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Guitar center wiped out!
- Thread starter rockscott
- Start date
I wouldn't expect them to be doing anything other than liquidating existing inventory, since they are in bankruptcy. They're not able to purchase new stock; whatever money they have is going to pay debts at the moment. So it's not going to be getting any better any time soon.
Their bankruptcy plan is already approved- the Chapter 11 exit plan was approved/ announced in mid-December, 2020.
I was at that Braintree store a week back. And just like all the New England stores it was pretty barren. They did have a brand new Fender American Professional II Jazz in midnight blue. And a pink Flea bass which I thought was kinda impressive to have those is stock. I don't know if they are still there or not but I did pick up the Pro Jazz II to check it out. No big deal for $1,500.00! The flea was too high up and couldn't reach it and I didn't want to get involved with a salesperson. I think what you are seeing happening is multi fold. One COVID has slowed down production of most music gear because a lot of comes from China. Two G.C. is in bankruptcy so their buying power is limited. And three musicians just don't have the money or cause to spend on gear. I mean why buy a new bass, bass amp, p.a., lights etc. when you don't need it or have anywhere to gig with it. Recording stuff is different.
Plus online sales from companies like Sweetwater and Reverb are taking a lot of their business away. I mean why take the risk getting exposed to COVID when you just buy online, have it shipped to your house and if you need to return it. Ship it back. The whole New England area all states have very high numbers of COVID. Especially MA. I was up at Manchester Music Mill in Manchester NH the other day. An awesome store! But when I got there was a big sign on the door saying closed. I texted the manager whom I am long time friends with and he told me they had to close because a staff member came down with COVID. And all the staff has to get tested and the store cleaned. Can you imagine having to clean a music store for COVID! OMG what a process that must be.
It will be interesting to see what happens to G.C. it was once a great chain for all kinds of music gear. But I have a feeling it's going to be going down the road of MARS Music. And that will be sad in a lot of ways but good for the little guy.
STAY SAFE ALL!
Plus online sales from companies like Sweetwater and Reverb are taking a lot of their business away. I mean why take the risk getting exposed to COVID when you just buy online, have it shipped to your house and if you need to return it. Ship it back. The whole New England area all states have very high numbers of COVID. Especially MA. I was up at Manchester Music Mill in Manchester NH the other day. An awesome store! But when I got there was a big sign on the door saying closed. I texted the manager whom I am long time friends with and he told me they had to close because a staff member came down with COVID. And all the staff has to get tested and the store cleaned. Can you imagine having to clean a music store for COVID! OMG what a process that must be.
It will be interesting to see what happens to G.C. it was once a great chain for all kinds of music gear. But I have a feeling it's going to be going down the road of MARS Music. And that will be sad in a lot of ways but good for the little guy.
STAY SAFE ALL!
Armed with that information, I think they are looking at reducing the number of locations due to scrutiny concerning sales volume/profit-loss. That's somewhat typical when a business reorganizes with chapter 11. Stock reduction at most locations makes sense in that scenario.
I will miss gc, i have only purchased 2 basses from them, but they were handy for, strings,cables, etc.
Close 5 of the 10 store in the Dallas/Fort Worth area. Looks like they almost fit in a 20-mile radius circle.
Same at the Cherry Hill, New Jersey Guitarcenter and Sam Ash it was about October where they both started to dry up and now they are even more bare, still have pretty full Black Friday displays for studio headphones and other accessories, not a good sign at all. It’s been a common thing the past few years where they end the year rough and struggle through the first quarter, hopefully Spring breathes some life into them as it has happened before. I can’t imagine they can keep it up forever though
I looked through the court records, and I'm not a lawyer, but I didn't see anything that would indicate closing stores in the plan. Essentially, 3 equity firms take over and invest money. Things can still fall apart or be withdrawn, but Feb 1, 2021 looks like the date when everything is finalized.
Guitar Center Emerges from Chapter 11
Wednesday, December 23, 2020
Just a month after filing to reorganize under Chapter 11, Guitar Center Inc. has emerged after ridding its balance sheet of about $800 million in debt.
The Westlake Village musical equipment retailer has entered agreements to receive up to $165 million in new equity financing from stakeholders Ares Management Corp. in Los Angeles, hedge fund Brigade Capital Management and private equity firm Carlyle Group. The three firms now own 100 percent of the common stock in Guitar Center.
