Home https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Business https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Guitar Center Files Bankruptcy Chapter 11

Guitar Center Files Bankruptcy Chapter 11

The 61-year-old company – the largest retailer of musical instruments in the United States – had tried to stay afloat during the coronavirus pandemic by offering virtual music education. But the Guitar Center was forced to close many of its stores in March during nationwide lockdowns, and it struggled to get customers to buy instruments as the economy headed south.

The Guitar Center has 269 locations, many of which are in malls that had struggled long before Covid-19. Foot traffic in malls has declined, and stores like the Guitar Center, which relies on people making discretionary purchases, have been among the hardest hit this year.

The company said in its bankruptcy filing that it received up to $ 1

65 million in new equity investments, and lenders agreed to reduce the company’s debt by nearly $ 800 million.

The company’s primary owner, Ares Management Corporation, as well as the new equity investor Brigade Capital Management and a fund managed by The Carlyle Group will help fund the Guitar Center through bankruptcy.

“This is an important and positive step in our process to significantly reduce our debt and improve our ability to reinvest in our business to support long-term growth,” Guitar Center CEO Ron Japinga said in a statement.

The company will continue to remain in business during the bankruptcy process. But it may not be able to take advantage of the holiday shopping shopping boom. More than a quarter of Americans – 28% – say they will spend less on holiday gifts this year compared to last year, Gallup said in a new poll that marks the highest percentage Gallup has recorded in this category since 2012.

“We will continue to serve our customers and deliver our mission to put more music into the world,” Japinga said. He added that the company expects to complete the process before the end of the year.

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