Gibson Guitar reorganization News

Started by admin, October 20, 2017, 08:40:45 AM

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admin

#25
http://www.daytondailynews.com/business/gibson-pushes-back-against-bankruptcy-talk-hires-new-cfo/bbo4o9DQMFKRhVZxCRCyKP/

https://www.gearnews.com/talk-gibson-bankruptcy-2018-intensifies/
https://www.ultimate-guitar.com/news/general_music_news/gibson_fires_staff_in_nashville_custom_shop_as_part_of_broad_initiative_throughout_the_company_to_prepare_for_our_refinancing.html
QuoteThis CEO clearly doesn't give a crap about the brand he works for.  He's firing senior staff (the people that showed years ago they can build excellent guitars) , and blaming stores for not carrying enough models, consistently.

For those of you that don't know, Gibson recently (five years ago?) required ALL official Gibson dealers to buy some 200K worth of Gibson and 100K of Epiphone EVERY YEAR, with a minimum order of around 50K.  To make matters worse, you could only order what was in stock at that second - no backorders.  So if a guitar came out in two months, you couldn't have it until next year, or until you had another 49K worth of product to order.

Most small shops outside of major areas like NYC, LA, etc. can't afford that, so they're only official every other year - Gibson just lets them keep the sign up. And the big shops .... well, the NYC Sam Ash is probably the only chain store with a great reputation, and it's literally across the street from a cooler store.

I can't say enough good things about Gibson, The Product In General. Historically, they've mostly been worth the silly prices.  But Gibson, The Product Recently has been good, not great, at way too high a cost, and the management over the last decade has practically been a guide on how to increase short-term investor profits at the risk of long-term damage to the company.

I'd be curious to know what kind of a severance package Juszkiewicz has in his contract.  He's making choices like a guy that doesn't give a damn, because he's going to get his no matter what.

admin

#26
https://www.bloomberg.com/news/articles/2018-02-20/gibson-creditors-are-said-to-want-new-ceo-before-funding-rescue

Gibson Creditors Want New CEO Before Rescue Deal
By Emma Orr

February 20, 2018, 5:29 AM PST Updated on February 20, 2018, 3:06 PM PST

Bondholder group wants majority control of guitar maker
Chief executive seeks to refinance as debt deadline looms
Gibson Brands Inc.'s Chief Executive Officer Henry Juszkiewicz and his creditors both see value in the iconic guitar brand -- but that might be the only thing they see eye-to-eye on.


Henry JuszkiewiczPhotographer: Jeff Adkins/Bloomberg
A group of bondholders advised by PJT Partners Inc.
https://pjtpartners.com/

is pushing for a restructuring that would hand them ownership of the guitar maker and let them install new leadership, according to people with knowledge of the plans. The holders don't expect Gibson's earnings will be strong enough to attract new money for a refinancing to head off a default looming later this year, and creditors are reluctant to invest more funds while Juszkiewicz is still in charge, the people said. They asked not to be identified because the plans remain private.

The bondholders, who claim to control more than two-thirds of Gibson's outstanding notes that come due in August, would allow management to keep a small ownership stake, according to the people. Juszkiewicz, who has run Nashville, Tennessee-based Gibson for more than 30 years, says he has no plans to give up majority control and brought back Benson Woo for a second tour of duty as his chief financial officer.


Some bondholders are "not looking to get paid back and get interest, but have other intentions that are not necessarily my intentions," Juszkiewicz, 64, said in a Feb. 15 interview with Bloomberg News. "They're trying to do everything possible to put the company in a worse position, and get us in a situation where they're exclusively talking to us. But factually, we've made our interest payments, fulfilled our obligations, and our intent is to pay back all bondholders."


Gibson is under pressure after loading up on debt for an ill-fated expansion into consumer electronics. Credit analysts have raised doubts that the company can repay borrowings coming due as soon as July. Gibson is working on a refinancing with investment bank Jefferies Group LLC, Juszkiewicz has said.

The company hasn't been interacting with the organized group of existing bondholders, according to the people with knowledge of the proceedings. Instead, it's trying to raise new money to refinance the entire capital structure and take out all of the existing debt, eliminating the conflict, the people said.

In addition to PJT, the bondholder group is advised by Paul Weiss Rifkind Wharton & Garrison, the people said. Representatives for the advisers and for Jefferies didn't comment.



"A lot of times bonds just get refinanced with the same group, but in this case we're not too happy about doing that, so we're looking at different financing options," Juszkiewicz said. "Some of them are single group, some of them are tiered financing. We've talked to lots of people, we've had interest, and some people have done initial due diligence."

The company is facing a $375 million bond maturity in August, and a springing lien that could cause $185 million of debt to become current in July if the bond maturity isn't addressed by that month. Gibson's August 2018 bonds fell as much as 2.5 cents on the dollar Tuesday to 79 cents.

Talks are underway, but there's not yet a deal in hand or firm pricing, Juszkiewicz said. "We're really trying to get the pricing right and get the best deal."

Juszkiewicz bought Gibson from Norlin Corp. in 1986 with two of his former Harvard Business School classmates. According to his biography on the company website, he paid his way through school playing guitar in various rock bands -- a Gibson, of course.

https://www.google.com/search?ei=eNuMWsOnCtbYjwOg6qfQAg&q=gibson+brand+bond+holders+list%3F&oq=gibson+brand+bond+holders+list%3F&gs_l=psy-ab.3...11507.13111.0.13299.6.6.0.0.0.0.162.472.0j3.3.0....0...1c.1.64.psy-ab..3.1.151...33i21k1.0.FaQYV4XOsGQ

admin

#27
https://www.glassdoor.com/Jobs/Gibson-Brands-Marketing-Jobs-EI_IE6869.0,13_KO14,23.htm

Quote from: Doug B, post: 25894589, member: 194068And more than half the brands that they mentioned above are more or less dormant.
More like evidence of the $$$ sinkhole of where the profits from Les Paul guitars were spent.

QuoteAs a quick reminder, Gibson has 100 brand names in its roster including Epiphone, Dobro, Valley Arts, Kramer, Steinberger, Tobias, Slingerland, Maestro, Baldwin, Hamilton, Chickering and Wurlitzer.

Its audio brands include KRK Systems, TASCAM, Cakewalk, Cerwin-Vega!, Stanton, Onkyo, Integra, TEAC, TASCAM Professional Software, and Esoteric.


Add $40 mil for Tronical Tuner development, MAGIC Ethernet audio (with 3-COM) and buying Opcode, Oberheim, Zeta Systems

http://web.archive.org/web/20021103045428/http://www.opcode.com:80/
http://web.archive.org/web/19990125101739/http://www.oberheim.com:80/
http://web.archive.org/web/19980614003153/http://www.oberheim.com:80/magazines/amplifier/1997/7/ax/


GIMICS at 2000 NAMM ( renamed Gibson MaGIC)
http://archive.gibson.com/files/_audio/magic/magic3_0c.pdf

https://en.wikipedia.org/wiki/Gibson_MaGIC
http://web.archive.org/web/20021128082049/http://www.geocities.com:80/SiliconValley/Monitor/6454/

http://money.cnn.com/2018/02/22/news/companies/gibson-guitars/index.html


admin

#28
http://money.cnn.com/2018/02/22/news/companies/gibson-guitars/index.html

S&P frets over Gibson Guitars' debt problem
by Aaron Smith   @AaronSmithCNN
February 22, 2018: 3:10 PM ET   

gibson guitars
Iconic American guitar manufacturer Gibson is facing some financial blues.
Standard & Poor's downgraded Gibson Brands on Wednesday over concerns that it might default on more than $500 million in corporate debt this summer.

The company has $145 million in outstanding bank loans that will come due on July 23 and another $377 million of outstanding secured notes maturing on August 1.


"With multiple maturities looming and operating weakness ongoing, we believe Nashville-based Gibson Brands could default on its debt obligations over the next six months," said S&P in a report from analyst Francis Cusimano Jr.

S&P lowered its rating for Gibson to CCC-minus, from the already very low rating of CCC. S&P says a CCC-minus rating indicates that a default is imminent.

The rating agency said that Gibson continues to deal with the "lingering effects" of regulations on imports and exports on rosewood, a critical component in many guitars.

Rosewood regulations slowed down the guitar industry as a whole last year, according to IbisWorld, which tracks the guitar industry.

But Gibson said it was confident that it would be able to refinance, especially since the company is improving its profitability and recently paid down $20 million in debt.

"We continue to be confident in accomplishing our refinancing and expect continuing improvement in operating results," said Gibson, in a statement. "We fully expect our ratings to improve once we announce our refinancing, which is in process."

