Dismiss Notice
Join The Good Vibe Zone today, and hangout with the nicest bass community in the world :)

Gibson In Serious Trouble

Discussion in 'Guitars and Guitar Amps' started by Hector, Feb 15, 2018.

Tags:
  1. Hector

    Hector Moderator Staff Member

    Joined:
    Feb 23, 2016
    Messages:
    561
    Likes Received:
    268
    Trophy Points:
    63
    Well, this doesn't look good:



    Gibson ‘running out of time — rapidly’

    Company faces big debt deadlines; CFO exits after less than a year

    AUTHORS Geert De Lombaerde

    “Gibson Brands, Inc. today announced that the company made a $16.6 million coupon payment to holders of its $375 million, 8.875% senior secured notes due 2018.”

    That simple statement issued a week ago — at all of 26 words, it’s less than a quarter the length of Gibson’s boilerplate company description that accompanied it — suggests a business-as-usual tone of a company taking care of its contractual commitments.

    But the situation facing the iconic Nashville-based music instrument maker, which has annual revenues of more than $1 billion, is far from normal: CFO Bill Lawrence recently left the company after less than a year on the job and just six months before $375 million of senior secured notes will mature. On top of that, another $145 million in bank loans will come due immediately if those notes, issued in 2013, are not refinanced by July 23.

    Less than six months out from those crucial deadlines, the prospects for an orderly refinancing — Gibson has hired investment bank Jefferies to help with that — look slim, observers say. And the alternative scenarios look likely to sideline longtime owner and CEO Henry Juszkiewicz.

    “At the end of the day, someone will take control of this company — be it the debtors or the bondholders,” Debtwire reporter Reshmi Basu told the Post this week. “This has been a long time coming.”

    Basu said some bondholders have complained about a lack of clarity from Gibson — a situation that has not improved by the arrival of GSO Capital Partners, a unit of private equity giant Blackstone that about a year ago extended Gibson a lifeline via $130 million in loans. Basu told the Post GSO’s arrival on the scene has unsettled some bondholders, who have organized and hired financial and legal advisors to protect their interests.

    Kevin Cassidy, a senior credit officer at Moody’s Investors Service, says Juszkiewicz essentially has just three options: He and his team could negotiate an exchange of their debt coming due for new notes, which may not be feasible at a reasonable price. He also could be persuaded — or forced — to give up some of his equity in exchange for the debt payments. Or he may end up taking one of the most globally recognized brands that calls Nashville home to bankruptcy court.

    “This year is critical and they are running out of time — rapidly,” said Cassidy, who last summer downgraded Gibson’s debt rating. “And if this ends in bankruptcy, he will give up the entire company.”

    Attempts to reach Gibson executives via a spokesman this week were not successful.

    The company recently gave itself a bit of breathing room by selling a former Baldwin Piano warehouse in The Gulch for $6.4 million. It also is trying to sell the nearby Valley Arts building on Church Street, although that deal has landed in court. But those sales — the Valley Arts property will bring in about $11 million — are unlikely to make a big enough dent to stave off a painful overhaul.

    Gibson needs to report by next week its final numbers for its fiscal third quarter to stakeholders. One thing bond owners will be watching for is an improvement in the company’s electronics business, which has been built up in the past few years via debt-fueled acquisitions but has seen sales slump of late.

    Still, even a solid turnaround on that front won’t be enough for Juszkiewicz to avoid difficult conversations.

    “Some type of restructuring will be necessary,” Cassidy said. “The core business is a very stable business, and a sustainable one. But you have a balance sheet problem and an operational problem.”


    Original article: Gibson ‘running out of time – rapidly’ | Nashville Post
     
    Florin and Hardy like this.
  2. Nightmaresandconclusions

    Nightmaresandconclusions

    Joined:
    Jun 3, 2011
    Messages:
    631
    Likes Received:
    399
    Trophy Points:
    63
    Location:
    New Zealand
    Yeah Gibson did not show at Namm this year.
     
  3. DiMarco

    DiMarco nutcase Good Vibe Sponsor

    Joined:
    Nov 19, 2009
    Messages:
    5,246
    Likes Received:
    1,307
    Trophy Points:
    113
    Location:
    the Netherlands
    Oh boy. Their focus on consumer electronics must really be going well I guess...
    Also killing off further development of the Cakewalk line of products a couple of months back... Hmmmm.

