It brings us no joy to share the news that Guitar Center is planning on filing bankruptcy.
A few years back, we brought you the news of Guitar Center’s financial woes, and it appears that the Covid-19 pandemic was too much for the debt-laden music gear retail giant to bear.
According to the company, they have reached a structuring agreement with key stakeholders that includes debt reduction by nearly $800 million, and are expected to file voluntary petitions for reorganization following Chapter 11 in the U.S. bankruptcy court.
“The retailer signed the Restructuring Support Agreement (RSA) with its equity sponsor, a fund managed by private equity firm Ares Management LP, new investors Brigade Capital Management and a fund managed by Carlyle Group, as well as supermajorities of its noteholder groups.”Fox Business reporter Aushwarya Nair
And then earlier today, Guitar Center sent out the following to their email list:
Chapter 11 bankruptcy is not a “liquidation” bankruptcy, it’s a “reorganization” bankruptcy – so although it’s unclear exactly what form that will take, I wouldn’t hold your breath for a big blowout sale just yet.
All this to say that there are going to be some serious changes made in Guitar Center‘s future, and some of them might not be looking good. We’ll keep the news coming as we hear more.
Looks like you might be doing most of your holiday gear shopping at Sweetwater instead this year…