The Guitar Center has officially filed for Chapter 11 bankruptcy, which New York Times reports. The company filed for bankruptcy in the eastern district of Virginia on Saturday night (November 21), according to Times. Guitar Center continues to pay employees during bankruptcy. Read the full report here.
The looming possibility that the Guitar Center could file for bankruptcy was reported by Times and Bloomberg last month. The company faced financial strains after being forced to temporarily close most of its physical locations earlier in the year due to the COVID-19 pandemic. At one point, 75 percent of Guitar Center stores were closed across the United States.
According to a statement posted on Businesswire, the Guitar Center will “continue to fulfill its financial obligations to suppliers, suppliers and employees and intends to make payments in full to these parties without interruption in normal business.”
“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 the statement. “Throughout this process, we will continue to serve our customers and deliver our mission to put more music into the world. Given the strong support from our lenders and creditors, we expect to complete the process by the end of this year. “Find the full statement here.