Guitar Center: Biggest musical instrument retailer in the US files for bankruptcy
Retailer has around 300 stores across US
Your support helps us to tell the story
As your White House correspondent, I ask the tough questions and seek the answers that matter.
Your support enables me to be in the room, pressing for transparency and accountability. Without your contributions, we wouldn't have the resources to challenge those in power.
Your donation makes it possible for us to keep doing this important work, keeping you informed every step of the way to the November election
Andrew Feinberg
White House Correspondent
Guitar Center, the biggest musical instrument retailer in the United States, is filing for Chapter 11 bankruptcy amidst ongoing impacts to retail due to the coronavirus pandemic.
Guitar Center and its sister brand Music & Arts attempted to adapt to the ongoing pandemic by offering live online music sessions, but it seems the change in strategy may not have been enough.
The filing in the Bankruptcy Court of the Eastern District of Virginia will allow Guitar Center and its related brands to continue to operate in the normal course while it carries out a restructuring plan.
“This is an important and positive step in our process to significantly reduce our debt and enhance our ability to reinvest in our business to support long-term growth,” Ron Japinga, CEO of Guitar Center, said.
“Throughout this process, we will continue to serve our customers and deliver on our mission of putting more music in the world. Given the strong level of support from our lenders and creditors, we expect to complete the process before the end of this year.”
The retailer is just one in a host of businesses that have been heavily hit by the coronavirus pandemic, which has caused a host of store closures across the country since March.
Non-essential retail has been intermittently closed across the US under stay-at-home orders, preventing customers from shopping in stores in person.
Unemployment rates have also soared in the country throughout the year, leaving people with less disposable income for discretionary purchases.
Guitar Center has around 300 stores across the US and its sister brand Music & Arts has more than 200 stores specialising in band and orchestral instruments for sale and rent.
The plan will reduce debt of the brand by nearly $800 million and is supported by up to $165 million in new equity investments, Guitar Center said.
The company said it has liabilities of $1 billion to $10 billion, with a similar range for its assets, according to the filing.
Additional reporting by Bloomberg
Subscribe to Independent Premium to bookmark this article
Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments