Dire financial situation at Gibson?

[Psycho Bass Guy]

I'm no expert but would'nt consumer products run at higher cost in product development than musical instruments do.

They do, but they also make much higher profit margins. There are only so many ways that costs can be cut making a guitar before the drop in quality erodes the retail price point as well.  Consumer products cost more to develop but once they are developed, can be made in bulk in contract factories in Asia for very high wholesale and retail margins. Henry saw the cash that Fender raked in on its branded accessories and wanted that pie too, but bit off way more than he could chew.

[Pilgrim]

From what I've read, it's the consumer electronics that aren't performing. Hopefully he recognizes that. I posted a shot a year ago of Gibson speakers I saw in a store in Tokyo.

[Dave W]

There's a widespread assumption that guitar sales are in decline. The annual sales figures published in Music Trades show that that's untrue. Sales are relatively flat since the crash of 2008-09 but people are still buying lots of guitars. IIRC only the cheapest (under $200) category was in decline over a 5-year period.

Philips and TEAC/Tascam may be performing okay, hard to say. At least those brands are still very visible. But what about brands like Onkyo and Cerwin-Vega? Their heyday was years ago. My home stereo (except the speakers) is all Onkyo. Rock solid reliable, sounds great. But the newest component is 25-26 years old. Their reputation had declined well  before Henry bought the company.

Anyway... the bottom line is that Henry's existing creditors apparently want him out. The only way he survives that is by refinancing the entire debt with other creditors, at a time when the company's credit rating is very poor. Can he pull it off? Possibly, but not likely.

[Dave W]

Would you trust this man to turn the company around, when he's the one whose actions brought it to this point?

[uwe]

All this past buying of electronics has-beens is beyond me. I thought Henry wanted to turn Gibson into a lifestyle brand with the guitar production being the showcase for preserving the mystique. In that case he should be selling Gibson jeans, shoes, leather jackets and, yes, Gibson perfume (I'm not joking, "Släsh - The new fragrance from Gibsön that rocks your role ..." )



or open Gibson Cafés akin to Hard Rock Cafés and not buy someone like Onkyo (I used to have an Onkyo tape recorder too, but that was many moons ago). 

With the digital revolution ongoing, today's state-of-the-art gadget is tomorrow's junk. Look what happened to Nokia. Unless you are at the forefront of technical development (Gibson is too small for that and doesn't have the money either) and have an image to boot like, say, Apple (for the avoidance of doubt: I have never owned a single Apple product), don't bother. But people will be buying perfume and jeans for a long time to come.

For his alleged quest of making Gibson a lifestyle brand, Henry should have invited Karl Lagerfeld to stage a fashion show in Nashville rather than importing woods from dubious sources. The problem with Henry J is - ignore all the bad figures and some dodgy business decisions in the past - that there is nothing visionary in him. Gibson would need someone like Richard Branson to take it somewhere else.

[doombass]

I believe Henry is a visionary alright. It's just that his vision miss the target over and over again. If he manages to lure new creditors to his realm things will probably get worse because he has no grasp on reality at all.

[Chris P.]

Buying a part of our Dutch Phillips was a bad idea.. so we brought down the cpmpany:)

[patman]

Focus on building good guitars people can afford

[uwe]

Our local town newspaper "Langener Zeitung" reported about Gibson's state in its edition today - it being a newspaper that generally devotes more pages to the local rabbit breeding club than to, say, the war in Syria. There is definitely something seriously amiss.

[Dave W]

Posted by a member at MLP: "Somebody needs to do one of those Hitler-in-the-bunker videos with HJ."

Anyone up for it?

[westen44]

This thread has already set a world's record in contrasts with a pic of Henry J followed by one of Cara Delevingne with a guitar. 

[Dave W]

This thread has already set a world's record in contrasts with a pic of Henry J followed by one of Cara Delevingne with a guitar.

Never heard of her before. I figured Uwe found some random pic of a girl with psycho chick eyebrows and skinny legs. Good contrast with the Crazy Henry gif.

[Dave W]

For your enjoyment: Henry as Hitler in the bunker.

NSFW language

Gibson's Diversification causes a tense moment in the boardroom

The person who made this couldn't figure out how to save it without losing the captions.

[westen44]

Never heard of her before. I figured Uwe found some random pic of a girl with psycho chick eyebrows and skinny legs. Good contrast with the Crazy Henry gif.

I think she is better known in the UK.  I had read about her.  She is a model who also dabbles in acting and I suppose somewhat in music, too.  Because my taste in movies leans toward sci-fi movies that don't take themselves too seriously, I watched her in the recent "Valerian and the City of a Thousand Planets."   

[Denis]

Focus on building good guitars people can afford

That is the simplest and most accurate statement regarding what Gibson needs to do. Even if their guitars were a little more expensive than USA Fenders, they would do fine.