In a shocking, but not totally unexpected move, Gibson, one of the premier guitar-manufacturers in the history of recorded music, has filed for bankruptcy protection. Many hoped that the 116-year old company who’s known the world over for their iconic Les Paul, SG, and ES-series lineups might be able to avoid this fate somehow and work out new terms with their creditors, but unfortunately, that doesn’t seem to be the case.
“Over the past 12 months, we have made substantial strides through an operational restructuring. We have sold non-core brands, increased earnings, and reduced working capital demands,” Gibson’s CEO Henry Juszkiewicz said in a statement. ” 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.”
The non-core brands essentially means everything outside of their line of guitars, including the home audio business that Gibson acquired from Phillips back in 2014 to the tune of $135 million. The company remains hopeful that they can re-emerge from bankruptcy intact, but with reported debts of between $100 million and $500 million on the books owed to numerous different creditors, it remains to be seen whether they will be able to pull it off.
That being said, the Gibson name might be their most valuable asset, which Juszkiewicz, who own’s a sizable share of the company also realizes. “The Gibson name is synonymous with quality and today’s actions will allow future generations to experience the unrivaled sound, design and craftsmanship that our employees put into each Gibson product,” he said.
