Author Topic: Gibson files Chapter 11 bankruptcy protection  (Read 5240 times)

somnif

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Gibson files Chapter 11 bankruptcy protection
« on: May 01, 2018, 07:10:34 PM »
https://www.bloomberg.com/news/articles/2018-05-01/gibson-files-for-bankruptcy-with-deal-to-renew-guitar-business

In a surprise to no one, Gibson (or rather, "Gibson Brands Inc.", bleh) is in serious financial trouble, to the tune of 500 million in debt. So they have filed a chapter 11 restructuring. Means the CEO will get the boot and the board a shuffle. They'll probably dump some of their side businesses as well.

What do you think, can they come back from the past decade(s) of mess? Can they recover from trying to be a "lifestyle" brand rather than a guitar manufacturer? Guitar sales are in a slump across the board, and Gibson's name hasn't exactly been popular in years. IMO, if they can up the QA a bit and maybe offer some decent rigs in the sub-1k range they stand a chance. Get back to competing with Fender for the "workhorse" market rather than trying to sell on name recognition alone.

somnif

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Re: Gibson files Chapter 11 bankruptcy protection
« Reply #1 on: May 01, 2018, 07:15:16 PM »
As a note, I have no idea how, if at all, this will affect Epiphone. I've always liked Epi's, though granted I mostly missed the cheapo-chinese years so perhaps my opinion is skewed. My first "real" guitar was a 2001 Epi LP Studio and I loved that thing, and their hollowbodies are still amazing for their price bracket.

Considering its the one thing seeming to keep Gibson afloat these days I'm hoping they don't muck about with the brand too badly.

slacker775

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Re: Gibson files Chapter 11 bankruptcy protection
« Reply #2 on: May 01, 2018, 07:55:58 PM »
I wouldnít expect much of any change to Epiphone unless they push the Gibson name to all of their tiers.  The changes they look to be making so far seem to be more about dropping the ill thought out side businesses that they acquired and were unable to do anything with. 

Ultimately, Iíd be inclined to see them sticking more with the higher sticker price items as they have better margins and they can trade on the name.   Not unlike a company like Harley Davidson where they donít cater to the deep-in-the-know crowd, rather the peripheral folks that donít know anything but a name. 

The more ideal scenario would be that they get real guitar geeks at the top that understand their audience AND can run an efficient business and they become a model guitar company.   I wonít hold my breath on that one.

culturejam

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Re: Gibson files Chapter 11 bankruptcy protection
« Reply #3 on: May 01, 2018, 08:22:03 PM »
I love this part:

Quote
Court papers call for a one-year consulting deal and compensation package for Juszkiewicz.

The rich get richer. Man, I wish I could get a job as CEO of some big company and mess things up so bad they pay me millions to go away. That would rule!  ;D

I suspect the outcome will be a more grounded Gibson that just sells guitars and related accessories. You know, like a normal guitar company. And I hope that they will focus a lot more on reasonably priced product lines and not just Collector's Choice $7k scuffed up guitars. I think there is a huge market for Gibson guitars in the $500 - $800 range. They could easily make a Les Paul Standard in Asia and retail it for $750, and I'd be lined up to buy a couple (even though I need another one like I need another hole in my head). And they could keep the USA and Custom Shop line at ridiculous price points for those that want to pay more.

somnif

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Re: Gibson files Chapter 11 bankruptcy protection
« Reply #4 on: May 01, 2018, 08:46:22 PM »
Yeah its that price range they really need to shoot for, higher end than the entry level Epi, competition for Fender's Mexico stuff.

And its the QA side they need to work on as much as anything. A 3k$ Gibson should feel damn near bulletproof and professionally set up, but they feel like they're tossed together by some tech just reading an instructional manual these days. My Mexican telecaster needed some intonation work and had a bad volume pot, but I could buy 8 of them for the price of a standard LP. Build guitars to be played, not displayed on a wall hanging over your Gibson brand bar stools in your Gibson brand Man Cave (TM).

Matmosphere

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Re: Gibson files Chapter 11 bankruptcy protection
« Reply #5 on: May 02, 2018, 05:05:08 AM »
I think Somnif hit it on the nose, cheap guitars are so good these days compared to 10-20 years ago that itís hard to make a strong argument to drop 2-3k on something. Sure a 3 grand Gibson might be better but is it $2500 better?

gordo

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Re: Gibson files Chapter 11 bankruptcy protection
« Reply #6 on: May 02, 2018, 05:43:06 AM »
Ironically their production was up significantly between 2017 and 2016.  Getting rid of their goofball CEO would likely be a good start, but as pointed out he gets to scoop out a wad of cash on his way out the door.  In interviews I've read even HE has admitted that their strategic planning over the past 5 or 6 years has been flat out stupid.