S&P and Moody's both put out reports last year expressing concerns about Gibson's ability to refinance the debt or pay it off.

Moody's issued a Caa3 rating for Gibson, which it describes as a "substantial credit risk" with a capital structure that is "unsustainable."

Going forward, Gibson needs to find investors to refinance its debt, which is a challenging feat for a company with such a low rating. The company said it was working with Jefferies investment bank to pursue refinancing.

Another option, if it defaults, is to file for Chapter 11 bankruptcy protection.

Gibson began making guitars in 1894. Its popular Les Paul electric, which debuted in 1952, is one of the bestselling guitars of all time and has been used by legendary musicians like Eric Clapton, Jimmy Page, and Pete Townshend.

Both Moody's and S&P note that Gibson's strong brand name within the musical instrument industry will help as it negotiates liquidity issues and faces a potential reorganization.


https://www.thegearpage.net/board/index.php?threads/gibson-responds-to-bankruptcy-reports.1915506/



admin



admin

#31
Gibson may sell Maestro IP to raise capitol












admin

#32
https://www.musicradar.com/news/gibson-ceo-henry-juszkiewicz-guitars-from-the-50s-are-what-the-purists-want-but-we-have-to-have-something-new-and-exciting

Gibson CEO Henry Juszkiewicz: "Guitars from the '50s are what the purists want, but we have to have something new and exciting"
By Michael Astley-Brown (Total Guitar) 9 hours agoGuitars

"The 'purists' have a very loud voice on the online forums"



null
(Image: © EMMANUEL DUNAND/AFP/Getty Images)
Gibson CEO Henry Juszkiewicz has continued his defiant response to reports of Gibson's potential bankruptcy, blaming the company's financial troubles on "problems with the guitar retail industry" and "purists".

In a wide-ranging interview with Billboard,
https://www.billboard.com/articles/business/8215382/gibson-ceo-henry-juszkiewicz-guitar-retail-interview

Juszkiewicz stated, "[The industry is] stuck in a time warp, and the 'purists' have a very loud voice on the online forums.

"Kids today may think some music from the '50s is kind of cool here and there, but what other industry do you know that hasn't changed since the '50s?
https://en.wikipedia.org/wiki/Fender_Deluxe_Amp


"Those guitars from the 50s are what the purists want, but we have to have something new and exciting.

Innovation is a part of every business to some degree, but [the guitar industry] hates it

"Imagine if the camera had never changed. Innovation is a part of every business to some degree, but [the guitar industry] hates it. The kids demand it, and if you don't have it, they walk."

Recent Gibson releases, including the Boogie Van Les Paul
https://www.musicradar.com/news/gibson-revs-up-custom-boogie-van-les-paul-guitars

and Modern Flying V,
https://www.musicradar.com/news/gibson-modern-flying-v-guitar-officially-announced

have received mixed reactions on social media, while reissues, such as the RD,
https://www.musicradar.com/news/namm-2018-gibson-officially-reissues-the-rd-unveils-new-les-paul-double-cutaway-and-elite-guitars
have received more positive responses.

Previous attempts at innovation from Gibson, including the Firebird X (pictured with Juszkiewicz above),
https://www.musicradar.com/reviews/guitars/gibson-firebird-x-502631

and the installation of its Min-ETune (later G-Force) robot tuning system across entire lines, also proved controversial.
https://www.musicradar.com/news/guitars/first-review-and-video-gibsons-min-etune-self-tuning-system-574415


New approaches
The CEO goes on to say that finding new guitarists is something the company approaches with "great difficulty", in contrast to Fender's efforts to encourage new players via the Fender Play learning platform.
https://www.musicradar.com/news/will-fenders-play-app-change-the-way-beginners-learn-how-to-play-guitar



Juszkiewicz also defended the company's reputation with retailers, while pointing towards a future in direct sales.

"I've been called someone that hates retailers, and I don't; we make a real effort in making sure our retailers make a good profit off of our product.

"We've always been loyal to retail; we still don't have a site where we sell directly [to consumers].
EDIT: Gibson Online Guitar Sales went live Feb 1st 2018

http://store.gibson.com/
We probably will in the future, and part of that is in reaction to general trending toward e-commerce."

The interview follows a string of headlines from the company, including a no-show at NAMM,
https://www.musicradar.com/news/namm-2018-gibson-no-show-confirmed

and sell-off of its Memphis factory
https://www.musicradar.com/news/gibson-is-selling-its-memphis-factory

and the end of development for Cakewalk music software - which was purchased from Gibson by BandLab last week.
https://www.musicradar.com/news/gibson-ends-development-of-cakewalk-music-software


Gibson's current strategy is to "focus its Philips brand consumer audio business on those products that have greater growth potential" - its audio brand roster currently includes KRK Systems, TASCAM, Cerwin-Vega!, Stanton, Onkyo, Integra, TEAC, TASCAM Professional Software, and Esoteric.


admin

QuoteGibson's current strategy is to "focus its Philips brand consumer audio business on those products that have greater growth potential" - its audio brand roster currently includes KRK Systems, TASCAM, Cerwin-Vega!, Stanton, Onkyo, Integra, TEAC, TASCAM Professional Software, and Esoteric.

https://www.channelnews.com.au/duff-quits-gibson-brands-as-philips-audio-struggles/
https://www.channelnews.com.au/philips-sound-distributor-facing-bankruptcy/
Philips Sound Distributor Facing Bankruptcy

By David Richards| 20 Feb 2018
SHAREfacebook-sharetwitter-sharegoogle-sharelinked-share

Gibson Brands the Company that distributes Philips sound products worldwide is facing bankruptcy a move that could hurt Powermove the local distributor if it happens.

Parent Company Gibson who appear to be in trouble, was made famous by their guitars which were used by big name musicians Chuck Berry, Marc Bolan, Eric Clapton, Sheryl Crow, Bob Dylan, The Edge, Dave Grohl, Jimi Hendrix and the Beatles.

Now the iconic brand is that had a big marquee at CES is under threat.

The Company recently lost its CFO Bill Lawrence after less than a year, and the company owes $375 million in secured notes which are due to be paid later this year.

$16.6 million has been recently repaid on those notes, which were issued in 2013.

If the rest of the money cannot be repaid by July 23, another $145 million in bank loans will become due immediately.

The move could be a blow to Adelaide based distributor Powermove who have the rights to distribute the Gibson Brands Philips products in Australia.

Late last week the company issued a statement that said: "Gibson Brands, Inc [...] has met all current obligations to the bondholders, is in the process of arranging a new credit facility to replace the bonds, and fully expects the bonds to be refinanced in the ordinary course of business. "

Recently the company has been selling off assets including a piano warehouse in an attempt to balance the books.

The CEO Henry Juszkiewicz told the Nashville Business Journal "by monetizing these assets, we can reduce debt and generate funds to contribute to business segments that are thriving.

It is important to our business to get back to the financial success we had to achieve the best financial terms in the refinancing of our company."

Gibson, which has annual revenues of more than $1 billion has to refinance the loans by mid-July, the report said.

CEO Henry Juszkiewicz is thought to be in a race against time to decide whether to exchange the company's debt, look to try and pay it off using his equity or try to declare the company bankrupt.

The U.S.-based company has hired investment bank Jeffries to help with its current financial situation.

On Thursday, Gibson issued a statement that said an ongoing streamlining strategy would soon help it record the "best financial results the company has seen in its history within the next year."

It also said the firm would have the ability to pay back the company's debt in whole within seven years.


---
https://www.channelnews.com.au/duff-quits-gibson-brands-as-philips-audio-struggles/
Duff Quits Gibson Brands As Philips Audio Struggles

By David Richards| 29 Jan 2018
SHAREfacebook-sharetwitter-sharegoogle-sharelinked-share

Tracey Duff the former leader of the 'Innovation Team' at Gibson brands the distributor of Philips audio products in Australia has quit.

Duff who was struggling to grow the Philips audio business in Australia has taken on the role of Director of Sales at Fossil Group.

Working closely with Adelaide based distributor Powermove, Gibson brands has struggled to get the full range of Philips products ranged in Australia despite the brand being known for their quality and innovation.

As a results brands such as Marley and Jam have taken share of the Hi Fi market at the expense of Philips, also taking share away is Marshall, particularly at retailers such as JB Hi Fi.

ChannelNews understands that several distributors are vying to try and get the Philips audio business which is witnessing sales declines at BigW where the bottom end Philips headphones are sold.