    Here we have a company that is completely clueless about what they want, only focussing on possible revenue. Another used to be pioneering brand going down because of new management people wanting more money and only interested in that.

    Whatever happened to ideals in 'murrica?
     
    Florin and Bassist4Eris like this.
  4. ectoflanger

    ectoflanger Supporting Member

    Joined:
    Mar 3, 2009
    Messages:
    1,061
    Likes Received:
    536
    Trophy Points:
    113
    Location:
    Latitude Infinity
    I would say that putting auto-tuners on high end Les Pauls in 2015 was a mistake -
     
  5. Hector

    Hector Moderator Staff Member

    Joined:
    Feb 23, 2016
    Messages:
    561
    Likes Received:
    268
    Trophy Points:
    63
    2015 was bad (but typical of theCEO). But it wasn't only on the Les Pauls, it was on ALL of the guitars. That, and they "improved" the guitars with a wider neck and their brass nut (which did not work at all). Worst of all, you couldn't get one without all that crap on it. There is a local big music store that still has 2015 guitars on the wall. No one wants them.

    But that's not the only thing he did wrong..

    - Shite quality control (I've seen new Gibsons for sale with dents in the wood under the lacquer, rough fretboards (not dry, ROUGH), badly cut nuts (off by several mm)...)

    - The FireBird X

    - Smashing an SG on stage at the intro of the Firebird X

    - being impossible to work for ( Gibson Brands - One horrible eccentric CEO, ruins the entire company, also rules and has created a culture of fear & intimidation | Glassdoor )

    - Not releasing products Gibson players are screaming for.. but when they do, they want WAY too much money for them.

    - The whole Custom Shop asking you to pay 10k for a guitar worth only 1500.

    - 2018 prices (they went up.. a LOT !!)

    And then there is their whole "Budget Range". Instead of making guitars like the SGJ / LPJ that were good, Gibson started making:

    - Gibson Firebird Zero (shite guitar, low price point, just horrible quality)

    - Gibson Les Paul M2 (same shite, but in LP shape)

    - Gibson SG Fusion (again, same shite, but in SG shape)

    Can be seen here: Gibson M^2

    And here's a review:




    The list goes on and on...


    That being said, even thought there are some things on my SGJ that annoy me, it still plays beautifully.... So Gibson can still make good guitars. I hope that part of the company will survive..
     
    Bassist4Eris likes this.
  6. ectoflanger

    ectoflanger Supporting Member

    Joined:
    Mar 3, 2009
    Messages:
    1,061
    Likes Received:
    536
    Trophy Points:
    113
    Location:
    Latitude Infinity
    Back in late -2015 I managed to snag a non-weight relieved 2014 Les Paul Traditional Cherry Sunburst off Reverb that’s pretty nice and consider myself fortunate.
     
    Hector likes this.
  7. Augie

    Augie The Desert Bass-ape

    Joined:
    Mar 11, 2010
    Messages:
    2,229
    Likes Received:
    192
    Trophy Points:
    63
    Location:
    Adelaide
    I remember when there good and Ok epiphones, they were mostly OK, but every now and then (maybe 1 in 10) would be amazing, great necks, great feel and good finish. You would say the same thing! You were lucky to get an epiphone where all the stars aligned. But now that's what people say with GIBSONS. cant have the flagship be hit and miss.
     
    Hector likes this.
  8. DiMarco

    DiMarco nutcase Good Vibe Sponsor

    Joined:
    Nov 19, 2009
    Messages:
    5,246
    Likes Received:
    1,307
    Trophy Points:
    113
    Location:
    the Netherlands
    I remember the time epiphones would stay in tune - until about the third chord in a song. Awful guitars. In the nineties I owned an epi sg with upgraded tuners, pickups (sd jazz and jb sig), bridge and pu switch. Then I quickly bought a Gibson instead.
     
    Hector likes this.
  9. Hector

    Hector Moderator Staff Member

    Joined:
    Feb 23, 2016
    Messages:
    561
    Likes Received:
    268
    Trophy Points:
    63
    Gibson has always produced hit/miss guitars. They are sort of famous for it on the dedicated Les Paul / SG Forums. Most we ok, some were dogs, a very few were sent from the Guitar Gods themselves.