Muadzin

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Re: Gibson files Chapter 11 bankruptcy protection
« Reply #7 on: May 02, 2018, 06:05:28 AM »
Can they come back from this? Well, I reckon there is still some life in the brand. And a lot of loyalty still. Even if the factories closed down completely, got dismantled, all the workers scattered to the wind, someone will probably still come along, snag the name and restart production somewhere else. It happened to others too, Vox I think. Maybe it will be made completely in China, maybe still in the US.

Will it regain its former status? I reckon not. But that applies for everyone in the guitar business. Guitar is dead. Hiphop, urban and dance have supplanted rock, and rock is now where all the genres used to be after rock supplanted them. It will become more of a niche. And so will guitar manufacturers. Unless a miracle happens guys copy/pasting loops and samples in their bedrooms and guys playing a CD being called a concert is now the future. I'd love to be proven wrong but I don't see it happen.

gordo

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Re: Gibson files Chapter 11 bankruptcy protection
« Reply #8 on: May 02, 2018, 09:43:49 AM »
That's interesting you say that about someone else snagging the name.  I doubt that will happen but would be AWESOME to see the Heritage guys come full circle and move it back to Kalamazoo.

drezdn

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Re: Gibson files Chapter 11 bankruptcy protection
« Reply #9 on: May 02, 2018, 10:27:37 AM »
My guess is that in the long run, they'll end up as just another name in someone else's line.

m-Kresol

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Re: Gibson files Chapter 11 bankruptcy protection
« Reply #10 on: May 02, 2018, 02:42:22 PM »
Can they come back from this? Well, I reckon there is still some life in the brand. And a lot of loyalty still. Even if the factories closed down completely, got dismantled, all the workers scattered to the wind, someone will probably still come along, snag the name and restart production somewhere else. It happened to others too, Vox I think. Maybe it will be made completely in China, maybe still in the US.

Will it regain its former status? I reckon not. But that applies for everyone in the guitar business. Guitar is dead. Hiphop, urban and dance have supplanted rock, and rock is now where all the genres used to be after rock supplanted them. It will become more of a niche. And so will guitar manufacturers. Unless a miracle happens guys copy/pasting loops and samples in their bedrooms and guys playing a CD being called a concert is now the future. I'd love to be proven wrong but I don't see it happen.

I doubt that guitar will be a niche. As far as music instruments go, I think guitar is still a front runner in sales. Guitar is sill popular with teenagers getting into cover bands (I think!) and let's face it: 99% of guitarists suffer from GAS and want more than one guitar.
While you're right that Pop, Rap and other genres might have the upper hand right now (main reason I stopped listening to radio), I think that the classic combo Guitar-Bass-Drums-Singer is far from over and will surpass us all.

just my 2 cents, ymmv.
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culturejam

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Re: Gibson files Chapter 11 bankruptcy protection
« Reply #11 on: May 02, 2018, 05:21:29 PM »
Guitar is sill popular with teenagers getting into cover bands (I think!)

It is around here (northeast US). My wife is a high school teacher, and she's got several kids in her classes that are in bands. And it's that way every year since she started teaching back in 2003.

I think the demise of guitar is great exaggerated.

slacker775

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Re: Gibson files Chapter 11 bankruptcy protection
« Reply #12 on: May 02, 2018, 08:02:51 PM »
Wasnít everyone saying guitar was dead in the early 80ís when everything was keyboards and synths?  Howíd that turn out?

Itís certainly not as predominant, but it is still present, even in pop stuff.

Govmnt_Lacky

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Re: Gibson files Chapter 11 bankruptcy protection
« Reply #13 on: May 02, 2018, 08:15:16 PM »
I am not a guitar knowledge guru so, maybe someone can explain this to me.

Why in the hell does it cost $3K+ for a good named Gibson guitar just because it is "made in the U.S.A? Where is the cost justified? Same with PRS guitars. Hell, if I want a lefty PRS it will cost me $4K new and around $2500 used!!! Ridiculous!!!

slacker775

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Re: Gibson files Chapter 11 bankruptcy protection
« Reply #14 on: May 02, 2018, 08:18:58 PM »
Thereís definitely a good amount of markup for the name no doubt.  From what I can tell with other boutique makers, Wood choice is going to be a significant factor in the cost.   Some kind of spray painted basswood wonít be too pricy, but a fancy finished highly figured wood body/top will drive the cost up. 

Of course, labor wise itís all fairly close to the same as most/all use CNC machines and finish from there.