Dire financial situation at Gibson?

[Dave W]

They outlasted Toys R' Us, so Henry can hang his hat on that. Toys R' Us was another dying asset of Bain capitol along with guitar center. According to one article, Amazon and Wal-mart put the nails in the coffin. Never mind the Chinese, someday every retail item will be made by one single company and they will all be sold on Amazon. There will be no Gibson or Fender or Ibanez or anything. It will come down to one single model of guitar and one single model of bass, the Bezos bass, and every person who wants one will only have the choice of one standard gauge set of strings and one 15 watt solid state amp with a single 10" inch speaker to play it through. Nobody will be allowed to get famous either but at least it will be a true global marketplace and the price of everything will be the same around the world and things will be paid for by a single electronic currency.

I've seen one story after another blaming Amazon, but the truth is that online retail commerce still accounts for only about 10% of all retail commerce - 11.7% or 8.1%, according to 2 sources -and that includes Amazon and every other online retailer. It's true that many of the retail bankruptcies have been caused by too much debt from leveraged buyouts combined with declining sales, but every major one I've seen was a high price leader. Toys R Us, for example. You don't have to go online to find lower prices than they had. And amazon isn't a low price leader in a lot of categories.

[uwe]

Temples of Syringe? I always thought that was a thinly veiled allusion to nursie fetish ...

[Dave W]

The latest: Gibson, After Light Pruning, Plans Global Layoffs

If the one comment so far is accurate, the layoffs and closings at the former Philips/Woox have already begun.

IMHO this is too little too late. It won't make Gibson attractive enough for Henry to get the complete replacement financing he needs, and it won't budge the secured creditors who want control.

[uwe]

"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.

[Pilgrim]

They outlasted Toys R' Us, so Henry can hang his hat on that. Toys R' Us was another dying asset of Bain capitol along with guitar center. According to one article, Amazon and Wal-mart put the nails in the coffin. Never mind the Chinese, someday every retail item will be made by one single company and they will all be sold on Amazon. There will be no Gibson or Fender or Ibanez or anything. It will come down to one single model of guitar and one single model of bass, the Bezos bass, and every person who wants one will only have the choice of one standard gauge set of strings and one 15 watt solid state amp with a single 10" inch speaker to play it through. Nobody will be allowed to get famous either but at least it will be a true global marketplace and the price of everything will be the same around the world and things will be paid for by a single electronic currency.

And every restaurant will be Taco Bell!

[Basvarken]

Now if the Fireturd X would have been like this, Henry J might have been on to something:

[uwe]

Pah, without a Rick Wakeman cape that's nothing.



And a plate of curry of course. Gotta enjoy something during the Steve Howe guitar solo spot!!!

[Dave W]

Latest news, unconfirmed: Gibson is selling its four traveling tour buses and firing the five drivers.  That would save them only a very tiny amount toward their upcoming debt maturity, so it may mean that operating capital is already very tight.

[Highlander]

Temples of Syringe? I always thought that was a thinly veiled allusion to nursie fetish ...

Germans and their uniform issues... shiny and black... All ve now need is sum Vagner...

[uwe]

Latest news, unconfirmed: Gibson is selling its four traveling tour buses and firing the five drivers.  That would save them only a very tiny amount toward their upcoming debt maturity, so it may mean that operating capital is already very tight.

What a fearless restructurer Henry J. is. Thoses buses and their drivers were draining the lifeblood from the company no doubt.

[Dave W]

These new models will surely turn the company around, and the prices are so reasonable!

Chinese New Year Les Paul

A Neon Green J-45

[uwe]

Hihihi, yeal of the dog guital vely good idea, can plobably be eaten too!



And that green thing is smack dab in the middle of the envisaged target market: 12 year old girls will buy it in droves from their monthly allowances.

[Denis]

The latest: Gibson, After Light Pruning, Plans Global Layoffs

I hope they don't hit Epiphone too hard since it seems to be the one part of the company that does well.

[Highlander]

Dave didn't mention the more manly Iguana-burst fin... I mean, the name alone...

What was it JAE christened that Explorerbird of his...? Puke Green...!
If it's good enough for JAE, it's good enough for us...

[planetgaffnet]

These new models will surely turn the company around, and the prices are so reasonable!

Chinese New Year Les Paul

This is all part of the plan.  Produce a Les Paul with Chinese-themed graphics to satiate their new overlords.