5 ms·

Guitar-maker Gibson Brands files for bankruptcy

30 points by ilamont 9y ago

fenwick67 9y ago
This is a pet theory but the guitar hero/rock band craze seemed to prop up the real guitar industry for a bit, suddenly kids everywhere knew who Slash is and got a $150 guitar for Christmas, when it declined around 2010 I think they lost some of that market.
- chasedehan 9y ago
  No way you could get a Gibson for anywhere near $150 - the demographic looking for the toy guitars isn't the same as the one that would buy a Gibson. Doubtful this had anything to do with it.
  - Finnucane 9y ago
    Epiphone is Gibson's entry-level brand.
- mikestew 9y ago
  Word on the street is that kids just don't want to play guitars anymore. Throw some samples into GarageBand, and have at it. One young lady describes herself as being considered "weird because I play a guitar". I am a long way from childhood, but the impression I get is that the age of the guitar-playing rock god might be taking a breather for a bit. But in Gibson's case, it's debt-laden acquisitions. They might sell fewer Les Paul's than they used to, but probably enough to stay in business (Fender and Martin don't seem to be going anywhere). One additional point of data is the Nashville flood from around ten years ago. The mandolin business came back to life, but IIRC Gibson just gave up on making banjos after that. How the flood affected the rest of the business, I don't know.
  - s2g 9y ago
    They are also a notoriously bad company to work for. They have a bad rep for quality control. They don't really seem to listen to the market all that much. Apparently the CEO is just a horrible boss.
    - mikestew 9y ago
      They are also a notoriously bad company to work for. They're also a notoriously bad company to be a dealer for. "Here, have a bunch of musical instruments that might or might not be saleable in your area. It matters not, you're stocking them if you want to remain a Gibson dealer." So they lost a lot of mom n' pops. I dunno, can Guitar Center keep them in business? Oh, forgot that GC is in trouble, too. I don't argue that Henry J., the current CEO, is a great guy and a wonderful businessman. However, point in his favor is that he and his fellow financiers bought Gibson for five million dollars in the 80s. Five million bucks: that's how low Gibson had fallen (and rightly so, given the shit they turned out in the 70s). Henry is just some banker that played guitar on the weekends who spotted a potential bargain. However, had that purchase not taken place, we might not even be having a conversation about a guitar maker that went out of business thirty years ago.
  - squarefoot 9y ago
    "Word on the street is that kids just don't want to play guitars anymore." This pretty much started during the early 80s when everyone and his cat would want to impress girls playing a keyboard or a sax, then glam rock happened, followed by grunge and guitar became appealing again. Time changed since then, as did the interest for guitars, but it's not going away anytime soon; let's hope Gibson manages to survive the period. Today I'd say there's more interest for drums than guitar or bass: in my band a while ago I was among the 4 people who could play drums and we had only one guitarist, way different from say the 70s. What surely changed since the early days of guitar factories is the quality of unknown brand guitars; today it still requires some good work to manufacture a good guitar, but it's definitely much much easier than it was decades ago, and the quality difference doesn't reflect anymore the price delta.
    - freedomben 9y ago
      What are some good manufacturers that are less expensive? I haven't bought a guitar in about 15 years but I'm ready to buy a new one. No idea what the landscape looks like these days.
      - reason-mr 9y ago
        Electric - best bank for the buck by a mile : a base level fender MIM or USA made guitar; with the advantage that it's like hot-rodding cars in that you can take it apart and put it back together backwards. Acoustic - consider a Larrivee or a Taylor. If that's too expensive, go with a Seagull or Takamine. All of the above are decent instruments and not junk.
      - reason-mr 9y ago
        Oh an please, if buying new, support a decent, local, guitar shop (not a chain!) and get a "setup" done on your new guitar. Your fingers will thank you and so will the local guitar shop + you will have somewhere to go back to when things stop working for you.
        freedomben 9y ago
RobLach 9y ago
Is there a known reason why a guitar maker bought up a bunch of high end audio companies? I’d like to hear the story behind this.
- mikestew 9y ago
  In summary, the impression I get is that the current CEO wants to be a businessman who runs a company that happens to make guitars, in contrast to wanting to run a guitar company. With the former, you could a bunch of debt-driven acquisitions that might, or might not be, a good buy. But now you're not just the CEO of a guitar company, you're the CEO of a conglomerate. Big swingin' dick, you are. In contrast to Martin, who has been making guitars, and the occasional mandolin or ukulele, for well over a hundred years. That's pretty much all they do, and as far as I can tell they're financially fit. Probably because Mr. Chris Martin is content running a guitar company. That's just my arm chair analysis. I otherwise have no idea what the hell Gibson wants with, say, Teac.
  - wilsonnb 9y ago
    Martin also sells mostly or entirely acoustic instruments, not electric. I would guess that acoustic guitar sales have remained more consistent than electric guitar sales over time. Part (most?) of Gibson's problem is that the guitar just isn't as popular as it used to be.
  - totalforge 9y ago
    You're correct. The CEO is a former hedge fund guy, who has purchased a number of companies, shut them down, and added the IP to a portfolio. If Gibson ends up with new leadership out of this they will have a chance.
- gbraad 9y ago
  they also acquired (and basically killed) Stanton, Deckadance, Cakewalk, etc... and HarmonyCentral.com
  - Optimal_Persona 9y ago
reason-mr 9y ago
As guitar player, I can tell you that there is at present a huge oversupply, particularly of electric guitars, relative to the number of guitar players there are around currently. Some of this is of course caused by people with oodles of spare cash taking up playing guitar, only to find that it is quite hard and time consuming and then dumping their catch-and-release nice guitars for much less than retail. Regardless, one only has to browse craiglist "musical intruments" to see many incredible guitars, lightly used amps and other equipment selling for far less than retail. The result - people who actually know what they are doing and have some spare money are scooping up bargains. Plus of course kids are sampling, etc, can't be bothered, and/or playing nicer acoustic guitars - as made by Martin, Collings, etc. Also - as other posters have pointed out - gibson diversified over its means. But it will come back, and then we will own all of the guitars :)
Gravityloss 9y ago
It's odd that they don't survive? It's basically a license to print money. Many factories make good guitars all over the world but Gibson is one of those that can charge a lot just for the brand. (At least as long as the guitars are actually good.)
- squarefoot 9y ago
  That's the issue. If someone gets the name just to sell crap guitars built in China with no quality control then the brand is screwed forever.
  - Gravityloss 9y ago
    As far as I know, Gibson guitars have been okay during the years. Opposed to say, Fender which had some bad years.

