Is the Gibson Digital Guitar initiative just gone, gone, gone?

Started by Rhcole, April 25, 2016, 10:19:02 PM

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Rhcole

Gee, it seems like only yesterday that Henry J. smashed an SG on stage and announced the digital Gibson's. I know that Elantric had history with them and that Gibson has had Craig Anderton working for them.

But, it just looks the whole thing has been completely forgotten and replaced by new Memphis electrics and more budget guitars.

Does anybody know if the entire initiative was scrapped? We had Dark Fires and Dusk Tigers and the Digital Les Paul and then... what?

I wasn't personally a fan although I knew a few people here were. But, I wondered if eventually they might come up with something cool.

Anybody?

Elantric

I'm sure they are working on something new, but if they do go into production, hopefully they can learn from the past

Search on
Gibson Dark Fire

and review the dates of each post

An archive of real user experience with Gibson high tech guitars is at our archive site
https://www.vguitarforums.com/smf/index.php?board=466.0

https://www.vguitarforums.com/smf/index.php?topic=33087.0

https://www.vguitarforums.com/smf/index.php?topic=1371.0

At VGuitarforums, we have become the go to site for user discussions on real world use and implementation of high tech guitar FX and tools from companies who are delivering consistent high quality tools and better support after the sale in this field of high tech guitar today.

The tools for high tech guitar has never been better than today. and IMHO we achieve best FLOW when a symbiotic integration of the best sources of our tools can be integrated to what ever depth the player desires to pursue.

I tend to pay attention to what current boxes are being used on tour by players I respect (Vernon Reid and Adrian Belew) I also pay attention to the tools used by players who have "been there/done that" - like Reeves Gabrels and Alan Holdsworth   

But if your gear becomes a distraction or unreliable during live performance, its time to either invest the time to learn how to best exploit your gear's strengths for your needs , or find a tools that allows a closer match to your expectations and needs
To quote  / paraphrase Craig Anderton: " The tool you can "wrap your brain around" is always the better choice for live performance."

admin

http://www.thegearpage.net/board/index.php?threads/thinking-back-on-the-firebird-x.1700711/
Not that it's a knowable number, but I wonder how many actual sales there were of this guitar [Gibson FireBird-X].

I seem to recall a TGP post where someone with inside knowledge at Gibson heard that actual full price purchases were in the single digits.

Even if you multiplied that rumor by a factor of 10 or 100, wouldn't that still make the Firebird X the biggest R+D failure in the history of electric guitars?


QuoteNo. They were discontinued rather quickly. Gibson recalled the inventory from dealers and gave them credit for units returned (rumor is that Gibson destroyed the recalled stock). The alleged back story was that GC [Guitar Center]  leadership was frustrated by the poor sales, high returns, and the overall PITA of trying to sell the other "innovative models" that Gibson had previously delivered (e.g. Robot series, Darkfire, etc.) and did not want to stock the Firebird X at all. Gibson used their dealer contract to strong arm GC into taking the Firebird X. GC leadership in turn instructed their salespeople to "actively discourage sales" so that they could return as many as they could back to Gibson (proving poor sales, high returns, and a PITA)- that seemed to have worked.

BBach

The Firebird X was just about the ugliest guitar ever made. You gotta wonder about how it escaped out into public view. That focus group must have been off their meds.

shawnb

The only real "future proof" guitar is, well... a guitar.
Address the process rather than the outcome.  Then, the outcome becomes more likely.   - Fripp

imerkat

Quote from: Rhcole on April 25, 2016, 10:19:02 PM
I wasn't personally a fan although I knew a few people here were. But, I wondered if eventually they might come up with something cool. Anybody?

Gibson's name is both a blessing and a curse. They've been know for being the traditional guitar maker since the 60's and they had downturns when they try to break out of that identity like in the Norlin years and the 2015 models which saw their credit downgraded.

The only innovation their fan base allows are minute like chambered bodies or higher tuner ratios; if you stick something that requires a battery there will be hell to pay

my biggest peeve is they never came out with their hendrix strat model because of fan backlash. hey had the most beautiful headstocks I've seen.

Rhcole

It ain't easy being any of the big guitar companies. CMC machines allow essentially anybody to get a guitar that's 93% great for next to nothing. That last 7% is the devil, but many players are satisfied with instruments that are, say, 96% right. They won't pay 6X as much to get to an instrument that's at 98 - 99%.

