Guitar Center files for bankruptcy

[Greentone]

My oh my. GC the largest retailer of guitars has taken the plunge. Sad.

[sgosnell]

My daughter works for GC, and they say nothing will change, and they will continue to pay creditors. We shall see.

[starjasmine]

Duplicate of this thread:

Guitar Center to File for Bankruptcy

[Woody Sound]

Another article from CNN Biz.

Guitar Center is filing for Chapter 11 bankruptcy - CNN

[Greentone]

sgosnell,

I hope that your daughter is correct. I'd hate to see Guitar Center gone.

GT

[zdub]

... while Fender says guitar and instrument sales are booming (and through GC as well)...

Fender sales boom as guitar playing surges during the pandemic

[Greentone]

Many of GC's stores are in malls. Mall traffic is way down with covid.

[GTRMan]

Interesting. I've never seen a GC in a mall, have always seen free standing stores.

And retail dying? Yeah, they call it retailmageddon or something like that, and it didn't start with COVID.

It's an internet thing. The most disruptive technology in history?

[Jim Soloway]

My daughter works for GC, and they say nothing will change, and they will continue to pay creditors. We shall see.

They may continue to pay creditors but many of them are probably not going to get paid in full. That is very likely to cripple several of their suppliers both large and small.

[Jimmy blue note]

They may continue to pay creditors but many of them are probably not going to get paid in full. That is very likely to cripple several of their suppliers both large and small.

I worked in a GC repairs dept. You're absolutely right, we'd order essential supplies (bulk strings, parts, electronics supplies, etc) and they had to be back ordered ad nauseum. Suppliers just weren't sending things that used to be put on the regular accounts. And we were told by the managers that all parts were to be ordered through the office (when we used to be able to get parts simply by calling the vendors directly). That's when we knew the writing was on the wall. Nobody in management would say. Always "Everythings as good as it's ever been. This is our strongest quarter ever...). And suppliers somehow just didn't want to supply as they distanced themselves from sending stuff. Add to that their business policies of only buying from a fixed and finite pool of ultra big name vendors who rested on their laurels, and then were extremely reluctant to stand by inferior product manufactured to have a useful life of less than a year. You can see that to the public, everything was great and shiny, but behind the scenes the floorboards were rotting faster than anyone could ever repair them.
The sales floor would sell tons of low end budget offerings with prestige names, and 3 months later they'd show up in the repair shop with collapsed tops, split sides, warped necks and worse. And getting Taylor, Martin and Gibson to be accountable? Heh, you could tell they'd already written off GC as a lost cause. Their "generous 30 day return policy" was great, but things that were returned were never returned to the floor to be profitable. We had stuff hanging on the walls in the repair shop in limbo between "marked for clearance" and "see if you can send this back to the factory" (no).
Funny thing, the guys and gals working the sales floor really believed things were better than ever. They didn't see the fallout and because of the cut throat commissions system, they didn't WANT to know that the guitar they just sold wouldn't last a year in New England.
Self perpetuating system of cash over quality. Could this be part of the reason they're in trouble to begin with?

[sgosnell]

I've never seen a GC in a mall. There are many GC stores in the Houston area, all in standalone stores. In strip malls, alongside other stores yes, but not in the big malls. Same in New Orleans. Perhaps it's different elsewhere.

Jim, you're certainly correct, the purpose of bankruptcy is to shed debt. Logically that should be debt to investment firms, and suppliers should still be paid for product. Logic may not rule, however, and it would not be the first time a corporation has used bromides to calm the workforce. FWIW, my daughter is seeking other employment.