Music: Gibson guitar company facing bankruptcy after 116 years

[Legionnaire]

Horribly run company. Henry has driven it into the ground. Gimmicks and QC go down while the prices continue to rise.

 

[zombie kopitar]

Wow it's crazy to see it actually happen.....but it's really not all that surprising considering the way they've been operating the last few years.

The thing is there was a guitar boom in the earlier 2000's with artists like The Strokes and White Stripes + Guitar Hero. Guitars were selling like hot cakes which gave these companies incentive to gauge the customer......but now all that has died and Gibson never readjusted.

 

[KirkOut]

I'm not very in touch with current music, but it seems like every time I see all these "indie" or alternative bands, they're playing Fenders.

 

[peate]

So many good guitars from different lesser known brands, the competition is fierce..

 

[kook10]

I'm not very in touch with current music, but it seems like every time I see all these "indie" or alternative bands, they're playing Fenders.

 

[Free Edler]

Gibson has absolutely no idea how to navigate the 21st century guitar market. People who are buying their first "real" guitar after learning for a while want better quality for less money, not poorly-QC'ed, expensive wall-hangers.

I haven't picked a Gibson off the rack that actually felt good in my hands in probably ~10 years and their "budget" line of guitars are worse quality than a mid-level Epiphone.

Fender is miles ahead of Gibson in terms of knowing their audience. They're not perfect - some more colour options, please - but they're perfectly placed at both ends of the market.

I've seen the point being made a few times that the guitar industry is dying off and fewer people are playing guitar, which misses the mark - new guitar sales may be down and industry giants slumping, but the second-hand market is thriving. People are still buying guitars, they just don't want to pay dealer and manufacturer mark-up.

 

[coupe89]

Why I am glad I bought my 2016 standard during L&M's October sale.

 

[Raging Bull]

I love the sound of Les Pauls but always hated playing them. My stubby hands make playing high on the fretboard difficult, compared to SG's with the double cutaways.

 

[Xelebes]

I've seen the point being made a few times that the guitar industry is dying off and fewer people are playing guitar, which misses the mark - new guitar sales may be down and industry giants slumping, but the second-hand market is thriving. People are still buying guitars, they just don't want to pay dealer and manufacturer mark-up.

The big problem is that the guitar has gone through the guitar boom and now it's coming to a close. It's very reminiscent of the collapse of the piano boom at the start of the 20th century. My parents still have a 1904 Armand upright that they got second hand back in 1990 for $250.

And honestly, you want your "standard" models priced at $800-1000. Synth, viola, guitar or what not. Only the special guitars should be priced at $2,000-5,000.

 

[Free Edler]

I love the sound of Les Pauls but always hated playing them. My stubby hands make playing high on the fretboard difficult, compared to SG's with the double cutaways.

I'm in a similar position to you. I also love the sound of Les Pauls and hated playing them. I'm not a gigging musician, so I play sitting down, and it's such an uncomfortable guitar to play while seated, it takes all the fun out of it for me.

The big problem is that the guitar has gone through the guitar boom and now it's coming to a close. It's very reminiscent of the collapse of the piano boom at the start of the 20th century. My parents still have a 1904 Armand upright that they got second hand back in 1990 for $250.

Those are beautiful pianos. A little less portable than a guitar when it comes time to get rid of it.

And honestly, you want your "standard" models priced at $800-1000. Synth, viola, guitar or what not. Only the special guitars should be priced at $2,000-5,000.

I think this is reasonable. Anything in that price range will usually be made offshore and people are pretty used to it by now. Guitars made in Korea are every bit as good as Gibsons priced under $2k. They've almost caught up with Japan. China is also getting a lot better with their QC - have you ever tried an Eastman?

Earlier this week, I pulled the trigger on my third custom shop G&L. For slightly less money than an off-the-rack American Fender (Canadian dollars, to be clear), I got to pick whatever I wanted on this guitar.

They won't ever compete with Fender for volume, but there's a pretty big gulf in terms of quality, and I'm a big Fender guy.

 

[W75]

WTF??