What's Gibson supposed to do? They tried making guitars into tech boxes, but nobody wanted them. They are on thin ice over the long haul I think.

Heck, Roland used to make printers and plotters. They still might for all I know.

Elantric

QuoteHeck, Roland used to make printers and plotters. They still might for all I know.
"Roland Digital Group" continues to be among the biggest profit centers for Roland
https://www.rolanddga.com/company

https://www.rolanddga.com/

Rhcole

http://www.tennessean.com/story/money/industries/music/2016/03/04/gibson-brands-hit-credit-downgrade/81336440/

Not looking very good. Gibson is diversifying out of guitars. Or at least trying to.


---

Gibson Brands hit with credit downgrade
Nate Rau, nrau@tennessean.com 7:54 p.m. CST March 4, 2016
guitarart.jpg
(Photo: Submitted)
Nashville-based Gibson Brands had its credit rating downgraded this week thanks in part to the poor consumer reception of its 2015 model guitars.

Gibson was downgraded by Moody's Investors Service, which also put the rating on a negative outlook in a strikingly negative report. The rating was downgraded from B3 to Caa1.

In addition to the poor sales for its 2015 guitars, Gibson was downgraded because of high turnover in its senior financial management. The downgrade came with an ominous warning that Gibson may not be able to meet its near term financial obligations, including nearly $100 million in obligations due over the next 22 months.

"The ratings also reflect the company's high leverage at around 8.5 times and the risks associated with the consumer electronics business," the Moody's news release about the downgrade said.


THE TENNESSEAN
Gibson changes tune: Electronics before guitars

The downgrade comes on the heels of Gibson aggressively acquiring consumer electronics companies, (including Onkyo,Teac/Tascam,Stanton, KRK, Philips Consumer Electronics(WOOX), Cakewalk) and shifting its strategy from focusing primarily on guitars and other instruments to more broadly becoming a music lifestyles company.

Those acquisitions have left the company increasingly leveraged, with a debt to earnings before interest, taxes, depreciation and amortization ratio of 8.5 times, according to Moody's. That's up from a debt to EBITDA ratio of 5-times at this time last year.

The company introduced some design changes last year including a robotic tuner called the E-Tune that was standard on many of its flagship models.

Gibson says it is already seeing a financial turnaround on the sales side, and the company has a new CFO to help address stability concerns about senior financial management. Gibson, the maker of the iconic Les Paul model electric guitars, is a privately owned company in its 122nd year of operation.

"The company has posted quarterly results for our quarter ending December 2015 that were materially better than they were for the prior year," Gibson Chairman and CEO Henry Juszkiewicz said. "While we experienced a soft reception to our 2015 products, we have since introduced our improved 2016 product line that is performing extremely well both in sales to retailers and sell through to consumers globally. We feel we are on an upward trend, poised for an excellent year and are confident of the future."


THE TENNESSEAN
Gibson paying $135M for Royal Philips' WOOX brand

Kevin Cassidy, Moody's senior credit officer, expressed concerns about Gibson's upcoming debt obligations, including a $36 million payment due in December of this year and another $62 million due in December 2017.

"The downgrade reflects the weak performance and the resulting very high leverage and also the additional financial obligations Gibson incurred from its agreement with a consumer electronics supplier to settle overdue payables and the stress it puts on the company's liquidity profile," Cassidy said.



Moody's called it unlikely in the near term that the negative outlook would be lifted, but over the long term an upgrade is possible "if Gibson improves and sustains its operating performance."

Revenues were approximately $1.7 billion for 2015. That number has skyrocketed in recent years, up from $300 million in 2010, thanks to the acquisitions of several electronics companies like WOOX.

The Moody's credit opinion made issue of high turnover in Gibson's senior financial management. Turnover within the company was made an issue in blog posts on the pop culture website Gawker.com. In comments to The Tennessean last year, Juszkiewicz defended the company's culture and said the complaints were from a vocal minority.


THE TENNESSEAN
Gibson Guitar headquarters sold again

On Friday, Juszkiewicz said the company has hired a new CFO, Benson K. Woo, who comes to Gibson from Rayonier Advanced Materials Inc.

"We feel the addition of a world-class CFO who has a global background with several major companies has significantly improved our capabilities in this area," Juszkiewicz said. "We tripled the size of our business one year ago and have been integrating a substantial new business. It is not unusual to have some speed bumps in the integration process of a major new global entity. We believe we are progressing well and are very excited about this coming year."