30 points by ilamont 9y ago

This is a pet theory but the guitar hero/rock band craze seemed to prop up the real guitar industry for a bit, suddenly kids everywhere knew who Slash is and got a $150 guitar for Christmas, when it declined around 2010 I think they lost some of that market.

chasedehan 9y ago
No way you could get a Gibson for anywhere near $150 - the demographic looking for the toy guitars isn't the same as the one that would buy a Gibson. Doubtful this had anything to do with it.
- Finnucane 9y ago
  Epiphone is Gibson's entry-level brand.
mikestew 9y ago
Word on the street is that kids just don't want to play guitars anymore. Throw some samples into GarageBand, and have at it. One young lady describes herself as being considered "weird because I play a guitar". I am a long way from childhood, but the impression I get is that the age of the guitar-playing rock god might be taking a breather for a bit. But in Gibson's case, it's debt-laden acquisitions. They might sell fewer Les Paul's than they used to, but probably enough to stay in business (Fender and Martin don't seem to be going anywhere). One additional point of data is the Nashville flood from around ten years ago. The mandolin business came back to life, but IIRC Gibson just gave up on making banjos after that. How the flood affected the rest of the business, I don't know.
- s2g 9y ago
  They are also a notoriously bad company to work for. They have a bad rep for quality control. They don't really seem to listen to the market all that much. Apparently the CEO is just a horrible boss.
  - mikestew 9y ago
    They are also a notoriously bad company to work for. They're also a notoriously bad company to be a dealer for. "Here, have a bunch of musical instruments that might or might not be saleable in your area. It matters not, you're stocking them if you want to remain a Gibson dealer." So they lost a lot of mom n' pops. I dunno, can Guitar Center keep them in business? Oh, forgot that GC is in trouble, too. I don't argue that Henry J., the current CEO, is a great guy and a wonderful businessman. However, point in his favor is that he and his fellow financiers bought Gibson for five million dollars in the 80s. Five million bucks: that's how low Gibson had fallen (and rightly so, given the shit they turned out in the 70s). Henry is just some banker that played guitar on the weekends who spotted a potential bargain. However, had that purchase not taken place, we might not even be having a conversation about a guitar maker that went out of business thirty years ago.
- squarefoot 9y ago
  "Word on the street is that kids just don't want to play guitars anymore." This pretty much started during the early 80s when everyone and his cat would want to impress girls playing a keyboard or a sax, then glam rock happened, followed by grunge and guitar became appealing again. Time changed since then, as did the interest for guitars, but it's not going away anytime soon; let's hope Gibson manages to survive the period. Today I'd say there's more interest for drums than guitar or bass: in my band a while ago I was among the 4 people who could play drums and we had only one guitarist, way different from say the 70s. What surely changed since the early days of guitar factories is the quality of unknown brand guitars; today it still requires some good work to manufacture a good guitar, but it's definitely much much easier than it was decades ago, and the quality difference doesn't reflect anymore the price delta.
  - freedomben 9y ago
    What are some good manufacturers that are less expensive? I haven't bought a guitar in about 15 years but I'm ready to buy a new one. No idea what the landscape looks like these days.
    - reason-mr 9y ago
      Electric - best bank for the buck by a mile : a base level fender MIM or USA made guitar; with the advantage that it's like hot-rodding cars in that you can take it apart and put it back together backwards. Acoustic - consider a Larrivee or a Taylor. If that's too expensive, go with a Seagull or Takamine. All of the above are decent instruments and not junk.
    - reason-mr 9y ago
      Oh an please, if buying new, support a decent, local, guitar shop (not a chain!) and get a "setup" done on your new guitar. Your fingers will thank you and so will the local guitar shop + you will have somewhere to go back to when things stop working for you.
      - freedomben 9y ago