Prior to joining Gibson Brands, Duff was Business Manager Sales & Marketing at Sunbeam.



admin

#34
https://www.nashvillepost.com/business/music-business/article/20992105/gibson-running-out-of-time-rapidly

https://www.nashvillepost.com/business/music-business/article/20994206/gibson-lays-off-staff-in-nashville-custom-shop

Gibson lays off staff in Nashville custom shop
Music brand needs to refinance debt by July

AUTHORS Geert De Lombaerde


AUTHORS Geert De Lombaerde
Gibson Brands has laid off more than 15 people at one of its Nashville plants as it aims for a big debt refinancing needed by mid-summer.

The cuts were made Monday at the Gibson Custom Shop operation on Elm Hill Pike and affected a number of senior workers, including some supervisors.


https://www.glassdoor.com/job-listing/general-labor-gibson-custom-gibson-brands-JV_IC1144541_KO0,27_KE28,41.htm?jl=2386440903


^^ Observe "Luthiers" need not apply - but if you are an "Adjuster" who can read a micrometer , you are in.


Gibson CEO Henry Juszkiewicz said the staff reductions are "part of broad initiative throughout the company to prepare for our refinancing," which calls for Gibson to retire $375 million in five-year senior secured notes before July 23. If the company cannot hit that deadline, at least $145 million in loans also will come due.
a spring cleaning of sorts"
https://www.nashvillepost.com/business/music-business/article/20993464/gibson-ceo-confident-in-refi-prospects-amid-spring-cleaning

to help his cause. Those efforts include trimming Gibson's portfolio of consumer electronics brands — the company has since sold music mixing software subsidiary Cakewalk to Singapore-based BandLab Technologies — and cutting costs elsewhere.

Juszkiewicz said the Gibson Custom operation still employs about 100 people in all, although not all of those workers are based in Nashville.

Gibson Custom Shop was launched about 20 years ago and makes "painstaking re-creations of prized vintage instruments" as well as signature models for players including Pete Townshend of The Who and Zakk Wylde of Black Label Society. The division's website lists guitars that range in price from $3,999 to more than $20,000 for a replica of a Peter Frampton "Phenix" 1954 Les Paul Custom.

---

https://www.nashvillepost.com/business/music-business/article/20993464/gibson-ceo-confident-in-refi-prospects-amid-spring-cleaning

Gibson CEO confident in refi prospects amid 'spring cleaning'
Report: Q3 revenues fell 22%

AUTHORS Geert De Lombaerde
Gibson Brands' majority owner and CEO is adamant he will be able to secure the new financing necessary to repay at least $375 million in debt maturing this summer — and is "battening down the hatches" to help his cause.

Henry Juszkiewicz told the PostWednesday his push to refinance $375 million in senior secured notes that will mature in early August includes the sale or closure of several brands under the umbrella of the iconic Gibson brand.

"It's a spring cleaning of sorts," Juszkiewicz said of a five-year plan he's circulating to potential investors who would repay the senior notes as well as up to $185 million in other debts. Gibson has stayed current on its obligations — it made a $16.6 million interest payment on the notes last month — but several observers have said the company
will struggle to secure the large amount of financing it needs before its summer deadline.

Look for the bulk of cuts that might help that process to come from Gibson's electronics division, which Juszkiewicz built up this decade via a series of acquisitions and which now accounts for two-thirds of sales. Company executives in November said they would get rid of their Cakewalk audio software unit, and Juszkiewicz on Wednesday said other "tiny little companies" that were part of the $135 million purchase in 2014 of Woox Innovations from Philips also will go. He singled out small DVD drives as a business line that isn't worth Gibson's time at this point.

Juszkiewicz is in spring cleaning mode because Gibson's financial results likely won't convince a lot of backers to step forward. Trade publication Debtwire reported this week that Gibson in the last three months of 2017 produced $18.7 million in so-called restricted EBITDA — which excludes the company's holdings in Japanese electronics company TEAC — on sales of $256 million. Those numbers were down 45 percent and 22 percent from the figures of the year before, Debtwire wrote.

The company's consumer electronics business saw third-quarter sales slide 28 percent and its EBITDA more than cut in half. Its historical music instruments division, on the other hand, posted higher operating earnings on sales that fell 7 percent to $77 million.

Juszkiewicz didn't want to discuss specific financials, saying those are supposed to stay confidential for bondholders. And he is confident that the third-quarter numbers aren't deterring potential lenders.

"We're talking to people who could write us a check tomorrow," Juszkiewicz said. "I think we'll have much more attractive offers to look at."

Juszkiewicz acknowledged that he might be called on to surrender some of his equity in Gibson in the coming months. While not a delightful prospect to the man who bought the company in early 1986 with President Davis Berryman, such a scenario would be far more attractive than one Bloomberg outlined earlier this week. Citing unnamed sources, Bloomberg said a group of bondholders is pushing for a restructuring — likely in bankruptcy court — that would oust Juszkiewicz and other top executives.

"The bondholders and the CEO are just not on the same page as to who will control the equity," Reshmi Basu, an assistant editor at Debtwire, told the Post.

Juszkiewicz also told the Post Wednesday that the electronics business continues to be hurt by supply shortfalls and cited two main reasons. The first is that Gibson is "operating on a low cash budget" and the second is a tightening of conditions by Chinese suppliers who are facing tighter financial conditions since Moody's Investors Service downgraded China's overall rating last year.

"We're working with what we have and improving the business nevertheless," he said.

admin

https://www.inc.com/jay-jay-french/jay-jay-french-goes-behind-music-for-an-exclusive-interview-with-gibson-guitar-corp-ceo.html

How the Gibson CEO Is Trying to Save the Legendary 116-Year-Old Guitar Company
In a rare one-on-one conversation, Henry Juszkiewicz talks about Les Paul, bankruptcy, John Travolta, and more.
 
   By Jay Jay French
Founder and lead guitarist, Twisted Sister@jayjayfrench


 

CREDIT: Getty Images
 
Amid rumors of an impending Gibson Guitar Corp. bankruptcy. I wanted to see if I could get behind the headlines and connect you, the Inc.com reader, with Henry Juszkiewicz, chairman & CEO of the Gibson Guitar Corp.

I have been a Gibson Guitar devotee and collector and, as an artist, had my own guitar line through Epiphone guitars, a Gibson owned guitar company, for several years.

But first some important background information:

The Gibson Mandolin-Guitar Manufacturing Co., Ltd. was established in 1902. The guitars carrying the Gibson brand have been and currently are all manufactured in the United States. In 1952, after partnering with jazz guitar legend Les Paul, Gibson started to manufacture the Les Paul model guitar which has become one of the most legendary and iconic guitar models in the history of recorded popular music.

In 1986, after a period of what is considered a dark decade of poor quality control and mismanagement, Henry Juszkiewicz, Dave Berryman and Gary A. Zebrowski bought the Gibson company three months short of closing its doors permanently and have, since then, brought the quality of the Gibson, and Epiphone guitar brands specifically, back to their former glory.

Over the last several years, Gibson--through Juszkiewicz's entrepreneurial guidance--has moved beyond the acquisition of musical instrument companies by acquiring several Japanese consumer electronics companies such as TEAC Corporation (Teac and Esoteric brands), Phillips, Cerwin Vega, Stanton, as well as professional audio equipment from KRK Systems and TEAC Corporation/TASCAM.

What follows is an excerpt of my exclusive interview with Henry Juszkiewicz that took place in February 2018.

Jay Jay  French

Henry, how close is the Gibson guitar company to filing for bankruptcy?

Henry Juszkiewicz

Gibson is not going to file for bankruptcy. It's not our intention.

We're in compliance with all the bonds. We've paid interest, and it is our intention to refinance these bonds. We have a very good investment bank called Jefferies that has been working on refinancing for well over a year. They're very confident that we're going to refinance the business. That's normally what happens, because bonds always expire, and there's an effort to find new investors and to refinance the business.

We've talked to lots of people already who are potential investors. Gibson guitars are doing really well. Our sales have grown. Our profitability has increased in the guitar business and we expect to have an even better year. We're just going through our 2019 model year. Guitar Center (the nationwide retail chain) is back in a big way and our numbers with Guitar Center are spectacular for the last few months, well above the last year. And, things are going generally well with the MI (musical Instrument) business. Our KRK studio monitors are doing really well. We're still number one with Yamaha and others. The consumer electronics side (Onkyo, Pioneer, TEAC, Esoteric, Cerwin-Vega) has been challenged since we bought it in 2013.

J.J.F.

Does that cover the TEAC, Esoteric and Philips lines, or do each one of these companies have their own particular issues?

H.J.

Yeah. TEAC is really independent. I mean, they're a publicly traded company in Japan. You know, they are what they are. I can't say they're spectacular, but they're doing okay.

J.J.F.

When you originally used the financial tools to infuse the company with capital, did you ever think this was possible?

Was this a scenario that you even could have imagined where you are now?

H.J.

