Nashville Post:
“Gibson Brands, Inc. today announced that the company made a $16.6 million coupon payment to holders of its $375 million, 8.875% senior secured notes due 2018.”
That simple statement issued a week ago — at all of 26 words, it’s less than a quarter the length of Gibson’s boilerplate company description that accompanied it — suggests a business-as-usual tone of a company taking care of its contractual commitments.
But the situation facing the iconic Nashville-based music instrument maker, which has annual revenues of more than $1 billion, is far from normal: CFO Bill Lawrence recently left the company after less than a year on the job and just six months before $375 million of senior secured notes will mature. On top of that, another $145 million in bank loans will come due immediately if those notes, issued in 2013, are not refinanced by July 23.
Reading through all of this, things do indeed look dire. But I can’t imagine the Gibson brand going away. I’d be more concerned with new hands coming in to run the company and changing a process which produces some of the finest guitars in the world, diluting a brand synonymous with guitar craft.
Damn.
[H/T Josh Centers]
Purely managed, too diverse (Avid, Onkyo, Epiphone), too expensive and too custom.
You could run the company. They need to do these things.
They make too many $5K guitars that no one wants. I used to know people who could actually buy a Les Paul.
Hemingway wrote about bankruptcy in, “The Sun Also Rises.”
“Two ways,” Mike said. “Gradually and then suddenly.”
Steve Jobs reincarnated?
It’s hard to consider them an “instrument maker” when they seem more invested in their TEAC, Tascam, and Onkyo brands. They skipped NAMM this year to go to CES instead (https://www.gearnews.com/gibson-snubbing-namm-show-2018-strategic-choice-financial-one/). They are a consumer electronics company. Hopefully the Gibson and Epiphone brands will get purchased by someone interested in focusing on returning to being an instrument maker.
I’m pretty sure they don’t own Avid.
Epiphone is, surprisingly, no problem. Once they got away from forcing it to be the crappy import facsimiles of their “normal” line, the Epi brand has really stood out. Their quality control has actually been putting the Gibson line to shame. But I can’t for the life of me figure out why Gibson thought it a smart move to be the parent company of Phillips, Onkyo, Tuscan, etc. (and SSteve is correct, they don’t own Avid). They’ve gone from being a musical instrument company to a company that only still makes musical instruments so wealthy lawyers & tax accountants who can play maybe two or three Beatles songs from the White Album era can hang them on the wall in their office to gather dust. Guitars aren’t supposed to be status symbols; guitars are incredibly basic & primal tools of musical expression, and Gibson was one of the forerunners of that entire endeavor. Robotuners? Quality control that makes the import knock-offs look better made? Not to mention some of the ugliest instruments I’ve ever seen… like the recent “shaggin’ wagon” color scheme? I swear, the first time I saw those things, I threw up in my mouth a little. Seriously. I legitimately threw up in my mouth.
Another thing: has anyone noticed the massive influx of used Gibsons on the market from model years 2015 and newer? That right there is telling of the disaster going on in Nashville.
I have to wonder how top-heavy and insular Gibson management is, that they can’t see the points you’re making.
Or are they simply getting terrible advice from a private equity group that’s hoping to sell the company for parts?
Avid is owned by Gibson Brands, parent company of Gibson Guitars.
See above comment
Another thing to remember regarding Gibson. This is not the first time that they have faced his kind of turmoil. The current ownership group grew out of the company that purchased Gibson to prevent it from going other back in the eighties.
It’s just hard to make expensive guitars in a semi-0handmade way, at a price that people can afford.
Add to it the fact that they have cut corners (like everyone else) to contain costs and you have a real problem (plastic nuts on $5k guitars.
Also, the guitar is not the featured instrument in most modern pop. Fewer players means fewer buyers. Add to that the idea that asian guitar builders make many choices and styles for significantly less money.
I had an SG that I loved. I sold it. I could not afford to replace it now.
Are you sure? I don’t see that on Gibson’s website, Avid’s website, or Wikipedia.
Gibson owns the following subsidiaries: Epiphone, Cakewalk, TEAC, Slingerland, Kramer Guitars, Baldwin Pianos, Garrison Guitars, Gibson Innovations, Gibson Audio, Gibson Labs, Harmony Central, Deutsche Wurlitzer Gmbh, Baldwin Dongbei Piano Instrument Company, The Stanton Group, Onkyo, and Gibson Guitars. Not Avid. Avid is its own entity entirely.
I have an Epiphone Jack Casady bass that I bought new in 2012 and I think it’s a fine instrument.
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