Juszkiewicz said the company is committed to Nashville, where it hopes to grow its manufacturing of audio products.

"As part of our continued commitment to Nashville and American manufacturing, we continue to hire people and expand," Juszkiewicz said. "We also hope to start manufacturing consumer audio products in our Nashville manufacturing campus within the year."

Reach Nate Rau at 615-259-8094 and on Twitter @tnnaterau.

aliensporebomb

The main issue is that Henry J was/is trying to turn Gibson into a "lifestyle brand" ala Harley Davidson and some other big names that tend to take a lot of disposable income from folks.

But what people really wanted was Les Paul's and SG's and 335s the way they used to make them and Heritage Guitar kind of took over doing that. 

I've seen some nice Gibson guitars in the stores made recently but they are very expensive for what they are and the bang for the buck just isn't there.

The other thought is that other companies are producing compelling offerings that eclipse Gibson in terms of price and the like.
My music projects online at http://www.aliensporebomb.com/

GK Devices:  Roland VG-99, Boss GP-10, Boss SY-1000.

Rhcole

I haven't been a fan of Gibson for quite a few years due to the information I have received through my own grapevine about certain management practices. Having said that, this is an American tragedy playing out, especially for musicians. The lowered Caa1 credit rate means that the investment community doesn't have much faith that Gibson will make it. They have to pony up $36M by the end of this year in debt repayment of loans which they may not be able to meet. If they can't...

Henry J clearly recognizes the pressure of import and budget guitars that are of good quality and 1/4 the price of his models. He does think he can leverage the Gibson name as a lifestyle brand and he has basically bet the farm on this strategy. If he misses, expect Gibson to go into bankruptcy, get broken up, and the Gibson name and models to be up on the auction block.

I compare Gibson with Gretsch, which faces the exact same pressures and challenges as Gibson. However, Fred Gretsch Jr. seems to be a genuinely great guy that everybody likes. But, except for certain pricey models, all Gretsches have been manufactured offshore for some time now. Like I said, it is an American tragedy.

Elantric

FWIW  - )  since 2002 Gretsch Guitars are now a division of FMIC (Fender Musical Instruments Corporation, Fender has all control over the manufacturing and distribution of Gretsch Guitars for past 14 years.
https://en.wikipedia.org/wiki/Gretsch

And I see Gibson is now recruiting for yet another Gibson production manager (same position I was asked to consider back in 2010)
https://www.glassdoor.com/Jobs/Gibson-Brands-Jobs-E6869_P3.htm

https://www.glassdoor.com/Reviews/Employee-Review-Gibson-Brands-RVW44296.htm


With Gibson, one must remember that the whole Gibson Brands ( Gibson, Baldwin, Wurlitzer, Epiphone, Onkyo, Teac, Tascam, KRK, Cakewalk, Cerwin Vega, Stanton) is now co-owned by Henry Juszkiewicz & Dave Berryman  - no stock holders.
http://www.alacrastore.com/moodys-credit-research/Moodys-CFO-resignation-at-Gibsons-Brands-Inc-re-ignites-senior-management-stability-concerns-PBC_1008589

https://en.wikipedia.org/wiki/Gibson_Guitar_Corporation
http://www.bloomberg.com/research/stocks/private/person.asp?personId=4339939&privcapId=28990
http://www.bloomberg.com/research/stocks/private/person.asp?personId=44673263&privcapId=28990
https://www.google.com/finance/company_news?cid=12574232

Rhcole

Received an email from Cakewalk (now owned by Gibson):

   "Dear Reader,    
   With the introduction of Lifetime Updates for SONAR Platinum, there have been many theories as to why Cakewalk would take such a bold move. For us it's simple—it's better for customers, it's better for us, and we believe this way of doing business is the future, so we're embracing it today."

Wonder if that's to generate cash to help bail out the parent company?

Elantric

QuoteWonder if that's to generate cash to help bail out the parent company?

Bingo
http://www.tennessean.com/story/money/industries/music/2016/03/04/gibson-brands-hit-credit-downgrade/81336440/



http://forum.cakewalk.com/Sonar-Platinum-lifetime-updates-m3417927-p2.aspx

http://www.cakewalk.com/June-2016


I bet Gibson's next strategy is selling Annual String Subscriptions.