You know, sure. I've been in trouble for 30 years. I think I have a very difficult business assignment, and I knew that the CE (consumer electronics) business was going to be a lot of work. While it wasn't as bad as Gibson was when we took it on, it wasn't a company that was really solid. It needed a lot of work and the only difference is that I thought management had some time.

The currency crisis that was caused in the first year really kind of derailed that plan. And it ended up being a whole lot more work than anticipated. I'm an entrepreneur, so disaster can always come. That's the nature of risk. If you knew what the disaster would look like, then it wouldn't be risk. Any time you do something that is challenging, it's always possible for something to happen.

J.J.F.

What is the price point of guitar sales that is the most effective, and is the premium, high-end market pretty much over?

H.J.

When we bought Gibson, everybody said the guitar was dead and keyboards would take over. Do you remember that?

J.J.F

Yes, it was the early, early '80s.

H.J.

Yep. You know, it was all electronics. The Japanese electronics companies were making these MIDI [Music Instrument Digital Interface] guitars. Everything was electronic and it would take over all acoustic instruments. It would be dead. And every [guitar] store [in the U.S.] was underwater with guitars. I started with that.

But the death of guitar sales didn't happen. I did really well with guitars. They didn't die. They actually did really well. And then there was John Travolta and disco music, and that was all the rage. Everybody was saying, "Guitars are going to die." And they didn't die. They did really well through that period. People are still playing the Beatles. In fact, the kids are listening to older music [produced] before they were born than ever before. Music is, because of streaming, much more eclectic.

So the guitar business and the music instrument business, in general, is a plus or minus 3 percent growth business since the 1900s. It's a very stable business. It continues to be. Our industry is up 3 percent, which is a big growth for our business. Guitar sales are up.

J.J.F.

What is the hottest price point for a guitar, in your estimation?

H.J.

Based on what I'm seeing, over 3,000 bucks. The second thing is, high-end [electric] guitars are hot. It's just that there aren't a lot of them in terms of units.

J.J.F.

I play Epiphone guitars exclusively live. I've been playing them for over 15 years. And I happen to think they're amazing guitars, and they're priced at some unbelievable street prices for the quality, which are about $499. I would think, numerically, you must sell boatloads of that stuff. Am I correct?

H.J.

Oh, yeah. We probably sell three or four to one. Epiphone to Gibson brand. But we make more money on the Gibson side. We are priced effective. The whole point is we want to give really great value to the consumer, right? And we do. Dave [Berryman, president of the Gibson Guitar Corp. and head of the Epiphone duitar division of Gibson] is just doing a bang up job and the guitars keep getting better.

J.J.F.

Henry, is that era of the six, seven, eight, nine thousand Collector's Choice Les Paul model [a super-premium, Gibson custom-shop recreation of legendary Les Paul 1950's models] pretty much done or do you think there's room in that era still?

H.J.

If Jerry Seinfeld buys a guitar, it's not going to be a $500 Epiphone, right? He's going to buy high-end stuff. The point being, there's a lot of high end--it's a beautiful piece of art and it has history to it. That connection is forever.

J.J.F.

If you hold on, is the future about acquiring more companies outside of the music instrument business?

H.J.

Right now I'm focused on making this company really perform well so we can do best in the field. I'm not even thinking about that. I am focused on today.

J.J.F.

You saved this company [Gibson] from the Norlin era once already. Is there a future for Henry Juszkiewicz at Gibson?

H.J.

Yeah, I think there is. I have to pass it on to another generation of people to do cool things with. I'm going to die being in the guitar world, but if I do the brand justice, I have to bring up fresh young management with their own aggressive ideas.

That's what I want to do. As long as I can be in there, I'm going to be in there. But for the company, I got to bring in new blood. And that's my intention.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.
 
PUBLISHED ON: FEB 27, 2018

admin

http://iheartguitarblog.com/2018/02/what-should-gibson-do.html#sthash.S1nZ0Rky.dpbs
What Should Gibson Do?
Posted onFebruary 27, 2018AuthorPeter Hodgson


A few people have asked me what I think should happen to Gibson if they can't refinance their debt and they need to restructure. I used to write for Gibson, I own a Gibson, and everyone I worked with there was great.

But the brand is clearly off track. The overwhelming public perception is that Gibson's management is pushing too hard towards the future at the expense of the past. It's true that guitarists today don't necessarily want exactly what players were buying in 1954. But too much deviation from what people expect of Gibson is a turn-off for many players too. Gibson's current approach is a bit of a re-set from a few years ago when every Gibson USA model was shipping with robot tuners, but public missteps like the Firebird X (which was actually a really fun and great-playing guitar if you ever got a chance to play one) are still fresh in many players' minds. Add to this Gibson's quite public issues with imminently due financial arrangements, and it looks like something has to change.

So if Gibson can't refinance that debt to its satisfaction and has to downsize in order to continue, where should they start?

To begin with, I think they should sell off non-guitar brands. So long, Philips. See ya, KRK. Toodle-oo, Baldwin. Take a walk, Cakewalk (actually, Cakewalk was just sold last week). Catch ya, TEAC. Onkyo, Slingerland, TASCAM, etc etc etc. It was a cool idea, but that debt won't wait forever, and rightly or wrongly there's a feeling in the guitar community that Gibson leadership is spreading itself too thin over too many brands. Guitarists tend to buy with their gut; if they feel queasy, that sale won't be easy.

Sell Steinberger. Headless guitars are way in vogue right now but Gibson isn't really doing anything particularly spectacular with the brand. Perhaps the sale of the division would net more than current guitar sales.

Sell Valley Arts Guitar. A once-great brand that has been buried at Gibson but could easily compete with the Suhrs and Andersons of the world in the right marketing hands. Remember when Steve Lukather and Larry Carlton played Valley Arts? They were highly desirable guitars in the late 80s and early 90s. But the brand doesn't belong at Gibson.

I don't think Gibson needs to sell Kramer, but I do think they need to put some serious effort into the brand. Kramer should be competing in the same space as Schecter, Charvel, Jackson, ESP, Ibanez and other brands like that. But they're not. The website's most recent news item is from 2015. The guitar and bass range has been stagnant for a long time.

Either sell Tobias or take it seriously. That brand could compete with Mike Lull, Mayones, Lakland, Sandberg, MTD of course... instead you never see them anywhere played by anyone any more. And the Tobias brand is under the Epiphone banner, which doesn't help its prestige.

You own Maestro. Where is it? Oh yeah, you're using the brand name on $65 acoustic guitars at Walmart instead of to sell thousands of fuzzboxes and Echoplexes to a hungry market. The players are there and they want the gear to be readily available. They'll even pay more for it if it's handmade and boutique.

Oh and hhey how come there are dozens of companies making resonator guitars but you own the Dobro and are just using it to make sub-$1000 models under Epiphone, as far as I can tell? With the current continued strength in country, Americana and folk, plus an underground blues scene that is stronger than folks realise until it sells out Bluesfest, supporting Dobro properly seems like a no-brainer.

So what about Gibson itself? What do I think they should do? Well, for starters, people do still want more or less traditional guitars from Gibson. It feels to me that Gibson USA should focus on making Les Paul Standards, Customs, ES-335s, SGs, Explorers... the bread and butter, maybe updated a little for neck strength and playability because it's not 1958 any more, but not robot Transformer guitars that you need to charge and proprietary electronics that prevent you from swapping pickups.

But there is a place in the world for Gibson innovation. I truly believe Gibson has done some great things, especially when you pick up a Les Paul Standard HP with its compound radius fingerboard and versatile electronics. So take that spirit of adventure and create a new division. Maybe call it Gibson Modern, explore the futuristic stuff, but be realistic about demand from customers and expectations on dealers. Keep its R&D budget separate from Gibson USA so you're not jacking up Les Paul Standard prices to pay for the development of LCD screens instead of fretboard inlays or whatever. Don't lose the passion for progress, but don't force the buyer into it. Again, guitarists buy with their gut, and they'll accept small degrees of change at a time but not rapid swings.

As for Epiphone: keep on doing what you're doing! Epiphone generally seems to be very strong. Maybe consider – gasp! – letting Epiphone use the Gibson headstock. It might be time. It might be the deciding factor between a buyer choosing an Epiphone Les Paul over an LTD Eclipse.

Also, review your social strategy: don't be so scared to tag OEM partners or feature smaller artists in social posts. Artists and partners want to work together to help you and them sell stuff.

Finally, you know you have a quality control issue. I've seen guitars come out of the box at stores then go straight back because of some flaw. When you find a great Gibson, it's unbeatable. Be as strict on QC as PRS and Yamaha, who are notoriously tough on themselves.

