Guitar Center Is Filing For Bankruptcy

Small businesses have been hit hard during the pandemic, but they're not the only ones suffering. On Tuesday (November 17), Guitar Center CEO Ron Japinga announced that the company was filing for Chapter 11 bankruptcy. The musical instrument retailer and its investors settled on a plan that would reduce debt by $800 million and “best position the company to return to its growth trajectory prior to COVID-19,” read a press release.

The agreement also assures that “all financial obligations to vendors, suppliers, and employees will continue to be paid in full in the normal course,” which means no stores or ecommerce would have to close during the restructuring process.

“Today we announced a very important and positive step forward to ensure the long-term financial strength of Guitar Center,” Japinga said in a statement. “This agreement will allow us to significantly reduce our debt and reinvest in our business in order to better serve our customers and deliver on our mission of putting more music in the world. With ten consecutive quarters of growth prior to the impact from COVID-19, we have been pleased with our resilient financial performance during these challenging times created by the pandemic.”

Though retailers aren't faring well during these times, it's a different story for guitar brands. Fender recently revealed that its seen record sales numbers in 2020, and Gibson, Taylor, and Martin also reported an upswing.

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