Guitar Center to Officially File for Chapter 11 Bankruptcy, Restructure Debt


Rock Cellar Magazine StaffCategories:Latest News

Rock Cellar Magazine

Beloved retailer Guitar Center, which has been a principal player in the music community with more than 250 locations spread across the United States after being founded in 1959, recently announced plans to file for Chapter 11 bankruptcy protection.

This is obviously a significant decision for the company, which issued a press release on Nov. 13 detailing its position:

Ron Japinga, CEO of Guitar Center, said: “Today we announced a very important and positive step forward to ensure the long-term financial strength of Guitar Center. 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. As a result of this financial restructuring process, we will be better equipped to execute on and invest in our strategic growth initiatives and we will continue delivering through the strength of our brands, availability of our stores, customer-focused associate relationships, innovative music education programs and our expanding digital solutions.”

More, from the press release:

The RSA is intended to allow Guitar Center and its related brands (including Music & Arts, Musician’s Friend, Woodwind Brasswind and AVDG) to continue to operate in the normal
course while the transaction is implemented. As a result of the RSA, Guitar Center will continue to meet its financial obligations to vendors, suppliers, and employees, and intends to make payments in full to these parties without interruption in the ordinary course of business. Guitar Center will continue to provide uninterrupted service to its customers through its existing channels, including its stores, websites, call centers and social media pages and will continue to receive goods and ship customer orders as usual. All merchandise credits, prepaid lessons, rentals, gift cards, deposits, orders, financing and warranties will be honored. While Guitar Center is pleased with its overall store footprint, the Company has engaged A&G to explore opportunities to optimize its real estate portfolio and other agreements to focus on investments that best position the Company to return to its growth trajectory prior to COVID19.



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