Gibson in Bankruptcy

The sad news yesterday was the announcement that Gibson Brands was filing for bankruptcy.

Gibson, which makes its Gibson-brand guitars in Tennessee and Montana, employs about 875 people on the instrument side of the business.

The company is particularly dominant in the market for high-end guitars, with market share of more than 40% of electric guitars priced more than $2,000. Gibson also makes instruments under a number of brand names including Dobro, Epiphone, Kramer and Tobias. The company also owns such brands as Slingerland drums and Wurlitzer pianos.

But it hasn’t been enough to overcome the debt the company took on to finance acquisitions of home-entertainment and audio-equipment makers years ago. Among businesses the company has added are some of Royal Philips’s home-entertainment systems, TEAC home audio electronics and Onkyo stereos.

Under a restructuring pact filed with Gibson’s chapter 11 bankruptcy petition, a group of bondholders—among them funds managed by KKR & Co., Silver Point Capital LP and Melody Capital Partners LP—will take control of Gibson’s musical-instrument business.

Follow the link above to the Wall Street Journal article that has a photo gallery of famous musicians who played Gibson guitars. Such as B. B. King:

I guess that the news isn't so bad. The people that acquired the company in 1986 made a lot of business missteps including with guitar design and those mistakes are coming back to haunt them. The new owners, a shadowy investment firm, will hopefully put the company back on course again. And yes, you will still be able to buy Gibson guitars. Way back when I played electric guitar, I owned an old Les Paul model from the 1950s. Never should have sold it!

Let's listen to B. B. King showing us how it's done on his Gibson named "Lucille":