Dire financial situation at Gibson?

[Dave W]

I've dismissed the recent articles and YT video predicting the collapse of Gibson b/c the people behind them obviously had no idea how things work and what the numbers meant.

This article is different, and it's by a business writer from a Nashville business journal. Worth your time to read.

Gibson 'running out of time — rapidly'

Looks as if things will change soon, one way or another.

[Chris P.]

Interesting and this all sounds legit, although I don't understand all the economical things they say.

[Alanko]

Dallas Seger, a smallscale luthier I follow on Instagram, posted the threatogram he received from Gibson over his 'YG' guitar design:

View this post on Instagram

The YG is a bit like an SG for sure, but the horns are shorter like a Guild S-100, and he adds a German carve to a number of his creations. It seems odd that Gibson chase down small luthiers who produce Gibson-like instruments when there are companies like Tokai who produce much closer replicas. They presumably know that the small luthiers can't afford big lawyers.

[Grog]

It keeps looking worse........... At this rate, the second printing of "The Gibson Bass Book" will only need two more pages. Or, they could go the same way Kmart did. File bankruptcy & then turn around & buy Fender.

[Basvarken]

At this rate, the second printing of "The Gibson Bass Book" will only need two more pages.

Yep. Looks like it ;-)

[Dave W]

Another story from a business and finance site. Sounds even more serious.

Debt Holders Increasingly Anticipate Bankruptcy Filing

[slinkp]

Would be a sad end of an era. If Gibson tanks for good,  I'm certain that somebody would buy their name and trademarks and start making guitars based on the classic designs - likely overseas.  Maybe some boutique models still made somewhere in the USA, who knows.  It'd probably be a whole different company.

[copacetic]

Does that mean Epiphone goes down with them? Most of their instruments are made in Japan, Korea and China?

[Chris P.]

I guess brands like Fender and Gibson will never disappear. They'll just be taken over. Think about the years in the '80s when there were no US Fenders for two years... Somebody will buy Gibson, take on excisting layed off personnel, maybe not all, take over some machines, wood and buildings, maybe not all, and continue. Maybe less models, maybe no studio monitors. It will just go on and maybe people won't notice it that much...

Epiphone. It depends on how the company structure is. Uwe knows more about that. Strange: In Holland we have a different distributor for Music Man and Sterling By Music Man. Different companies, so they both chose their own distributor. Strange, cos together you are much stronger. Epiphone could be an own company with another board, ... I dunno.

[Dave W]

Gibson isn't going down for good. Chances of the company being liquidated (Chapter 7) are close to zero. A Chapter 11 restructuring is what would happen if refinancing fails and/or HJ refuses to give up part of his equity as part of a pre-bankruptcy restructuring deal.

Gibson's guitar business (including Epiphone) is apparently profitable and steady after recovering from the 2015 sales debacle, so it's very unlikely that the US factories would close regardless of what happens. That's not where they're losing money. It's the expansions into other areas (mostly electronics) and the debt incurred in the expansions that's killing them.

Even if HJ were to retain majority ownership, he'll probably wind up being accountable to a board, which has never been the case up to now. Frankly, I hope his era comes to a close soon.

[amptech]

I guess brands like Fender and Gibson will never disappear.

Hurumph to that.

They were in just as bad shape when Henry bought it, weren't they?

[Pilgrim]

Sounds like Henry's majority ownership is a major problem with refinancing. It will be interesting to see if he will yield.

[Dave W]

Henry and David Berryman own the company outright. It's hard to see that situation staying the same.

[TBird1958]

I think any change will be an improvement at this point, hard to se how things could get worse. Henry just needs to go away.

[4stringer77]

But if Henry goes away we'll never get a bass version of the Firebird X, the Thunderbird X, with robo-tuners of course!