-
It's official. Gibson today filed for chapter 11 bankruptcy protection
-
05-01-2018 10:30 AM
-
I am very surprised that Gibson is doing so badly. But I guess I am uninformed about it as well. So what is their problem? I always thought they should be like Apple; overcharging customers who are very happy to be overcharged. Are they selling too little guitars? Or are their profit margins too small (which would be surprising since that means they have absurd production costs)?
Or are other areas of the company such a drag?
-
Oh, where to begin...
Originally Posted by Almeisan
-
It's not the first or the last time that ownership of the company will have changed. When the dust settles, Gibson will continue to do what it has been doing for over 100 years - making guitars. With fewer distractions and failed marketing strategies, one hopes. Originally Posted by Greentone
-
I guess I never totally understood exactly why Gibson has been struggling. I've heard rumors that there've been quality control issues but haven't seen it firsthand. However, I have noticed a lot of different products with the Gibson name. Heck, I get confused just thinking about a Les Paul. "So you want a gold top... Great! Which one? Standard, Traditional, Historic (specify which year RI), Studio (the 60's Studio actually looks like an early 50's gold top ????)?"
I don't know if that had any affect on sales, but it seems to me that it kinda watered down some pretty special models. Maybe they should've just stuck with making high-end, quality, iconic models and left the budget stuff to the Epiphone banner.
-
Ownership is not changing so fast with this BK. According to the plan, Henry J and Dave B will remain in control. Originally Posted by Hammertone
This restructuring will mean a major haircut to the creditors if approved.
-
More details here:
Gibson Files Bankruptcy in Deal to Renew Guitar Unit - Bloomberg
-
I love Gibson guitars!
What a sad day - almost unbelievable.
-
Sad to oread. Lets hope Gibson Guitars benefits from it and that we will be refrained from another Norlin period.
I hope for good and affordable guitars.Last edited by hotpepper01; 05-01-2018 at 03:59 PM.
-
No offense to anyone, but if you don't know why Gibson is in trouble, you haven't been paying attention (or at least reading the gazillion threads on this forum).
This is both more and less than it seems. It looks like a way for majority shareholders to get rid of some boat anchors not related to instruments at the creditholders expense--electronics for instance--though for now anyway they're not insisting on new leadership.
Which kind of sounds like Henry J convinced them he could still run the company, if only he didn't have the unprofitable parts. We'll see if that is the case.
He has had his wings clipped quite a bit of course, but interestingly no Henry J wasn't a condition for bankruptcy.
This actually will not change things immediately with the guitar enterprise apparently, but over time that may change.
As with all things Gibson, time will tell.
-
Thanks. That was helpful. Hope they keep making guitars and leave the other businesses to those who know what to do with them. Originally Posted by ThatRhythmMan
-
I don't think the guitar part of the business is the problem Originally Posted by dallasblues
-
I got a massive amount of heat when I first said, paraphrasing the "Game of Thrones" saga, "Winter is coming" for Gibson. I got even more heat when I said that a new Norlin is going to happen.
What do you have to say now? I don't know about you, but in my case, I think a simple "told ya so" is in order.
Anyway, I don't think Gibson's gonna disappair, mind you. However, like it or not, a new "Norlin scenario" with Chinese capital and management is the most likely outcome.
EDIT: I just read the Bloomberg report; from what it's been petitioned, if granted, a New Norlin scenario seem to be avoidable... although I somehow still have my doubts about the actual feasibility of the requested refinancement. Only time will tell, I suppose...Last edited by LtKojak; 05-01-2018 at 12:05 PM.
-
So then which parts of Gibson are the unprofitable parts? No offense to you, but I only visit this site once or twice a year. Originally Posted by Doctor Jeff
-
Well, that's a way to put it. Originally Posted by Almeisan
-
Why is is so strange? They make guitars a lot of guitar people love, beyond reason. And they sell for 2000 more than similar quality guitars from other companies. Which means their brand name would add 1000 dollar/euro to their profit margin compared to their competitors. So why aren't they hugely banking money, just like Apple has been? They have the same business model and a similar following of fans.
So maybe the perception is wrong and all these Gibson lovers you talk to actually cannot afford new Gibsons. And these Gibson lovers just rotate their second hand Gibsons to each other because of GAS and 'superior resale value'? And there is a factory filled with overpriced newly produced Gibsons no one is buying?
-
Gibson Files for Bankruptcy in Deal to Renew Guitar Business - Bloomberg
Originally Posted by dallasblues
-
Your assessment is absurd. Do you know what a Chapter 11 Bankruptcy entails? This is a restructuring, not a liquidation. No ownership or management change will occur. Assets will be sold and creditors will see their notes devalued. And a few lawyers will get to bill some substantial hours @ $500 per hour. Nothing more, nothing less. Originally Posted by LtKojak
I got a massive amount of heat when I first said, paraphrasing the "Game of Thrones" saga, "Winter is coming" for Gibson. I got even more heat when I said that a new Norlin is going to happen.
What do you have to say now? I don't know about you, but in my case, I think a simple "told ya so" is in order.
Anyway, I don't think Gibson's gonna disappair, mind you. However, like it or not, a new "Norlin scenario" with Chinese capital and management is the most likely outcome.
For Gibson, Winter is a long way off.
-
No problem--I realize some people don't follow this that closely. Originally Posted by Almeisan
It's the "lifestyle stuff"--electronics and so on. See the Bloomberg post above. Henry J was also quoted in interviews talking about market challenges.
Gibson CEO Henry Juszkiewicz Talks Challenges Facing Guitar Retail Industry: 'These Are Troubled Times' | Billboard
I'm not the world's biggest Henry J critic but he's been with the company a long time and is long in the tooth. He has made some very questionable business calls (putting it mildly). I don't think he's the guy to lead them out of the wilderness.
As far as the Gibson guitar business, I don't think everything is rosy there either. You can't just make a boutique product in today's market and depend on collectors and LP fanboys to pull you through.
Martin, Godin, even Fender (though their finances are not secure) know how to make something for everyone.
-
Do you watch Game of Thrones? Ned lost his head in season one, but here 7 years later Winter is finally here. Heads may roll at Gibson yet... Originally Posted by Stringswinger
-
Hopefully no Red Weddings...
-
I think the situation is a little bit more complicated than this, but I'll refrain to further speculate until more factual info is released. Originally Posted by Stringswinger
If it really was a "long way off", nothing of what's happening should'nt have happened in the first place... but hey! Time will tell. Originally Posted by Stringswinger
-
Well, that is the thing. As long as you see people arguing online that buying a brand new Gibson is an investment, I realize that this is their perfect little profitable niche. They should only be making a select few high-end models and sell them to collectors. They shouldn't try to sell affordable guitars to musicians. And I think that is their business model already. And a lot of people hate that. But when they hear about Gibson doing bad, they claim that Gibson is doing bad because they aren't making a US-produced Les Paul cheaper and better than some Asian Les Paul copy.
So they are losing money on investments that aren't even guitar related.
As for the market, I can see how it is over-saturated with so many brands and companies, and that can cause a problem as the guitar-market is probably shrinking. But I think with smart and realistic marketing, a company like Gibson has to deliberately downsize and focus on their unique selling point; being Gibson. In fact, if Gibson prices down their guitars, they lose their unique selling point. What is the point in a Gibson being a Gibson if they are just as affordable and just as good as the next brand?
-
Some good info here! I'm certainly one of those that's been in dark concerning the troubles Gibson have been facing.
-
Originally Posted by LtKojak
Reply With Quote
“Shearing style”
Today, 05:26 PM in Comping, Chords & Chord Progressions