Gibson Bankruptcy
After more than 116 years in business, guitar giants Gibson have filed for bankruptcy. The files submitted on Tuesday have stated that the company has at least $100 million in debt. Gibson has taken the step in an attempt to rejuvenate the company. However, the move has shocked the music community, as no one would have expected that such an illustrious company could have such major monetary problems. Gibson guitars, for many, have always been seen as the ‘Rolls Royce’ of both acoustic and electric guitars.
History of Gibson Guitars
Orville Gibson founded his guitar company as Gibson-Mandolin Guitar Mfg. Co. Ltd back in 1902. Originally, he began by making mandolin style guitars and by the 1930s the company had started selling acoustic guitars. In the 1950s the Les Paul was created which is still, the most iconic guitar in the world. Garrison Guitars took over the company in 2007, and only seven years ago they were renamed Gibson Brands Inc. In recent years, Gibson seemed to try stepping away from ut’s loyal fan base by introducing guitars like the Les Paul Future robot, which to according to widespread reviews, was a terrible mistake and the guitar was full of faults.
Famous Gibson Guitar Players
Keith Richards of the Rolling Stones has played his famous Les Paul guitar for years. In fact, Richards became the first British ‘star-owner’ of the Les Paul in 1959. Throughout the 60s and 70s, Richards continued to use several Les Paul and ES models in many of his music videos, therefore, he has become a very well known Gibson player.
Another famous player is Jimmy Page of Led Zeppelin. Like Richards, Page has owned several guitars and currently uses a 1959 “number 1”, which he once described as his “mistress and wife”. Jimmy Page most famously used a double-necked EDS-1275 in Led Zepplin’s live performances of Stairway to Heaven and The Rain Song.
Is Gibson going out of business?
News emerged in February this year that the guitar manufacturer has financial difficulties. The Gibson bankruptcy, however, has only come to light at the start of this month. According to CEO Henry Juszkiewicz, the company have decided to “re-focus on core business and instruments”. He added that his main concern was “the long-term stability and financial health” of the company.
Gibson’s financial instability is due to a culmination of several problems. Firstly their Chief Financial Officer Bill Lawrence quit after less than a year in the post. Then $375 million of senior secured notes surfaced and, also, the company now owe $145 million in bank loans.
Two of the Gibson guitar factories ( Memphis and Nashville) were raided by the FBI for a second time, for using illegally sourced Madagascan ebony. According to Gibson, this caused the company in over $5,000,000 in losses.
Gibson’s bankruptcy, according to many in the music industry, is partially due to the demand for guitars decreasing. 
Is Gibson Guitars in trouble?
Gibson hopes that they will undergo a restructuring process to return profitability to the company. Gibson has already begun offering redundancy to some staff to cut costs. Their aim for the near future is to reduce debts and generate funds to pay off their bank loans and senior secured notes. Gibson Brands Inc are hopeful they will retain their status as the guitar manufacturing heavyweights, by efficiently managing their debts. Most musicians seem positive that Gibson will re-emerge unscathed from this recent scandal.
Morningside School of Music director, Paul Boyd stated:
“Both the clients and staff of Morningside School of Music, are positive that Gibson Guitars Inc will overcome this significant glitch in their trading history and continue to be one of the leading international musical instrument brands. No one perceives the Gibson bankruptcy to last, a buyer will step in at the last minute for sure”
