The nation’s largest retailer for musical instruments has filed for bankruptcy.
Business Insider reports Guitar Center filed for Chapter 11 bankruptcy protection on Saturday in a move “to significantly reduce our debt and enhance our ability to reinvest in our business.” The company said it’s been hit hard by the coronavirus pandemic, which also largely shut down live music performances, but said it plans to emerge from bankruptcy by the end of the year.
Guitar Center said it plans to stay open during the bankruptcy process. The company has 269 stores in the U.S., including Upstate New York locations in Syracuse, Rochester, Johnson City, Colonie, Cheektowaga, and Tonawanda.
CNN reports the 61-year-old company received up to $165 million in new equity investments and lenders agreed to reduce its debt by nearly $800 million from roughly $1.3 billion.
“This is an important and positive step in our process to significantly reduce our debt and enhance our ability to reinvest in our business to support long-term growth,” Guitar Center CEO Ron Japinga said in a statement. “We will continue to serve our customers and deliver on our mission of putting more music in the world.”
Guitar Center’s primary owner, Ares Management Corporation, as well as new equity investor Brigade Capital Management and a fund managed by The Carlyle Group will reportedly help finance the company through bankruptcy. Fox Business reports Guitar Center said in a court filing that it has between $1 billion and $10 billion of both assets and liabilities.
Guitar Center had shifted to offer virtual lessons during the Covid-19 pandemic that forced nearly 75% of its stores to temporarily close, but many of its locations are in shopping malls that are also seeing declines in business. Other major retailers that have filed for bankruptcy or announced store closures this year include Bed Bath & Beyond, Brooks Brothers, J. Crew, JCPenney, Lord & Taylor, Men’s Wearhouse, Neiman Marcus, New York & Co and Pier 1 Imports.
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November 23, 2020 at 08:23PM
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Guitar Center files for bankruptcy, plans to keep stores open - syracuse.com
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