After 116 years in business, legendary guitar company Gibson may be facing bankruptcy. According to a new report from the Nashville Post, the instrument maker is up against the clock.
Gibson manufactures iconic guitars like the Les Paul, SG and Hummingbird. Artists from Slash and Jimmy Page to Chet Atkins and The Everly Brothers use their guitars in their signature sounds. Gibson also has a huge stake in bluegrass too, thanks to artists like Earl Scruggs.
But the Nashville-based company owes hundreds of millions of dollars. And Gibson may soon have to pay those loans back if they can't reach an alternative deal in the coming months.
In six months, $375 million worth of notes will mature, meaning they need to be repaid or refinanced. "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," the Post says. To make conditions worse, Chief Financial Officer Bill Lawrence recently left the company after less than one year on the job.
So what does all of this mean for Gibson? If they don't reach a new deal or come up with money quickly, one of the most globally recognized brands may be headed to bankruptcy court. If that happens, longtime CEO Henry Juszkiewicz may lose the company.
Gibson started in Kalamazoo, Michigan all the way back in 1902. Since then, the company became one of the most-recognized names in music.
But the company faces increasing competition from smaller boutique manufacturers. Coupled with some questionable business decisions (like the ill-fated "robot guitar"), Gibson saw its overall market share decrease. That's not to say the brand isn't still a huge name. The company does more than $1 billion in annual revenue. But with debt it can't currently pay, the future for the brand is very much uncertain.