Guitar Center files for chapter 11 bankruptcy amid debt restructuring efforts
On Saturday, November 21, the nation’s largest retailer of music equipment filed for Chapter 11 bankruptcy in the midst of debt restructuring. The beloved Guitar Center, which has long been a second home for DJs and producers thanks to their hearty inventory of Pioneer DJ products and other electronic music hardware, was already challenged by online competitors prior to the COVID-19 pandemic, which only served to exacerbate the issue. Now, the company has reached a debt-reduction agreement with stakeholders.
The agreement will reduce Guitar Center’s staggering $1.3 billion debt to approximately $500 million. The company plans to secure an additional $335 million in senior secured notes. An additional $165 million will also be infused into Guitar Center via Carlyle Group managed fund Brigade Capital Management.
CEO Ron Japinga stated that Guitar Center is expected to rise out of bankruptcy before the end of 2020, and that no day-to-day sales and operations of the company will be affected during the process.