Anyway, whatever happens, I hope the folks I worked with at Gibson are okay, I hope the workers have stable jobs and I hope every Gibson that leaves the factory is as perfect to play and listen to as mine is. Henry Juszkiewicz has vision and ambition, but perhaps he needs to back his foot off the gas just a little bit and let the market tell him what Gibson needs to be, then adapt his ideas and drive to that, instead of trying to force market changes, as we saw with the 'all robot tuners' situation a few years ago.

And if Gibson ever need my writing skills again, I'd do it in a heartbeat and help to spread the word about what I hope is a very bright future, because if you've played a great Gibson, you would know that this company is still capable of making some of the greatest guitars in the world.


Mrchevy

Quoted comment....
" Maybe consider – gasp! – letting Epiphone use the Gibson headstock. It might be time. It might be the deciding factor between a buyer choosing an Epiphone Les Paul over an LTD Eclipse."
This would likely add at least 2 guitars to my arsenal. I'm not a Gibson snob that would NEVER own an Epiphone guitar. I've played some nice ones and would love to pick up an Epiphone Les Paul to set up with a GK pickup or Fishman Triple Play and have no qualms about modding it since it would likely be a nice guitar for $500-600. But I just don't like the look of the Epiphone head stock. A Gibson style headstock that has Epiphone screen printed or inlayed on it would not bother me though. In my case, they won't loose a sale of the more expensive "GIBSON" because I want a guitar to mod, and I'm just not interested in spending that much for a modding guitar, but I do love my Les Pauls. If I buy a LP, I want it to look like a LP.
Gibson Les Paul Custom
Epi Les Paul Standard
Gibson SG 50's prototype
Squire classic vibe 60's
Epi LP Modern
Epi SG Custom
Martin acoustic

Princeton chorus 210

GT100
GR-55
Helix LT
Waza Air Headphones
Boomerang III

And, a lot of stuff I DON'T need

Mrchevy

Counterfeiters are gonna Counterfeit. Fender and Squire use the same headstocks... whats the difference. Stamp the serial numbers from now on... Epi's start with E#######, Gibsons start with G########.
Gibson Les Paul Custom
Epi Les Paul Standard
Gibson SG 50's prototype
Squire classic vibe 60's
Epi LP Modern
Epi SG Custom
Martin acoustic

Princeton chorus 210

GT100
GR-55
Helix LT
Waza Air Headphones
Boomerang III

And, a lot of stuff I DON'T need

reingarnichts

"Those guitars from the 50s are what the purists want, but we have to have something new and exciting."

Innovation is something dearly hated in guitar circles.

I have two (cheap) Gibsons - an SG Studio and a Melody Maker Special (2x P90s, kind of Les Paul Special).
Both have one of those very sensitive "faded" finishes and accumulate a lot of dings and scratches very fast.
Excellent guitars for the prices I paid, very classic, very simple.

BUT:
Innovation might be good. Let the strings run in a straight line at the headstock and you don't need a robot tuner to get control of your g-string ;) .
Offer nice Vibrato units (2-point Fender-style for my taste...) and a wider range of pickups.
Instead they throw out the same Les Paul every year in a different color...

The problem for me is that there are a lot of guitars out there, but only few of them are really thought as "instruments" (ergonomics, etc...).
Most are objects of fashion and style.

It's probably time to support my local luthier ;)

admin

#41
https://www.jayweller.com/gibson-guitar-bankruptcy-something-to-fret-about/
https://www.jayweller.com/gibson-guitar-bankruptcy-something-to-fret-about/
Rumors of financial difficulties have been circulating for some time. Last year, the company stopped further development of its "Cakewalk" music software and sold its Memphis, TN factory. Additionally, Gibson recently gave up its Nashville, TN warehouse which it had occupied for more than thirty years.These moves signaled to industry analysts that something ominous might have been afoot.In a recent report, one analyst said, "Over the years, Gibson has expanded into products and categories that haven't performed well. Their debt has mounted and they may be running out of time – rapidly."

Gibson Brands' revenues exceed $1 billion annually. The company's debt has proven to be so burdensome in recent years that such revenues – along with the expansiveness of its family of brands and associated businesses – are not sufficient to service the debt.

The company's most crucial immediate problem that may be signaling bankruptcy focus on looming debt payments that are due in late July of this year – a debt payment on $375 million in senior secured notes comes due on July 23, 2018. Failure to make that payment, which at present seems likely, automatically triggers the requirement for Gibson to pay an additional $145 million.
The Nashville Post said in a recent report on the company, "Commentators noted the chances of refinancing in time (to avoid falling into bankruptcy) look 'slim'...". Bond holders have become increasingly uneasy in recent months due to the company's seeming inability to service its debt and, according to some, their perception of "a lack of clarity" with regard to the company's future. In 2017, Gibson obtained an emergency $130 million loan from GPS Capital Partners. That move proved to be a source of additional concern for the company's creditors.

Financial analysts are pointing out that the recent departure of Gibson's Chief Financial Officer, Bill Lawrence, after less than a year on the job, was a sign that all was not well with the company. Lawrence's departure came just six months before the bond debt of $375 million was coming due and while the company was struggling to find a sufficient solution, temporary or long term– such as restructuring debt or filing for some form of bankruptcy relief – to forestall further problems and keep the company afloat.

In a move that surprised some industry observers, Gibson Brands announced on Friday, February 16, 2018, that it had hired Benson Woo as Chief Financial Officer to replace the departed CFO Bill Lawrence. Woo is a company rehire, having previously served as CFO for several months in 2016. Woo, holder of an MBA from Harvard and an undergraduate degree from M.I.T., started his career in finance at General Motors before moving on to a succession of jobs in several companies that were more entrepreneurial in nature. Statements on the appointment of Woo by Gibson Brands' CEO and others were tepid at best.

As the prospect of bankruptcy looms, informed sources report that, "Chairman and Chief Executive Officer Henry Juszkiewicz is thought to be in a race against time to decide whether to exchange the company's debt, look to try and pay it off using his equity, or try to declare the company bankrupt." Gibson, within the past two months, hired the large global investment bankJeffries to help with the current seemingly dire financial situation while Juszkiewicz and his associates continued to seek alternatives to bankruptcy and the possible loss of his company.
Company officials remain somewhat optimistic in the face of the prospect of bankruptcy. In a statement issued earlier this week, CEO Juszkiewict said that the company "... has met all current obligations to the bondholders". He went to say that Gibson "...is working with an investment bank (Jeffries) to find an alternative credit facility." In an additional statement issued by the company, officials said, "...we are confident that all bonds can be refinanced in the ordinary course of business."

The core business of Gibson Brands (including subsidiary companies such as Philips) is the manufacture and sale of professional audio equipment and a wide range of musical instruments under a number of brands. Juszkiewicz's recent statements throw shade on his self-professed optimism when he admits that "...both regions (i.e. Gibson brands and subsidiary companies) are profitable but are performing below the level of success we saw several years ago." (emphasis added)

When a Nashville-based financial reporter asked this week about the financial difficulties facing his business and what alternatives may be available to him, Henry Juszkiewicz responded, "We have been monetizing assets like stock holdings, real property, and business segments that could not achieve the level of success we expected. By monetizing these assets, we can reduce debt and generate funds to contribute to business segments that are thriving." The statements of Juszkiewicz did not make mention of what business segments of the parent company might be trimmed or scaled back; likewise, the CEO did not, at any point, mention bankruptcy as a possible alternative despite wide-ranging speculation on all fronts that bankruptcy may be "just around the corner".
Remaining optimistic, Juszkiewicz concluded his statement, saying: "With the refinancing and improvement in operating performance from the actions that we are rolling out, we expect the company to be organized for success and growth for years to come."

Despite such optimism the prospects of CEO Juszkiewicz may not be too bright, especially if the company fails to make timely payment on the senior secured notes in question. A senior credit officer at Moody's Investor Services opined earlier this week, "Failure to repay could even result in the departure of CEO Henry Juszkiewicz. If this ends in bankruptcy, he will give up the entire company." For someone who has invested thirty years of his life in an iconic company like Gibson Brands, Inc., such a fate would be seen as disastrous.
In related developments, musicradar.com is reporting that "(Gibson Brands) looks to be changing direction; this year Gibson Brands attended the Consumer Electronics Show rather than the more customary NAMM Convention in order to focus on its Philips audio brand – the ambitious group also plays host to audio companies TEAC, Tascam and Onkyo."
This week, Gibson Brands is coming up on its third-quarter shareholders' meeting where it will report the company's fiscal third quarter figures (and related financial woes and prospects). The Nashville Post said, "Bond owners will be watching for an improvement in the company's electronics business, which has been built up in the past few years via debt acquisitions but has seen sales slump of late. Still, even a solid turnaround on that front won't be enough for Juszkiewicz to avoid difficult conversations." (emphasis added) According to all of the recent reports surrounding Gibson's finances and difficulties, such "difficult conversations" may likely include conversations centering on bankruptcy.

