pops42 - 3/5/2018 at 05:44 PM
Gibson, facing half billion in debt, lays off custom shop workers
by Thomas Gnau, daytondailynews.com, NCD
2 hours ago
The problems continue at Gibson Guitars, as Standard & Poor’s has downgraded the company and news emerged that Gibson is laying off workers at its custom shop.
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"With multiple maturities looming and operating weakness ongoing, we believe Nashville-based Gibson Brands could default on its debt obligations over the next six months," Standard & Poor’s officials said in a note to clients. "We are lowering our corporate credit rating to ‘CCC-’ from ‘CCC.’"
The negative outlook reflects what S&P Global officials called the "increased likelihood" that a default or restructuring event could occur within the next six months, officials with the rating agency also said.
Also, a Nashville newspaper reported that Gibson has laid off about 15 employees from its Custom Shop, a part of the company dedicated to making scrupulously correct recreations of vintage electric guitars and special one-off orders.
The Nashville Post quoted Gibson Chief Executive Henry Juszkiewicz as saying that the staff cuts are "part of broad initiative throughout the company to prepare for our refinancing."
The company’s total debt outstanding as of Dec. 31, 2017, was $519 million, S&P Global officials said.
Gibson was founded in 1894 and makes electric and acoustic guitars and consumer and professional audio. Juszkiewicz acquired Gibson in 1986 with fellow investors. The company has a portfolio of over 100 brand names.
islalala - 3/5/2018 at 08:41 PM
Hopefully they can restructure and refinance in time. It's certainly a strong brand that should attract investors willing to to turn it around. All the other brands they own are much less familiar to me ( Philips, Epiphone, Kramer, Onkyo, KRK, Stanton, etc. ).
Their CEO and majority shareholder seems to think it's a retail problem. Not sure how true that is, but one model they could look to is Tesla.
Customers visit the retail stores in person to test drive then place a deposit for a build-to-order product. Makes for a very customized experience and saves from a ton of inventory piling up in the lots or in Gibson's case on the racks.
wearly89 - 3/6/2018 at 02:23 AM
I absolutely love my Epiphone Masterbuilt! Best money I've ever spent. Different guitars are better suited for different people but I had a guy set up my guitar in a very unique manner and it is just perfect for me. Plus, I had a small problem with one of the pickups when I bought the guitar but Gibson went to the matt to make sure I was satisfied with my purchase. Go get ya one! You won't believe what a great guitar $600 can buy you.
God save the Gibson brand and brands!
emr - 3/6/2018 at 04:48 PM
As Madonna sang: “we are living in an IKEA world...”