Sounds to me like it was gutted by one of those stupid liquidating businessmen who rip out the core product and replace it with making trinkets. Gibson = Guitars. Not Gibson = Trinkets.
At least someone has woken up to this fact and is now making guitars again.
At least someone has woken up to this fact and is now making guitars again.
If any gutting is going on it will happen now.
Henry J owned Gibson for over 30 years, having bought them when they were months from bankruptcy in 1986 and they never stopped making (overpriced) guitars. He did however expand unwisely into areas Gibson should have nothing to do with.
Henry J owned Gibson for over 30 years, having bought them when they were months from bankruptcy in 1986 and they never stopped making (overpriced) guitars. He did however expand unwisely into areas Gibson should have nothing to do with.
I haven't read the filing -- Gibson may have succumbed to the bankruptcy filing of "Guitar Center" -- guitar sales have been declining for years. Perhaps they were a creditor.
fwiw, we got stuck with a bad receivable from a supplier to "Toys R Us" -- our customer is probably going into the toilet since they had a lot of receivables from the toy retailer. that's how the chain of events unfold --
US bankruptcy is very different from UK -- and "commonwealth country" forms where liquidation often ensues.
fwiw, we got stuck with a bad receivable from a supplier to "Toys R Us" -- our customer is probably going into the toilet since they had a lot of receivables from the toy retailer. that's how the chain of events unfold --
US bankruptcy is very different from UK -- and "commonwealth country" forms where liquidation often ensues.
This ripple effect has been a feature of our economy for a while. It was a big feature of the 2007-2009 crash. Everything was (and still is) bundled up in these "securities" where everything in the bundle is collateral for everything else. So, as the "junk" assets tank, there is a "tipping point" where everything goes down the sewer at once, good and bad.
Plus the new business models revolve around amassing "financial assets" and data analytics, not producing durable goods. My neighbor likes to brag that he makes $400K/yr, 1/100 of a cent at a time. As far as data analytics goes, it's just mental masturbation to me - 100% non-productive. And perfectly profitable, productive companies are bought up just to put them out of business. Potash and Kapstone are two recent victims; hundreds or thousands will be put out of work just to eliminate competition.
Maybe I'm just a grumpy old fart, but this new economy is a bunch of bull to me.
Plus the new business models revolve around amassing "financial assets" and data analytics, not producing durable goods. My neighbor likes to brag that he makes $400K/yr, 1/100 of a cent at a time. As far as data analytics goes, it's just mental masturbation to me - 100% non-productive. And perfectly profitable, productive companies are bought up just to put them out of business. Potash and Kapstone are two recent victims; hundreds or thousands will be put out of work just to eliminate competition.
Maybe I'm just a grumpy old fart, but this new economy is a bunch of bull to me.
The reason that Pope Clement XIV suppressed the Jesuit order in the 1700's was a result of the "Ripple Effect" from imprudent investment by their treasurer in land, or debt instruments backed by land, in Louisiana. The ripples continued -- the French and Indian Wars essentially bankrupted the "ancien regime" leading to the guilotine!
Its getting harder to make money partly due to imports.
I looked into selling amplifier modules and was blown out of the water by Asian sellers.
They could ship it half way around the world and sell it for less than I could do local postage never mind the product as well !
I wrote some PCBCAD software and had quite a good run with it on ebay then got blown out of the water by 3 competitors who all came along about the same time.
What was making a reasonable profit now makes next to nothing.
In some ways it is counter productive. If I don't make money then I cant buy anything.
I looked into selling amplifier modules and was blown out of the water by Asian sellers.
They could ship it half way around the world and sell it for less than I could do local postage never mind the product as well !
I wrote some PCBCAD software and had quite a good run with it on ebay then got blown out of the water by 3 competitors who all came along about the same time.
What was making a reasonable profit now makes next to nothing.
In some ways it is counter productive. If I don't make money then I cant buy anything.
