that child Mercurio crying about his bad business skills?
Uncle Eb
November 17, 2020 at 3:23 pmIf anything – covid has increased instrument sales to record levels. This is legal maneuvering.
Vince
November 17, 2020 at 3:16 pmI agree with Rubin/David. Bain’s been milking this company for years, now the rank and file execs are seeing their last cash out before they exit the scene. New blood will come in and find nothing left to work with.
Rubin David
November 17, 2020 at 2:05 pm“reduce debt” = cheat suppliers, customers with store credit, landlords and small support businesses such as cleaners, drivers and anyone we owe money – while continuing to keep our full salaried jobs…
louis
November 18, 2020 at 5:02 pmthey’re paying everyone in full in the ordinary course of business – what are you talking about?
David Rubin
November 17, 2020 at 1:10 pmthis has nothing to do with covid
GC has been on the verge for many years.
there is some sanity
November 17, 2020 at 12:10 pmSeriously, pandemic notwithstanding…I’ve been going into Guitar Centers for YEARS and wondering how they can bankroll having that kind of stock in their showroom by selling Johnny Suburb an Epiphone and guitar lessons to learn the riff from ‘Enter Sandman’. I mean, think about it…
Chuck Fina
November 17, 2020 at 12:06 pmChina virus strikes again