Dire financial situation at Gibson?

[Denis]

He's mentioned Nike and Harley-Davidson as brand role models before - and I guess they are: very established international brands that have long transcended their orginal core products.

In case Henry didn't notice, Harley is closing their Kansas City plant.

[Dave W]

He's mentioned Nike and Harley-Davidson as brand role models before - and I guess they are: very established international brands that have long transcended their orginal core products.

But who told him that buying consumer electronics has-beens would help him achieve that status? I'd have understood if he had bought, say, someone like Bang & Olufson (I find them unremarkable soundwise, but their look/styling makes wives happy) or Bose who already have an established lifestyle image.

Even if they weren't has-beens, it doesn't make sense. For one thing, Nike and Harley lifestyle items are still branded as Nike or Harley. Also, they're accessories. Gibson fans wouldn't buy DVD players as accessories even if they were branded Gibson.

The man has vision, all right, the problem is that his vision for the company is as loopy as his rolling eyeballs.

[amptech]

Gibson fans wouldn't buy DVD players as accessories even if they were branded Gibson.

Gibson fans don't even buy Gibson branded amps!

I know nothing about making money, but never understood why they made so half hearted attempts to make amps (post 1968).

There must be potential enough there, and they made enough good amps in the past to pick from. Tweed era GA amps as a 'standard' line and why not make a killer EH-150 or 185 as their top of the line-expensive-point to point amp. They made so many inventions in electronics, why not focus on that instead of lifesyle.

[doombass]

I certainly think Gibson could have a go in that direction,but that all depends on the vintage market prices. Marshall has been doing it for some time now with their X-suffix amps, 1959 and JTM45 reissues. But to bring up reissues of the Gibson vintage line of amps would be the opposite direction of what Henry's been aiming at for the last 10 years. He seems to have become a firm believer in that today's youth is only using the latest technology, while vintage aficionados are a dying breed.

[Dave W]

I certainly think Gibson could have a go in that direction,but that all depends on the vintage market prices. Marshall has been doing it for some time now with their X-suffix amps, 1959 and JTM45 reissues. But to bring up reissues of the Gibson vintage line of amps would be the opposite direction of what Henry's been aiming at for the last 10 years. He seems to have become a firm believer in that today's youth is only using the latest technology, while vintage aficionados are a dying breed.

Henry's view of vintage aficionados.

[Dave W]

The New York Times gets in the act: Is Gibson, a Totem of Guitar Godhead, Headed for Chapter 11?

Nothing new on the financial front, but here's the latest example of Henry blaming his customer base for the auto tuning sales disaster:
Mr. Juszkiewicz called it “great technology” and said he believed all guitars will eventually have it. But auto-tuning has been scaled back after, he said, “the trolls took over the dialogue.”

[slinkp]

What he totally fails to grasp is that the young generation indeed embraces technological advancement at a breakneck pace - but they also are fascinated with old fashioned hand craftsmanship and vintage fetishes, and they do not necessarily blend the two proclivities in the same objects. And guitars by and large appeal to the vintage artisanal taste, not the future tech taste.

That's my armchair take anyway. I have no data to back this up.

[amptech]

What he totally fails to grasp is that the young generation indeed embraces technological advancement at a breakneck pace - but they also are fascinated with old fashioned hand craftsmanship and vintage fetishes, and they do not necessarily blend the two proclivities in the same objects. And guitars by and large appeal to the vintage artisanal taste, not the future tech taste.

That's my armchair take anyway. I have no data to back this up.

I have a hipshot drop d tuner on one of my Gibson basses. I think that's hi-tech futuristic. Active pickups is beyond that again..

But computers just don't belong in guitars. They should have realized that after the godwin guitar organ and the synthaxe!

[Dave W]

I agree with both of you.

Even if some players would welcome a computer in a guitar, you don't force it on everyone like Gibson did. What a self-inflicted disaster that was. Can you imagine Fender grafting its modeling amp modules into every traditional Fender tube amp?

Then there's the non-electronic fiascos, like the adjustable "zero fret nut" assembly made of soft brass that had to be replaced, and widening of the neck to accommodate it. Solutions to non-existent problems, forced on every guitar in the line until sales dropped so far, he had to backtrack.

But it's our fault for not fulfilling Henry's vision.

[doombass]

But it's our fault for not fulfilling Henry's vision.

Yup, trolls dialogue he said:

[Dave W]

Gibson Brands Shareholder/KKR Negotiations

This is a PR Newswire release furnished by Gibson. It's the first acknowledgement that they have been negotiating with a major creditor, but the talks have ended, at least for now, due to "significantly divergent" views. Still, it's a sign that a major change is likely.

Another take, based on the same information: With KKR’s attempted takeover of Gibson nixed, what’s next?

[uwe]

I was rubbing my eyes at their - claimed by them, doubted by the investors - earnings before interest, taxes, depreciation and amortization with all one-off positive and negative effects not taken into account (adjusted EBITDA) of only US-$ 60.0-$65.0 million  . They are hardly a large or even medium-size business then, more a cottage industry. Somehow (without ever giving too much thought to it), I had expected them to push a much more substantial operative result wave (even if large parts of that are subsequently eaten by interest payments).

So it's not so much whether anybody could afford Gibson as it is the question who might be at all interested. Not really something that wets a financial investor's appetite - they would be underneath the radar of many private equity companies. They will either have to find a very rich investment banker who "always wanted to own a guitar company" or someone from the instrument industry will have to play the white knight and see the Gibson brand as something to enhance his portfolio with.

[amptech]

So it's not so much whether anybody could afford Gibson as it is the question who might be at all interested. Not really something that wets a financial investor's appetite - they would be underneath the radar of many private equity companies. They will either have to find a very rich investment banker who "always wanted to own a gutar company" or someone from the instrument industry will have to play the white knight and see the Gibson brand as something to enhance his portfolio with.

I say go for it!

[uwe]

 

I have severe doubts whether anybody here would want that - I'd immediately discard period-correct reissues and gently modernize the classic models. And then there is the golden rule that you should never buy a company whose product you love too much.

Ok, one period-correct reissue: the 20/20. 

[Chris P.]

Yeah, Uwe. Buy it! And make the right basses with chrome, the 20/20 and stop the guitar building just to piss of people