The company also raised $375 million by entering a new secured asset-based revolving financing facility funded by Wells Fargo and JPMorgan, and another $350 million – up from the expected $335 million – by selling new senior secured notes. That adds up to about $890 million in operating capital.
U.S. Bankruptcy Judge Kevin Huennekens in the Eastern District of Virginia, who approved the reorganization plan, said Guitar Center’s structure would allow it to repay creditors in full.
Guitar Center Emerges from Chapter 11 | San Fernando Valley Business Journal
Wednesday, December 23, 2020
Just a month after filing to reorganize under Chapter 11, Guitar Center Inc. has emerged after ridding its balance sheet of about $800 million in debt.
The Westlake Village musical equipment retailer has entered agreements to receive up to $165 million in new equity financing from stakeholders Ares Management Corp. in Los Angeles, hedge fund Brigade Capital Management and private equity firm Carlyle Group. The three firms now own 100 percent of the common stock in Guitar Center.
The company also raised $375 million by entering a new secured asset-based revolving financing facility funded by Wells Fargo and JPMorgan, and another $350 million – up from the expected $335 million – by selling new senior secured notes. That adds up to about $890 million in operating capital.
U.S. Bankruptcy Judge Kevin Huennekens in the Eastern District of Virginia, who approved the reorganization plan, said Guitar Center’s structure would allow it to repay creditors in full.
Guitar Center Emerges from Chapter 11 | San Fernando Valley Business Journal
Moving inventory can costs tens of thousands of dollars. By comparison they save money if they sell it at cost instead (although in reality they probably sold above cost, just below their usual margins), and also avoid lossage through theft and damage that usually occurs with big moves. This allows the new store to have brand-new fresh inventory too. Unique items and very expensive things are usually not included in these sorts of blowouts.
oh they're taking on used gear, begging for it. First week of January I got 249 for a 2000 Cort Curbow 4 Signature bass and an Ampeg BA115, 100 watt V1. Plus if I used the trade in money to buy something new they gave me 15 percent off. I also had 80 in GC gear bucks. Ran up a bill of 743 and walked out the door for 300.
GC, like everyone else, is having a hard time getting stock becuase manufacturers are behind. Where I work what normally takes us 2 to 3 days to get is taking 2 to 3 weeks.
Only the biggest of retailers are in better shape because they had stock built up. Example, I needed a new soldering iron from Milwaukee for work. I ordered one from Northern Tools in August, by November it still wasn't in. Home Depot had one sitting in their warehouse in Atlanta and got it to me in two days.
I know this bursts the hopes of all the haters that want to see GC go under. I'm not a fan of the corporation myself. But my local GC employs several local pro musicians who are also friends of mine. I may not like who they work for. But I don't want to see anyone lose their job either.
JeezyMcNuggles
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All manufactures are also producing a lot less due to covid labor restrictions. Ernie ball's November namm quota was 10 basses...with 6 months of prep.
I was in there last week, returning a bass strap that didn't fit. I ended up buying a used bass that they had taken in on trade earlier that morning. Talk about being in the right place at the right time!
They have fewer than 20 basses on the wall, and stock is low all around. However, it seems like a supply chain issue, not a a bankruptcy issue. The week before, I had wanted to buy a small practice amp that showed as "in stock" but was long gone by the time I arrived. I was told that they were getting one more in that week; it, too, was gone by the time I showed up.
A friend of mine who works at an independent music store told me that they had been doing very well this past year, since lots of people were keeping themselves occupied during quarantine by picking up a new hobby, buying new/used instruments, and taking lessons online via Zoom.
Like it or not, Guitar Center is probably here to stay for the foreseeable future.
Agreed, but in this situation there are stores just a few miles away that are hurting for inventory.
SirMjac28
Patiently Waiting For The Next British Invasion
Talked to the manager at my local GC it is all covid related can't get in new stock.
The equity firms are not stupid. They invest the money, sell unnecessary stores to not have 10 in a 20 mile radius but just at the best locations, make GC profitable again and then sell it at a higher valuation.
GC went bankrupt due to too many stores and internet competition, of course they gonna restructure and sell stores.
Their stated plan is to go full service doing not just retail, but lessons and other services. So closing stores doesn’t make a lot of sense in that scenario.
When I was in there, a sizable portion of the store had been dedicated to free-standing lesson booths. Mounted to these booths were racks holding their branded lesson books.
