Two months ago, the Nashville Post reported that legendary guitar company Gibson may be filing for bankruptcy. Today, the company made it official.
The company cited a "devastating" financial fall. It also announced that it will close its Innovation unit as part of the Chapter 11 filing. That unit makes products like Phillips headphones and speakers. Gibson acquired the Innovation unit in 2014, a move that ultimately proved to be a huge financial burden.
Gibson is, of course, known for making iconic guitars like the electric Les Paul and acoustic J-45. Those guitars appear on countless classic country, rock, blues and other records around the world.
But in the past two decades, the Nashville company also started creating interesting concepts that ultimately flopped in the marketplace. Like the Gibson Robot Guitar, a self-tuning guitar that took a decade and million of dollars to develop. The Washington Post highlighted the ultimately failed concept in a burning piece called "The Death Of The Electric Guitar."
However, it's not all bad news, according to Bloomberg. The bankruptcy filing includes a turnaround plan to refocus on guitar building. It also gives creditors some ownership of Gibson.
The company currently claims about $500 million in debt. The agreement includes an additional $135 million to fund continuing operations. That includes its Nashville and Memphis factories, as well as a factory in Bozeman, Mont.
Despite an overall decline in guitar sales, the company remains one of the top two guitar brands in the entire world. Founded in 1894, Gibson sells about 170,000 guitars worldwide every year. It also manufacturers other musical equipment, including amps, turntables and more.