I'm just recovering from Kodak Kodachrome's and TMAX (actually, latter didn't die, but already sold my film cameras) disappearance, the slow death of the genuine whole physical rock albums and now Les Pauls, Flying Vs, Firebirds and SGs.

What's wrong with you 21st century? You suck! What's wrong with our youth? Things should be kept unchanged. Most of them at least.. the good stuff.

 

[Chairman Maouth]

Gibson files for bankruptcy to ditch electronics, focus on guitars

Rapidly maturing debt owed to private equity firms put the company in a bind.

Yesterday Gibson Brands filed for Chapter 11 bankruptcy protection. Known for its famous guitars, the company is in a similar situation to Toys 'R' Us, owing as much as $500 million to creditors including private equity firms like Kohlberg Kravis Roberts, Silver Point Capital and Melody Capital Partners. It took on significant debt -- which is about to mature -- to finance a series of acquisitions to build up a Gibson Innovations electronics business that it's now in the process of separating from. Other than buying a stake in TEAC, Bloomberg reports it bought Philips line of headphones and speakers, and until recently had close business ties with Onkyo.

 

[kook10]

 

[Tawnos]

Wow it's crazy to see it actually happen.....but it's really not all that surprising considering the way they've been operating the last few years.

The thing is there was a guitar boom in the earlier 2000's with artists like The Strokes and White Stripes + Guitar Hero. Guitars were selling like hot cakes which gave these companies incentive to gauge the customer......but now all that has died and Gibson never readjusted.

This doesn't really paint an accurate picture of the industry. Guitar sales are higher in the US today than they were before the recession, which hit pretty hard. Most of that rebound and growth is coming from women. Largely, it's fueled by articles like this: There are no more guitar heroes, so nobody wants an electric guitar No retraction, just a blurb at the end of the article with a correction on at least the Fender claims.

A lot of the industry has made pretty stupid decisions over the years. It wasn't exactly unpredictable that Gibson was making a bad bet with consumer electronics. Guitar Center has almost 300 stores. I worked there for 12 years and left in September of last year. When I started in 2005, there weren't even 200 stores. It's not just infrastructure that they went into debt for, it was inventory too. And still, taken by themselves and not part of the debt structure, almost every store in the chain is profitable (I saw P&Ls galore). I believe the only TRULY unprofitable store is the one in Times Square, which has massive rent and the company looks at as a marquee location. Frankly, if anything is hurting the guitar sales industry right now, it's the Guitar Center corporate ownership's handling of the business, which I could write novels about. If the move away from guitars to more electronics based ways of making music was really happening, you'd see the DJ, software and synth departments outpace the guitar departments. It hasn't happened. It's not even close.

Gibson does really dumb things with their line. They put money into making Les Pauls and SGs without tops for more than they sell Epiphones, of the same models, the higher end of which is actually a better instrument. The people who want to pay for the Gibson name don't make up for the money sunk into it. People have already mentioned the automatic tuners (which is made out to be more of an impact on Gibson overall than it is in reality; 98% of Gibsons don't have them) and quality control issues (which is a much much bigger problem).

And beyond that, they've made it nearly impossible for small resellers to become dealers. That takes them out of the market for the 30% or so of customers who don't live near a big box store and won't buy an instrument without playing it.

 

[zombie kopitar]

This doesn't really paint an accurate picture of the industry. Guitar sales are higher in the US today than they were before the recession, which hit pretty hard.

Where is your source on that?? I know companies like MusicMan have cut way down on their production.....I would bet money guitar sales were way higher during 2005-2007 then they have been the last couple years. If acoustics are selling at that much of a higher rate that's interesting for sure, but I'm not buying it as being a healthier market for guitar makers.

 

[Tawnos]

Where is your source on that?? I know companies like MusicMan have cut way down on their production.....I would bet money guitar sales were way higher during 2005-2007 then they have been the last couple years. If acoustics are selling at that much of a higher rate that's interesting for sure, but I'm not buying it as being a healthier market for guitar makers.

Music Trades magazine.