The company's creditors remain pessimistic and concerned despite the recent optimistic and forward-looking statements by the company and its CEO. An online digitalmusicnews.com article by Paul Resinkoff, dated February 21, 2018, – titled, "Gibson Guitar Has 150 Days Until Bankruptcy – and a Brewing Internal War" – is illustrative of such pessimism and concern.
Resinkoff begins: "As the financial situation surrounding Gibson Guitar deteriorates, activist creditors are now taking matters into their own hands. The results could be the heads of Chairman and CEO Henry Juszkiewicz and top executives like CFO Benson Woo..." To drive home the point of many pundits and observers, Resinkoff emphasized that "multiple analysts and investors" consider the risk of a Gibson default to be very high, "...with bankruptcy a likely outcome."

Gibson pushed back on speculation of an "internal war" as noted by Resinkoff. Bloomberg, however, reported earlier in the week that the secured debt holders are in no mood for "push backs" or excuses. According to the Bloomberg report, concerned and angry investors are strongly pushing for "new leadership" (i.e. the ouster of Juszkiewicz and other top executives) and threatening to drive the company into bankruptcy.

The so-called "activist investors" might be angling for a takeover of the company, something that Juszkiewicz recently alluded to as "suspect intentions". According to Bloomberg, the investor group of activists holds over two-thirds of the bonds that are soon due for repayment. Resinkoff calls the bondholder clout "serious leverage" and opines that is may be sufficient to force the CEO to make serious, long-term changes that may include his own ouster.

All outside reports say that the disgruntled and concerned investors are pessimistic and skeptical that meaningful changes can occur in time to avoid bankruptcy or some other major change for the company. While Juszkiewicz remains hopeful of securing nearly $400 million in new loans to pay off the bonds, his adversary investors "...don't expect earnings to be strong enough to attract new money for a refinancing...:". One reason to doubt that new creditors will come forward is the continuing presence and involvement of company CEO Henry Juszkiewicz.
The Resinkoff report stated that a July 23, 2018, "full-blown default" would "trigger a separate, 'springing lien' in the amount of $185 million." Such lien figure has been previously reported to be $145 million, $40 million less that the current reported figure (which may be a typo in the report instead of the correct amount of the "springing lien").

Gibson's financial difficulties are not as new as they may seem to be. Reports of such difficulty go as far back as August, 2017, when Moody's Investor Services, Inc. downgraded Gibson Brand's corporate family rating and raised its probability of default. Moody's cited "weak operating performance. 'liquidity pressure' from approaching (bond) maturities, and an 'unsustainable' capital structure." The downgrade was to a "Caa3" rating which one Wall Street commentator said, "falls nine notches into junk territory." Reports show that Gibson's debt-to-earnings ratio is approximately 10x which many consider to be an ominous indication. Several years ago, Moody's did a similar downgrade for reasons that are not clear (or of consequence) today.
Financial straits might not be the only reason – or reasons – why Gibson Brands, Inc. is in trouble today and possibility facing bankruptcy.

Often times, what seems clear on the surface (i.e. Gibson Brands financial troubles being attributed to under performing divisions, heavy debt that they are unable to cover from company revenues and assets, and a horrible debt-to-income ratio) may be something entirely different under the surface. Poor management and even worse management decisions may be somewhat at fault as well. A toxic corporate culture and a CEO who is not worker friendly and is known to have an explosive temper and incredibly "short fuse", and related issues may be other reasons why Gibson Brands, Inc. is facing imminent bankruptcy or a similar fate.

Not long ago – in June, 2015 – an online article appeared on the website gawker.com. Titled, "Gibson Guitar is a Remarkably Unpopular Company", and penned by Hamilton Nolan, a writer @Gawker Media, the article fairly slams Gibson, its CEO, and the quality of their products and product lines.
The lengthy piece is instructive and well worth consideration as another possible reason why Gibson may be headed for bankruptcy or other corporate realignment.
The article begins – without mention of Gibson's current financial difficulties – as follows: "The iconic guitar company Gibson faces seemingly endless troubles, which include an easily enraged micromanaging CEO and a product line perceived as shoddy and overpriced. Based on what we've heard lately, it is not a great employer or maker of guitars". (emphasis added)
Much of what is stated in the piece is based upon input from Gibson employees, former employees, and customers. Nolan, after hearing a "trickle of rumors about mismanagement at Gibson...", sought comments and contributions from people he thought might have some knowledge of Gibson's corporate culture, management, and the like. He found that, on balance, Gibson faced two "main problems":

Problem 1: Company employees, by and large, hate the company, in general, and CEO Henry Juszkiewicz, in particular
Problem 2: Gibson customers "think they'recrap" (referring to Gibson products)
The following excerpt from Nolan's article, though lengthy, is worth the read. The story is told by a prospective new hire who had traveled from the UK to Nashville to interview for a social media manager position with Gibson...

"I just got a glimpse of what felt like the world's most baffling hiring process. 'The psychometric test takes approximately 3 hours to complete...' (she was informed by email). (She responded): 'I don't have time for a 3-hour test... Also, please can I have a job description because you haven't actually sent me anything about the role, and I'd really rather know exactly what you expect before I succumb to being tested for THREE WHOLE HOURS' (to which she told Nolan in an aside – 'I wasn't quite so stroppy...'). 'Anyway...HR invited me to meet with three different people... in one day... I hadn't planned to spend the majority of a day in a corporate cellblock...' (She continued): "I'll admit I forgot about the test when the CEO stepped into the gigantic conference room, if only because he was even more baffling. It was all I could do to sustain eye contact. The silver-haired, 70'ish man looked as though he was having some sort of epileptic fit in front of me as he blathered on and on about his history in and before he started with Gibson. His eyes were rolling around the room, landing everywhere but on me. I wasn't entirely sure he was sober.'

Woman: 'So, do you have a social media strategy already?'
CEO: 'Oh yes'
Woman: 'I'd like to know what it is
CEO: 'I bet you would'..."

And... so it went with Henry Juszkiewicz...

The woman concluded: "As he spoke, the words I read on Glassdoor.com rushed back to me: "Run, don't walk away from even considering working here. The CEO is HORRIBLE – mean, nasty, uber-controlling. If anyone in the company dares to have a different idea than his, you can pretty much guarantee that they will be fired – on the spot."
The woman in question? She did not take the job...
Another respondent who had experienced the hiring process at Gibson Brands, offered this:

"I saw your... post on Gibson and laughed my ass off. I worked for Henry in 2012 and shared much the same experiences that others detailed. I lasted about 9 months before I had to bail and that was longer than about 20 other guys that year. After you join, co-workers admit that 'you are the class of 2012/2013/2014...etc.,' and that you are basically toast. Great way to treat people. Move them and their family to Nashville and then trash them. I found a way to stay in Nashville... However, I would never want to relive the sequence of events I lived through."

Customers (more than likely, former customers today) had similar highly negative comments when it came to rating Gibson's products. Many complained that the products were "shoddy", too expensive, and "outdated". One said, after stating his complaints about quality, price, and "horrible quality control", "...I would never support them because the CEO is a total jackass... It's sad that a once iconic brand is run by such a terrible CEO. He is ruining the company."

So, today it remains to be seen whether or not Gibson Brands, Inc. will follow in the recent footsteps of other corporate icons (Toy's 'R Us, comes to mind) and fall into Chapter 11 bankruptcy. If recent reports are to be given adequate credence, bankruptcy is one of the more likely outcomes especially since angry secured creditors are tired of speculation and want answers to their central questions: "can Gibson meet its short-term debt obligations?", and, "what does the long-term future of the company look like if it does?" The answers may come sooner than company executives are fearing – sometime on or around July 23rd or in the weeks to follow.

Say, that Gibson pulls off a miracle (like obtaining over $400 million in new loans – in near-record time – to pay off the outstanding bonds totaling $375 million), what then? Will Henry Juszkiewicz remain in charge? Will under performing brands and divisions be scrapped so that a healthier company goes forward? Or, will a horrible corporate culture with the notorious Juszkiewicz at the helm be enough to sink Gibson over the long haul, financial woes and bankruptcy notwithstanding?
Most speculators would bet on the bankruptcy route and a Chapter 11 reorganization plan that might include the ouster of the current CEO (and others, such as CFO Benson Woo) and the sale of the once iconic music industry giant.

