Gibson Brands, the company that makes the iconic Les Paul, SG and Flying V guitars, has officially filed for bankruptcy protection following an unsuccessful attempt at diversification.
As reported by The Guardian, the Nashville-based company cited a "devastating" financial fall that left them with no option but to request court protection from creditors in order to reorganise the business.
“Over the past 12 months, we have made substantial strides through an operational restructuring,” Gibson’s CEO, Henry Juszkiewicz said.
Juszkiewicz went on to detail that the protection will allow the company to refocus their core business of musical instruments to ensure the future stability of Gibson Guitars.
It was revealed that the organisation has debts of between $100 million and $500 million including owing sums of at least $100,000 to 26 other companies.
Gibson's revenue has been steadily declining over the past several years, with it falling from $2.1 billion to $1.7 million in 2017.
As sales fell, the group attempted to diversify into electronics with the 2014 purchase of Philips' audio division for $135 million which backfired and led to Moody's downgrading the company two years later.
Gibson Brands was founded in 1894 with their guitars being favoured by the likes of Neil Young, Jimmy Page, Slash and more.
Comments