Famous Guitar Maker Gibson Declares Bankruptcy
Famed guitar-maker Gibson filed for bankruptcy protection last week after years of running up debt.
Founded by Orville Gibson in 1902, the company has seen ups and downs over the years. However, its latest troubles may be difficult to overcome in the long run.
A list of famous Gibson players reads like a who’s who of popular music, including such luminaries as Les Paul (for whom one of the company’s most famous models was named), Bob Dylan, Jimmy Page (Led Zeppelin), Slash (Guns N’ Roses), Pete Townshend (The Who), Muddy Waters, T-Bone Walker, Frank Zappa and literally hundreds of others. (And those would just be the famous and notable Gibson players).
Gibson has had several owners, and is now called Gibson Brands, Inc. The latest owner, Henry Juszkiewicz, is something of a controversial figure among Gibson fans. While he’s credited with re-building the company into a powerhouse with over $1 billion in annual sales, Juszkiewicz also took on hundreds of millions of debt, made questionable acquisitions and attempted to modernize the company’s classic models.
One thing that Juszkiewicz should be roundly praised for, though, is his practice of maintaining Made-in-USA production of all Gibson-branded instruments.
The cost of servicing debt, and the company’s slow recovery from the financial crisis, are two big factors leading to its current woes.
However, there is hope: Gibson has already lined up $135 million in debtor-in-possession (DIP) financing. This should help give the company some continuity as it restructures.
Let’s hope Gibson can survive for another 128-odd years at least, and continue to make guitars in the USA.
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