Actually Gibson's guitar making operation and custom shop are extremely profitable. The problem comes from Gibson Innovations a business they acquired about 4 years ago which amongst other things pays Philips royalties to use the brand name on their consumer products - it is this operation primarily that caused Gibson's financial difficulties. (Philips, Onkyo and another I can't remember)
Here is the score from a very reliable source: Guitar-Maker Gibson Brands Files for Bankruptcy - WSJ
The new investors are rather sensitive to the nature of the core business and are likely to do anything necessary to keep it intact, the peripheral operations are in big trouble.
Here is the score from a very reliable source: Guitar-Maker Gibson Brands Files for Bankruptcy - WSJ
The new investors are rather sensitive to the nature of the core business and are likely to do anything necessary to keep it intact, the peripheral operations are in big trouble.
You could read it.
The last-straw was the Auto-Tune guys wanting to be paid.
Guitar Center has its own problems, and would be motivated to be accommodating, or the whole house of cards would collapse.
Guitar sales are not collapsing, much. Gibson should have little trouble on that side of the books.
It appears that Gibson's boss (who did save Gibson in the 1980s) has been buying tech-toy companies and then not making money on them. He may have a Grand Vision. But he's pissed-off a lot of people. At this point he is likely to get a token salary and be ignored by the new board.
Gibson *brand* will never die. Who runs Gibson, and who makes what products, is up for grabs.
He's retained as a consultant and out of the picture in a year, but will get a (small) silent stake in the reorganized company. I think they were rather generous with him TBH.
Yes, he had a vision, and your other comments are on point.
Yes, he had a vision, and your other comments are on point.
Maybe an Epiphone? (Gibson owned) I don't play and have been away from that world for a long time, and was never good at ID'ying guitars..
I was lucky enough to attend as a sponsor Les Paul's 80th birthday party in 1995 at Iridium Club in NYC. Great guitar players from around the world were there, many taking some time on stage. Several officers of Gibson were in attendance and presented Les with a gift, and also indicated they were naming one of their corporate HQ buildings after him. I think in subsequent years they pursued a diversification strategy to grow a global network of products. It appears they took on too much debt. Sometimes it is better to stick to the core business, I guess. I am not sure what kind of margins there are in guitars. Probably not very good, as I bet the bulk of sales come from the low-margin, entry level units. For the sake of good music, I hope they reorganize and recover, or get bought by someone who loves music.
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The custom shop apparently is a pretty big profit center for them.
There was a rescue plan in place when they declared bankruptcy. WSJ article I linked to details it pretty well. (post # 10)
There was a rescue plan in place when they declared bankruptcy. WSJ article I linked to details it pretty well. (post # 10)
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It seems to me that the electric guitar has become a mature instrument - innovation has slowed considerably and there is more interest today in classical versions than anything new. What propelled the industry in the past was innovation coupled with linking their brand with a best selling guitarist. Then all the youngsters wanted the latest innovations that they saw their stars using. That business model is never coming back. The guitar companies don't have much they can innovate because electronics downstream now allow the artist to create any darn sound they please, no hardware innovation will give them something new. Back in the day it was the other way around. Since then it's hard to grow the business, forcing companies to take risks away from their core. Can any new owner of Gibson tell their shareholders that they are running a growing company in a growth industry ? not really. And where's the next guitar hero ready to endorse a new guitar to boost sales - and who buys them other than us baby boomers ?
This is what's missing from the equation. The middle class in the US is getting squeezed.
I remember a long time ago, when I was in high school, hearing a lecture about "the future." This was the 1970s mind you. The speaker waxed on about how automation, computers, and ever more efficient business models were going to free up so much time. Oh, workers were going to live the life of leisure!
The first thing I thought was how we were going to make the money we needed to enjoy our free time if we didn't work a 40 hour work week. The lecturer seemed to hint that our standard of living would continue to improve despite all the "leisure time."
Well we're getting our leisure time. So much has been outsourced that even highly educated people are not able to find suitable work after being put through the ringer in 2007-2009. I guess the whole economy has fundamentally changed in my lifetime.
There is going to have to be a move towards a universal benefit if governments want to maintain a consumer society, I don't see the transition being swift or pretty
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