Guitar Center can’t seem to get a break. The US retailer was faced with trouble earlier this year, and it seems things have not gotten much better. According to the New York Times and Music Trades, the chain missed an interest payment of about $45 million earlier this month. This kicked off a 30-days grace period which could end in default.
Guitar Center filing for bankruptcy?
According to recent articles in the New York Times and Music Trades magazine, Guitar Center was unable to pay an interest payment of roughly $45 million earlier this month, triggering a grace period of 30 days. The US’ largest retailer of musical instruments has now turned to creditors to work on a plan that would involve it to file bankruptcy this year, and emerge from it in 2021. The company is currently about $1.8 billion in debt.
A difficult year
This announcement is probably not a huge surprise to those following Guitar Center in the news. The company had already been experiencing difficulties earlier this year, when it had to shut down many of its facilities and furlough staff. Already under stress, it seems the COVID-19 crisis just exasperated an already tricky situation.
End of an era?
On the other side of the pond, Gitarre&Bass magazine reports that mega music instrument German retailer, JustMusic will be shutting down all its facilities outside Berlin. The reasons seem to be the current economic situation and industry trends.
Are we slowly witnessing the end of brick and mortar music shops? Let us know your thoughts in the comments section below.
UPDATE – 23 November
Guitar Center announced on 22 November that it has filed for Chapter 11 bankruptcy. According to the filing, the retailer – currently facing some $1.3 billion in debt – intends to reduce its debt to $800 million. While the company goes through the restructuring process, it has pledged to continue paying its employees and maintain its in-store and e-commerce operations.