    Personally, I've played a few OK ones and one or two dogs (their Les Paul VooDoo from 2016 was one dog, looked great, swamp ash body was weird, it played for shit). I've never played one sent from the Gods...

    My Framus Renegade, however, was sent from the Guitar Gods :cool:
     
    Last edited: Feb 20, 2018
    Hardy likes this.
  10. Augie

    Augie The Desert Bass-ape

    Joined:
    Mar 11, 2010
    Messages:
    2,229
    Likes Received:
    192
    Trophy Points:
    63
    Location:
    Adelaide
    I'm not sure too may dogs have come out of either of warwick's german factories. a few neck cracks early on, and the self-destructing JAN2s and machine heads in the 2000s...but these flawed units still Played well.
     
    Hector likes this.
  11. bassinplace

    bassinplace

    Joined:
    Jan 9, 2018
    Messages:
    12
    Likes Received:
    16
    Trophy Points:
    3
    Location:
    Southern California
    I never tried a Gibson until a couple years ago. I didn't like a single one of them I tried, which made me lose interest in them altogether. Too bad because I think they look awesome, but I know I'll never play one.
     
  12. Hector

    Hector Moderator Staff Member

    Joined:
    Feb 23, 2016
    Messages:
    561
    Likes Received:
    268
    Trophy Points:
    63
    Which ones did you try?

    Personally I am partial to an SG.
     
  13. bassinplace

    bassinplace

    Joined:
    Jan 9, 2018
    Messages:
    12
    Likes Received:
    16
    Trophy Points:
    3
    Location:
    Southern California
    I tried the EB, Les Paul and Thunderbird. All new models at the time which was about 2012.
     
  14. DiMarco

    DiMarco nutcase Good Vibe Sponsor

    Joined:
    Nov 19, 2009
    Messages:
    5,246
    Likes Received:
    1,307
    Trophy Points:
    113
    Location:
    the Netherlands
    Apparently Gibson are not at all in trouble, or so I just read.
    They just reached the end of a financing term and are now looking at ways to refinance, carefully weighing multiple options like any company would. They met all current obligations to bond holders.
     
  15. Augie

    Augie The Desert Bass-ape

    Joined:
    Mar 11, 2010
    Messages:
    2,229
    Likes Received:
    192
    Trophy Points:
    63
    Location:
    Adelaide
    No wonder you don't like Gibsons: you tried their basses! A good LP or SG guitar are beautiful. their basses are amazingly underwhelming. TBs sound wooly as hell and balance like crap, SGs are flabby sounding-just not nice short scales, and the LPs are OK, just ok for many kgs and many many dollars. I have ncie sounds from old Grabbers and Rippers, but they are odd beasts and notto everyone's taste as well.
     
  16. bassinplace

    bassinplace

    Joined:
    Jan 9, 2018
    Messages:
    12
    Likes Received:
    16
    Trophy Points:
    3
    Location:
    Southern California
    Yep. They were pretty craptacular.
     
  17. ectoflanger

    ectoflanger Supporting Member

    Joined:
    Mar 3, 2009
    Messages:
    1,061
    Likes Received:
    536
    Trophy Points:
    113
    Location:
    Latitude Infinity
    But there’s nothing like a late 50’s Les Paul/tube amp power chord crunch- but those necks are so beefy. Maybe that’s why.



     
    Last edited: Feb 23, 2018
  18. ectoflanger

    ectoflanger Supporting Member

    Joined:
    Mar 3, 2009
    Messages:
    1,061
    Likes Received:
    536
    Trophy Points:
    113
    Location:
    Latitude Infinity
    Or mid- 70’s for that matter-

     
  19. Jay2U

    Jay2U Good Vibe Sponsor

    Joined:
    Jan 9, 2018
    Messages:
    208
    Likes Received:
    142
    Trophy Points:
    43
    Location:
    22 ft below sea level
    Florin likes this.
  20. DiMarco

    DiMarco nutcase Good Vibe Sponsor

    Joined:
    Nov 19, 2009
    Messages:
    5,246
    Likes Received:
    1,307
    Trophy Points:
    113
    Location:
    the Netherlands
Loading...

Share This Page