By: Ringo Bones
The company that became familiar to every teenager who wants to be a famous rock star that is also famous for making Gibson guitars and Baldwin pianos filed for Chapter 11 bankruptcy protection early Tuesday, May 1, 2018, after going through a serious sales slump during the previous 12 months. The Nashville, Tennessee based Gibson Brands requested court protection from its creditors, saying it had strong support from its loyal customer base that would allow the company to eventually survive.
Founded in 1894 and had virtually the biggest influence of 20th Century music even before World War I, the company states that it plans to continue designing, building and selling musical instruments and equipment, including other brands such as Wurlitzer, Dobro, Epiphone, KRK and Cerwin Vega. But the company states that it would kill its Gibson Innovations Unit, which makes Philips-based headphones, speakers and other electronic accessories.
Not only famous for producing musical instruments that shaped 20th Century music and post World War II rock n’ roll, Gibson is also well-known for providing guitars and other musical instruments to iconic rock-stars and Blues artists such as Elvis Presley, BB King, Keith Richards, Pete Townsend and Lenny Kravitz. Gibson sells more than 170,000 guitars annually in more than 80 countries, according to a recent court filing. The company claims market share of more than 40-percent in electric guitars in the 2,000 US dollars and above price range. But sales have declined significantly and cost-cutting efforts haven’t done enough to stop the bleeding. In recent months, lenders required accelerated repayment as the company’s business deteriorated.
Gibson CEO Henry Juszkiewics said in a recent statement that “Over the past 12 months, we have made substantial strides through an operational restructuring…” adding that Gibson will “refocus on our core business of musical instruments, which we believe will assure the company’s long-term stability and financial health.”