RobLach 9y ago

Is there a known reason why a guitar maker bought up a bunch of high end audio companies? I’d like to hear the story behind this.

mikestew 9y ago
In summary, the impression I get is that the current CEO wants to be a businessman who runs a company that happens to make guitars, in contrast to wanting to run a guitar company. With the former, you could a bunch of debt-driven acquisitions that might, or might not be, a good buy. But now you're not just the CEO of a guitar company, you're the CEO of a conglomerate. Big swingin' dick, you are. In contrast to Martin, who has been making guitars, and the occasional mandolin or ukulele, for well over a hundred years. That's pretty much all they do, and as far as I can tell they're financially fit. Probably because Mr. Chris Martin is content running a guitar company. That's just my arm chair analysis. I otherwise have no idea what the hell Gibson wants with, say, Teac.
- wilsonnb 9y ago
  Martin also sells mostly or entirely acoustic instruments, not electric. I would guess that acoustic guitar sales have remained more consistent than electric guitar sales over time. Part (most?) of Gibson's problem is that the guitar just isn't as popular as it used to be.
- totalforge 9y ago
  You're correct. The CEO is a former hedge fund guy, who has purchased a number of companies, shut them down, and added the IP to a portfolio. If Gibson ends up with new leadership out of this they will have a chance.
gbraad 9y ago
they also acquired (and basically killed) Stanton, Deckadance, Cakewalk, etc... and HarmonyCentral.com
- Optimal_Persona 9y ago

reason-mr 9y ago

As guitar player, I can tell you that there is at present a huge oversupply, particularly of electric guitars, relative to the number of guitar players there are around currently. Some of this is of course caused by people with oodles of spare cash taking up playing guitar, only to find that it is quite hard and time consuming and then dumping their catch-and-release nice guitars for much less than retail. Regardless, one only has to browse craiglist "musical intruments" to see many incredible guitars, lightly used amps and other equipment selling for far less than retail. The result - people who actually know what they are doing and have some spare money are scooping up bargains. Plus of course kids are sampling, etc, can't be bothered, and/or playing nicer acoustic guitars - as made by Martin, Collings, etc. Also - as other posters have pointed out - gibson diversified over its means. But it will come back, and then we will own all of the guitars :)

Gravityloss 9y ago

It's odd that they don't survive? It's basically a license to print money. Many factories make good guitars all over the world but Gibson is one of those that can charge a lot just for the brand. (At least as long as the guitars are actually good.)

squarefoot 9y ago
That's the issue. If someone gets the name just to sell crap guitars built in China with no quality control then the brand is screwed forever.
- Gravityloss 9y ago
  As far as I know, Gibson guitars have been okay during the years. Opposed to say, Fender which had some bad years.