Too bad Gibson strings are rather bad and unbalanced compared to D'Addario's IMHO.
http://store.gibson.com/strings/

Now_And_Then

Quote from: shawnb on May 02, 2016, 06:48:47 PM
The only real "future proof" guitar is, well... a guitar.
Very high-tech solutions to very low-tech problems is a recipe for disaster.

Quote from: Elantric on June 14, 2016, 02:00:44 PM
I bet Gibson's next strategy is selling Annual String Subscriptions.
I bought Fruity Loops quite a while ago and got free lifetime upgrades. (I don't know how suitable FLStudio is for the people on this forum but it is a very capable and powerful piece of software.) When Gibson subsequently bought Image Line's Deckadance Studio I had thought that they had bought Image Line in its entirety and was waiting for them to abolish the free lifetime upgrades policy but luckily that did not happen (and apparently was not possible as Image Line only sold Deckadance.)

I love Gibson guitars and always have but even if I could afford to buy them new, I wouldn't - because, based on what I have read about him and his business practices, I find this Juszkiewicz character to be an extremely distasteful individual and possibly a con artist. In fact, I am not 100% sure that I would even buy second-hand Gibsons at this point.

Reading these latest postings about Gibson's highly leveraged and rapid expansion, it looks as they are going down the very same path that any number of hot-shot executives have chosen for their companies and which lead not to wealth beyond the dreams of avarice, but to bankruptcy. 

Good for them!

And maybe good for us, too...

... because I kinda would like to see the whole Gibson consortium go bankrupt, and the company broken up and sold off, and the guitar division ending up in the hands of some entity that wants to make guitars, and not the grab-bag of unrelated crap that comprises the "Gibson Music Lifestyles Brands".

shawnb

Just thought I'd add...   I've been playing my Dark Fire a lot lately.  It still plays nice & all of the electronics work great.  I love the alternate guitar tones you can pull out of it, very rich tones.  But everything still works fine today.  Even the quirky PU-switch/piezo-mixer works fine (since it was replaced with a slightly better version a few years ago...). 

Very playable & a beautiful guitar. 

l am one of the few that (strongly) prefer the old DF firmware & dislike the newer DuskTiger firmware, so I restored the DF to that state.  This enables me to discretely turn things off & on (hex processing, piezo pickups, EQ) based on need.  Extremely versatile.  Most of that control was lost with the DT firmware.  I cannot use the chameleon tone editor, but frankly, I never got a better tone with that than I could just adjusting the DF settings. 

I'm a little nervous about the inevitable Windows upgrade that will prevent me from configuring my RIP.  That day is coming, but so far, so good... 
Address the process rather than the outcome.  Then, the outcome becomes more likely.   - Fripp

Elantric

Quotel am one of the few that (strongly) prefer the old DF firmware & dislike the newer DuskTiger firmware, so I restored the DF to that state.  This enables me to discretely turn things off & on (hex processing, piezo pickups, EQ) based on need.  Extremely versatile.  Most of that control was lost with the DT firmware.  I cannot use the chameleon tone editor, but frankly, I never got a better tone with that than I could just adjusting the DF settings. 

I need to do that too - the Dusk Tiger firmware with active "Chameleon Tone" (a Rohm Car Stereo Graphic EQ IC ) only served to destroy any functionality on my Dark Fire with its added hiss!

Rhcole

Look for dramatic events before and at the time that Gibson has to pay $36M in December. You may see crazy discounted guitars hit the market, some of which may not be very well built.
A Les Paul Sale-a-thon at Musician's Friend, for example. If that happens buy fast before newer stock with reduced QC hits the shelves.

Elantric

QuoteLook for dramatic events before and at the time that Gibson has to pay $36M in December.

Watch this space for Gibson Black Fri Sales in late November 2016
https://www.theblackfriday.com/2016.shtml

imerkat

As an Epiphone fan I wonder what this means for it as a company. Are they in the same boat to go down with the ship or could it survive an return to its former glory?

Rhcole

I would be surprised if any of the major brands disappeared. They might get bought out or taken over, with potential production and quality issues at various points, especially right before or after a transition. Desperate companies may take drastic measures to cut costs, and employees may also not be well-supervised.

