A friend of mine forwarded me an article published in the Wall Street Journal this morning, stating that “Gibson Brands” filed for Chapter 11 as it’s Gibson Innovations division, which operates under the Philips moniker, seeks protection to reorganize “in the face of $500 Million in debt.” The company at large is set to default on some of its debt as soon as July and is actively liquidating its consumer electronics businesses. Sheesh!
According to the article, KKR, a private equity company, will take over Gibson. Hopefully KKR will install leadership that will continue to build up the musical instrument business. Amazingly, it was that side of the house that was cashflow positive, with sales up 11% over the same time last year.
We guitarists have seen the improvement over the last few years; especially since the failed attempt at the robot guitar. Gibson learned from that and went back to its classic, roots styling and configurations, and also created a mid-range level line to fill in sales for people who didn’t want the cheap-o stuff but didn’t want to shell out for the high-end guitars. It was a smart move, and they realized good financial results. Hopefully, by shedding the consumer electronics arm and re-focusing their energies on their core competency, they’ll realize success again.
But all that said, the article did state that all these proceedings shouldn’t affect consumers. That’s a good thing. And it makes sense as the musical instrument business is profitable. So don’t expect them to close their doors. 🙂
Personally, following the saga of Gibson over the years has been amusing at best and head-scratching at worse. I’m a Les Paul guy, so I surely don’t want to see them struggle. But I have to say they’ve made some pretty stupid moves in the past that have hurt the company and affected their customers. The acquisition by CBS was a huge stumble, but luckily Slash came to the rescue – even though he played a custom copy, but it looked like a Les Paul. The whole advanced materials and robot tuners were a joke (IMO). And for a while, build quality suffered immensely. But what I’ve been seen over the last few years is a seeming return to much higher build quality standards.
Hopefully, KKR can get it right this time…
Guitar Gear 
Gibson has made some really stupid decisions over the years and I understand a lot of people just want old style Gibson guitars that are well made, but I don’t fault them for trying to stay current with the other guys who are utilizing technology to build superior guitars.
If someone prefers a 66 Ford Mustang over a 18 Ford Mustang, it’s a solid choice for the owner. You can’t get the same engine purr in the new model. The same goes for guitars. My old guitarist had a nice new Gibson that was self tuning. Yes, it seems blasphemous, but it made his job a little easier every night. The same with advanced materials. They’re advanced for a good reason…..they’re better.
They’re not losing money on their guitars. It’s the other stuff doing them in.
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I blogged about Gibson recently too….what a circus! Seems that the new range, which was meant to be a return to basics, has confused more than a few….
That’s for sure. I just played a Les Paul Heritage. Nice guitar. But Gibson in recent years has really blown it with their models. It was much easier when there was the Jr., Special, Standard, Custom, Re-issue models. Straight-forward and everyone knew what they were getting. But they came up with the Player, Heritage, Robot, etc. Totally confused the issue.
Yes and that tuning machine… What a disaster. Don’t think they paid the German company for that tech either. They may be sued