Is Gibson, a Totem of Guitar Godhead, Headed for Chapter 11?
Supported by Business Day Is Gibson, a Totem of Guitar Godhead, Headed for Chapter 11? Photo Credit Jens Mortensen for The New York Times Gibson, what happened?
There’s been talk of bankruptcy swirling around Gibson, the venerated Nashville-based guitar company, which takes in more than $1.2 billion in annual revenue but is more than $500 million in debt. Buzzards are circling. Kohlberg Kravis Roberts, the private equity giant, is a bondholder. Blackstone is also a major lender.
Gibson’s problems are not hard to diagnose. The company’s longtime chief executive, Henry Juszkiewicz, wanted to diversify by turning Gibson into what he has called a “music lifestyle company” — basically a consumer electronics business that sells headphones and hi-fis as well as guitars. He made a splashy purchase of the audio and home entertainment division of Netherlands-based Royal Philips in 2014, and then ran headlong into the collapse of the euro.
It was a disaster. Mr. Juszkiewicz, in an interview,..