Whatever happens, stay tuned... probable answers should not be long in coming.

alexmcginness

Im so glad Im outside of this now being 63 years old. I have a great 1974 White Les Paul Custom that I bought new in 74,  and two Burst Replicas built out of wood from the mid 50s and two really nice Epiphone Flying Vs. If Gibson goes belly up ... so what? ( Except for those losing their jobs. )

Theres a ton of already built Gibsons out there. Just go look for one that you like and can afford and keep it and play it.

Im not seeing a problem here. Companies come and go.... C'est la vie!

VG-88V2, GR-50, GR-55, 4 X VG-99s,2 X FC-300,  2 X GP-10 AXON AX 100 MKII, FISHMAN TRIPLE PLAY,MIDX-10, MIDX-20, AVID 11 RACK, BEHRINGER FCB 1010, LIVID GUITAR WING, ROLAND US-20, 3 X GUYATONE TO-2. MARSHALL BLUESBREAKER, SERBIAN ELIMINATOR AMP. GR-33.

chrish

#43
 Gibson is synonymous with the history of rock and roll and the electric guitar.

Many people wish them success as a company but don't seem to be happy with the way it's running.

For example reading those want ads for someone to set necks where they say something to the effect that woodworking experience is desirable.

And Those ads come after a layoff off of experienced workers, most likely so they can hire cheap labor. But you get what you pay for and I have to wonder if the quality will suffer further degrading the Gibson product and name.

As a carpenter, customers often asked for a reduced hourly wages. We tell them, do you want our $20 an hour speed or do you want our $28 an hour speed.

And a contractor friend of mine has a motto that he prints on his business cards, " we'll get it right no matter what it costs you".

admin

#44
http://faroutmagazine.co.uk/gibson-guitar-ceo-henry-juszkiewicz-women-arent-comfortable-going-to-guitar-stores/

GIBSON GUITAR CEO HENRY JUSZKIEWICZ: "WOMEN AREN'T COMFORTABLE GOING TO GUITAR STORES"
FAR OUT STAFFFEBRUARY 28, 2018
NEWS1 COMMENT
Henry Juszkiewicz, the CEO of iconic brand Gibson Guitars, has been discussing the faults that have led to the company being on the brink of bankruptcy.

We've been keeping you updated on the sad news relating to the flailing profits of one of the guitar world's foremost manufacturers. First it was set for closure, then Juszkiewicz assured that the debt was run of the mill and then it seemed that the situation appears more likely a 'internal coup' in a bid to wrestle ownership.



Juszkiewicz, who has been the CEO of Gibson since 1992 having acquiring the company in 1986, knows all to well of the difficulties involved in retail, now more than ever before. Gibson, a brand that have been long time favourites for so many musicians, unveiled news last week that the company was struggling to meet its obligations on $375 million worth of debt. According to multiple analysts and investors, the default risk considered high and would likely result in bankruptcy.

Having already explained the battle against online retailers, Juszkiewicz moved to explain that the influence of rock 'n' roll and the end of 'neighbourhood' style shops has ultimately had a negative effect: "We've lost a lot of consumers," he said. "Women, by and large, aren't comfortable going to guitar stores."

[MORE] – Gibson Guitars: CEO Henry Juszkiewicz explains battle against online retail.

Reflecting on a change in direction, Juszkiewicz said in an interview with Billboard: "The issue for Gibson in retail is that the industry has gone into a really narrow customer focus. In the 50s, music retailers were neighbourhood family stores. If Johnny wanted to play an accordion, and Suzy wanted to play saxophone, there were full line stores. They weren't big, but they carried most instruments, sheet music even. It was a neighbourhood staple.

"Those days are gone, and those stores were in deep trouble when rock and roll came along. When that happened, guitars became extremely popular, and everyone became a guitar buyer if not player. That changed the retail quite a bit; even though it was still mom and pop shops, they also became more "rock" shops, and [the business] became much younger. It also became quite unprofitable.

[MORE] – Gibson Guitars Full Story.

"As that demand started to decrease in guitar – at this point in time, only people who already played were starting to be the only people actually buying guitars – stores lost their family roots and started concentrating on "real" players. They had to, but they hyper focused on those buyers, and started losing money. They couldn't pay their rent anymore," he added.

"I like to say, 'You know where the good music stores are? Look in a city's pornography district.' Sure enough, that's where [they] are. Well, parents with kids don't like to go into those areas to shop. Musicians don't have a problem going into those areas – there are usually a lot of hip clubs around there, too – but this is how the guitar business took a hard left, and left behind a lot of consumers. We've lost a lot of consumers. Women, by and large, aren't comfortable going to guitar stores. If you look around, you'll see a few, but if they are there chances are they're already musicians. You're not going to mom and dad; you're only preaching to the converted."

admin

QuoteReflecting on a change in direction, Juszkiewicz said in an interview with Billboard: "The issue for Gibson in retail is that the industry has gone into a really narrow customer focus. In the 50s, music retailers were neighbourhood family stores. If Johnny wanted to play an accordion, and Suzy wanted to play saxophone, there were full line stores. They weren't big, but they carried most instruments, sheet music even. It was a neighbourhood staple.

"Those days are gone,


Not here in my town

chrish

Quote "I like to say, 'You know where the good music stores are? Look in a city's pornography district.' Sure enough, that's where [they] are. Well, parents with kids don't like to go into those areas to shop. Musicians don't have a problem going into those areas"

Oh so that's the problem with Gibson's debt crisis, it's those darn pornography stores. ::)

admin

#47



Quote from: markophonic, post: 25931829, member: 16117Partnering with Rolling Stone to make 225 Parsons st. a music destination   :rolleyes:
http://wwmt.com/news/local/14-heritage-guitar-workers-off-the-job-as-company-heads-in-new-direction


QuoteRolling Stone Mag.  is partnering with Heritage to make the Kalamazoo factory a tourist destination.

My theory?
The founder of Bandlab  (Mr. Meng Ru Kuok) of Signapore is awaiting for the lowest price for Gibson Brands and plans to acquire it , along with Heritage Guitars  in August 2018 - and return Gibson Custom Shop production to Kalamazoo
Bandlab already owns Rolling Stone Mag, and recently purchased Cakewalk from Gibson   
https://vulcanpost.com/589375/bandlab-what-you-need-to-know/

https://www.bloomberg.com/news/articles/2016-08-25/billionaire-s-28-year-old-son-picks-digital-music-empire-over-palm-oil-riches

https://www.todayonline.com/singapore/rolling-stones-singapore-shareholder-wants-buy-magazine


https://en.wikipedia.org/wiki/Robert_Kuok
His grand-nephew, Kuok Meng Ru, is in the music retail industry, owning Swee Lee music company, and plans to purchase Rolling Stone magazine.[12]
https://www.sweelee.com.sg/
https://www.sweelee.com.sg/pages/about

https://www.digitalmusicnews.com/2018/02/28/gibson-guitar-vulture-acquisition/



https://www.digitalmusicnews.com/2018/02/28/gibson-guitar-vulture-acquisition/

Chinese Investment Group Considering a 'Fire-Sale Acquisition' of Gibson Guitar
Paul Resnikoff  February 28, 2018
Gibson Guitar 163s (photo: Larry Ziffle CC by 2.0)
photo: Larry Ziffle CC by 2.0

Near-bankrupt Gibson Guitar may be plucked by an overseas investment consortium, according to preliminary acquisition plans emerging.
As Gibson Guitar girds towards default and potential bankruptcy, some interesting acquisition possibilities are emerging.  That includes a Chinese investment consortium that is looking for strategic opportunities in instrument manufacturing, according to multiple sources speaking with Digital Music News this week.

+ Friday, February 16th: Gibson Guitar Faces Imminent Bankruptcy After 116 Years In Business
https://www.digitalmusicnews.com/2018/02/16/gibson-guitar-bankruptcy/


An advisor to the investment consortium briefly stated that the investment group does not want to be identified, and is 'considering many different investments at this time'.  Gibson is one of those options, though no further details were disclosed.

Another source stressed that the consortium is strategizing a possible buyout in the next few months, specifically the July/August timeframe.  That timing will help to ensure the lowest, most distressed 'fire-sale' price point, based on the due dates for multiple loan tranches.

Importantly, Gibson Guitar faces massive debt repayments at the end of July and into early August of this year, with nearly $525 million potentially thrown into default.

That situation offers the perfect 'vulture' or 'fire-sale' acquisition opportunity, especially if Gibson is forced into bankruptcy proceedings.
Just recently, a majority of Gibson's creditors attempted to forge a deal that would effectively sideline owner/CEO Henry Juszkiewicz, and hand majority control to the activist creditor group.  That bid was reportedly rejected, according to Bloomberg, with Juszkiewicz attempting to secure separate loans to retain ownership.

