"In 2012, Gibson made the ill-advised decision to diversify their business by branching into the consumer electronics business. In order to quickly pull this off, the company used debt, a tremendous amount of debt, to finance their purchases. Leveraged buyouts are a well-known tactic in financial circles and rely heavily on future growth of the acquired property to pay off the debt used to acquire it. But when that property does not grow, things can go real bad, real fast."
Sigh. That was most likely already a desperate move to regenereate former turnover figures once guitar sales had dropped post-Lehman. Chucking stuff at a wall to see what sticks.
Henry is running out of time. Like most people in his situation he will at one point have to decide whether he disengages and lets go to save his family assets/wealth or go broke both with the company and with his private wealth. With Gibson's ill financial standing already dragged through all papers, commercially attractive refinancing is out of the question now.
Plus: The new tariff wars do not bode well for future Gibson export sales. The EU is already contemplating to hike tariffs on US whiskey and Harley-Davidson motorcycles (I personally think that would be silly, but silliness is currently all the rage in world politics), a US life style product maker like Gibson is another easy counterstrike target.