I bet Epiphone itself is doing just fine but is burdened by the parent company. Gibson might sell them or any other division for that matter to free up cash.
I'm pretty sure we haven't heard or seen the last of dramas created by Henry J. It's kind of entertaining, except it's sad for employees and also the guitar public who honor Gibson's terrific contributions and legacy.

whippinpost91850

I COULDN'T AGREE MORE. Henry J (for Jerk) is an idiot in my book and has thoroughly basterdized the Gibson guitar co. Hopefully someone will buy it and take it back to it's glory

chrish

let's just hope that gibson can meet their debt obligations. After i got out of psyhcology related fields and into home construction in 1985, my industry went down the tubes for awhile (2007 crash) when greed took it down. I was able to weather the storm, but the lesson i learned from that experience is that profiting from others misfortune is not sustainable, even though our country has been built on that business model. A band called 'dead can dance' said it best in their lyric, '' we've been too long american dreaming that i think we've all lost our way, filled on somnambulistic maniacal in the dark'' (concept of getting out of the vat of goo for 'Matrix' fans ie seeking enlightenment' ) In other words, if anyone is really in the market for a new gibson product, just buy one now, the gibson workers (laborers and crafts people like us constuction workers) will thank you.   

musicamex

The amount gibson has been mandated to pay likely doesn't represent its actual debt.  Gibson owes many suppliers small and large per the scuttlebutt at NAMM over the last few years.  Anyone buying the Gibson brand would assume the red ink unless "G" files chapter 11.  Not exactly makes it an attractive commodity  from a standpoint of reestablishing a supply line, at least IMHO.

Elantric

https://www.thestreet.com/story/14280618/1/gibson-guitar-may-default-if-company-can-t-refinance-its-debt.html

What's lower than a B? The financial rating of Gibson Brands Inc.

The famed guitar maker had its rating lowered to Caa3, nine notches into junk territory, with a negative outlook, as maturity of $520 million in debt approaches.

The privately-held company will need to refinance the debt before July 2018 or it faces a likely default. Moody's Investors Service Inc. said last week that there's "uncertainty" about the company's ability to refinance this debt and that its capital structure is "unsustainable." Gibson didn't respond to request for comment.

Although Gibson's finances are the most stressed, according the rating firm, it's not the only music company that's playing the blues.

In December, Moody's moved piano maker Steinway Music Group to Caa1, from B2, because of the company's highly-leveraged balance sheet. The company, owned by Paulson & Co., has a $300 million senior secured term loan due in 2019 and is leveraged at 8 times debt to Ebitda (earnings before interest, tax, depreciation and amortization), according to Moody's.


Last year, Fender Musical Instruments Corp., partly owned by Servco Pacific Capital and TPG Capital LP, was able to pull itself up to B1 from B2, which is still in speculative territory but only by four notches. The upgrade followed Fender's move to pay down $40 million of debt in 2016, bringing its leverage to 2.5 times debt to Ebitda. Still, the company has posted small revenue and has poor product diversity, Moody's said.

Music retailer Guitar Center Inc. had its outlook changed to negative in April (rating maintained at B2) as a result of the challenging retail environment and substantial debt maturities approaching in the next two years. Guitar Center is owned by Bain Capital LP.

None of these companies responded to request for comment Tuesday.

The industry generally is vulnerable to any dips in consumer spending, due to the often-discretionary nature of musical instrument purchases.

But for Gibson specifically, Moody's also cited a reduction in the number of products it's selling, new regulations and turnover among senior management as causes for concern.


"We expect Ebitda to remain essentially flat this year as we think margin enhancements will not be enough to offset revenue declines," Moody's said in the Aug. 17 downgrade. "Moody's expects a significant decrease in revenue this year as the company reduces the number of SKUs in the Audio business and deals with the lingering effects of supply shortage issues that began in the first quarter of the fiscal year ended March 2018, new government regulations for certain wood products, and long-term secular pressure on guitar volumes in the Musical Instrument business."

Turnover at the "senior financial management level creates challenges to executing a quick operational turnaround," the rating firm added.

Levered at a rate of 10 times debt to Ebitda, Gibson has $375 million in senior bond debt maturing on Aug. 1, 2018. An additional $145 million in senior bank debt has a springing maturity of June 23, 2018, if the company doesn't manage to refinance the bonds.

The Nashville-based company, famous for its Les Paul guitar, has $1.2 billion in revenue annually, according to Moody's, and manufactures brands Gibson, Philips, Epiphone, Kramer, Baldwin, Onkyo, KRK and Stanton.