+ Gibson Guitar Has 150 Days Until Bankruptcy — and a Brewing Internal War

Good luck with that, say observers, especially given Gibson's abysmal credit ratings.  Just last week, Standard & Poor's downgraded Gibson to a CCC-minus rating based on low revenues and high likelihood of default.  Earlier, Moody's also downgraded the guitar maker, making it extremely difficult for the company to secure favorable loans in the coming months.

The Chinese investor group has 'ample cash for buyout,' one of our sources indicated.  But the group 'wants distressed deals,' meaning, a fire-sale.  Once purchased, the group is aiming to leverage the storied Gibson brand name to sell a lot more guitars.  The strategy involves more efficient manufacturing, better pricing, better distribution, and streamlined online retail sales and customization.

All of that would likely offer another blow to distressed instrument retailers in the U.S.
Just recently, Juszkiewicz lambasted guitar and instrument retailers for lacking imagination and failing to dazzle customers.  He also noted that guitars are largely stuck in a 1950s mentality, though Gibson's attempts to modify its core product have been unsuccessful.

"As you can guess [the investors] like the [Gibson Guitar] name but that's pretty much all they like," a third source with ties to the consortium explained.  "So it's 'say goodbye' to all the legacy retail relationships, the bad pricing, all the bad management.  The bankruptcy lets them clean that stuff out and start over — think total clean slate."

===
More likely BandLab

details
https://www.thegearpage.net/board/index.php?posts/25931874/

My theory? (pure speculation)
The founder of Bandlab (Mr. Meng Ru Kuok) of Singapore is awaiting for the lowest price for Gibson Brands and plans to acquire it - (along with Heritage Guitars ) in August 2018 and return Gibson Custom Shop production to Kalamazoo

--
https://localspins.com/kalamazoos-heritage-guitar-partners-rolling-stone-bandlab-future-music-venue-rehearsal-space/
QuoteHeritage Guitar inked a global sales and marketing partnership with BandLab Technologies. The announcement came as Heritage Guitar joined with the community and property owner PlazaCorp to mark the centennial of guitar building at its factory at 225 Parsons St. in Kalamazoo, Mich.

"To me, 225 Parsons is one of the most significant establishments in the history of modern music," said Meng Ru Kuok, CEO and co-founder of BandLab. "The world's finest American-made musical instruments were, and continue to be built in this legendary factory. From the moment I saw the iconic (Gibson) smokestack and had a chance to see the Heritage craftsmen in action, I knew that this was something that deserved a wider audience. Heritage Guitar's uncompromising approach to quality, as well as its commitment to their craft makes them stand out in the modern electric guitar marketplace. We are very excited to be a part of bringing Heritage into new markets and territories."



admin

#48


https://www.digitalmusicnews.com/2018/02/28/gibson-guitar-vulture-acquisition/

Chinese Investment Group Considering a 'Fire-Sale Acquisition' of Gibson Guitar
Paul Resnikoff  February 28, 2018
Gibson Guitar 163s (photo: Larry Ziffle CC by 2.0)
photo: Larry Ziffle CC by 2.0

Near-bankrupt Gibson Guitar may be plucked by an overseas investment consortium, according to preliminary acquisition plans emerging.
As Gibson Guitar girds towards default and potential bankruptcy, some interesting acquisition possibilities are emerging.  That includes a Chinese investment consortium that is looking for strategic opportunities in instrument manufacturing, according to multiple sources speaking with Digital Music News this week.

+ Friday, February 16th: Gibson Guitar Faces Imminent Bankruptcy After 116 Years In Business
https://www.digitalmusicnews.com/2018/02/16/gibson-guitar-bankruptcy/


An advisor to the investment consortium briefly stated that the investment group does not want to be identified, and is 'considering many different investments at this time'.  Gibson is one of those options, though no further details were disclosed.

Another source stressed that the consortium is strategizing a possible buyout in the next few months, specifically the July/August timeframe.  That timing will help to ensure the lowest, most distressed 'fire-sale' price point, based on the due dates for multiple loan tranches.

Importantly, Gibson Guitar faces massive debt repayments at the end of July and into early August of this year, with nearly $525 million potentially thrown into default.

That situation offers the perfect 'vulture' or 'fire-sale' acquisition opportunity, especially if Gibson is forced into bankruptcy proceedings.
Just recently, a majority of Gibson's creditors attempted to forge a deal that would effectively sideline owner/CEO Henry Juszkiewicz, and hand majority control to the activist creditor group.  That bid was reportedly rejected, according to Bloomberg, with Juszkiewicz attempting to secure separate loans to retain ownership.

+ Gibson Guitar Has 150 Days Until Bankruptcy — and a Brewing Internal War

Good luck with that, say observers, especially given Gibson's abysmal credit ratings.  Just last week, Standard & Poor's downgraded Gibson to a CCC-minus rating based on low revenues and high likelihood of default.  Earlier, Moody's also downgraded the guitar maker, making it extremely difficult for the company to secure favorable loans in the coming months.

The Chinese investor group has 'ample cash for buyout,' one of our sources indicated.  But the group 'wants distressed deals,' meaning, a fire-sale.  Once purchased, the group is aiming to leverage the storied Gibson brand name to sell a lot more guitars.  The strategy involves more efficient manufacturing, better pricing, better distribution, and streamlined online retail sales and customization.

All of that would likely offer another blow to distressed instrument retailers in the U.S.
Just recently, Juszkiewicz lambasted guitar and instrument retailers for lacking imagination and failing to dazzle customers.  He also noted that guitars are largely stuck in a 1950s mentality, though Gibson's attempts to modify its core product have been unsuccessful.

"As you can guess [the investors] like the [Gibson Guitar] name but that's pretty much all they like," a third source with ties to the consortium explained.  "So it's 'say goodbye' to all the legacy retail relationships, the bad pricing, all the bad management.  The bankruptcy lets them clean that stuff out and start over — think total clean slate."



https://localspins.com/kalamazoos-heritage-guitar-partners-rolling-stone-bandlab-future-music-venue-rehearsal-space/
QuoteHeritage Guitar inked a global sales and marketing partnership with BandLab Technologies. The announcement came as Heritage Guitar joined with the community and property owner PlazaCorp to mark the centennial of guitar building at its factory at 225 Parsons St. in Kalamazoo, Mich.

"To me, 225 Parsons is one of the most significant establishments in the history of modern music," said Meng Ru Kuok, CEO and co-founder of BandLab. "The world's finest American-made musical instruments were, and continue to be built in this legendary factory. From the moment I saw the iconic smokestack and had a chance to see the Heritage craftsmen in action, I knew that this was something that deserved a wider audience. Heritage Guitar's uncompromising approach to quality, as well as its commitment to their craft makes them stand out in the modern electric guitar marketplace. We are very excited to be a part of bringing Heritage into new markets and territories."

Heritage Guitar hosted a daylong celebration of 100 years in Kalamazoo, Mich., on Sept. 9.
Heritage Guitar hosted a daylong celebration of 100 years in Kalamazoo, Mich., on Sept. 9.

Added Heritage Guitar owner, Archie Leach: "Since we joined forces with the original founders two years ago, I've been working hard with the team to improve working conditions and increase efficiency while still maintaining traditional methods and the handcrafted beauty that Heritage Guitar is known for. To us, this is the next logical step in building a sustainable business that can hire more people and ensure the specialist knowledge of Heritage stays in Kalamazoo. We are delighted to be working with a global partner who not only can help support our global sales and marketing efforts but also loves and understands our product deeply. We want more people to know about Heritage, about 225 Parsons and about Kalamazoo and I'm confident that with Meng and his team onboard we can spread the word of Heritage even further."

"When my cofounders and I started this company 32 years ago, we had an idea to build the best handcrafted guitars in the USA," said Jim Deurloo, founder of Heritage Guitar. "Our guitars have been loved by guitar aficionados who heard about us through word of mouth or saw us at trade shows. I hoped that we could bring this vision to the world, and with this new partnership in place, we can continue to push awareness of our guitars and love of Heritage. Our new sales partner Meng and his team embrace our policy of quality first. They're a perfect fit for what we are trying to accomplish, as guitar lovers and sales people, to get more people playing Heritage Guitars around the world."


observe Red , White, Blue Les Pauls
http://fortune.com/2016/03/18/the-biggest-american-companies-now-owned-by-the-chinese/


https://www.bloomberg.com/research/stocks/private/relationship.asp?personId=4339939

https://www.sweelee.com.sg/collections/gibson

Rhcole

Great.  ::)
Gibson-branded guitars that equal the finest Chinese guitars in quality.
Epiphone guitars with the Gibson name at 4X the price.