Home https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Business https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Guitar Center files for Chapter 11 bankruptcy

Guitar Center files for Chapter 11 bankruptcy

The 61-year-old company – the largest retailer of musical instruments in the United States – tried to stay afloat during the coronavirus pandemic by offering virtual music lessons. But Guitar Center was forced to close many of its stores in March during a nationwide blockade and struggled to get customers to buy instruments as the economy headed south.

The Guitar Center has 269 seats, many of which are in malls that fought long before Covid-19. Pedestrian traffic in malls has plummeted, and stores like Guitar Center, which depend on people shopping on their own, are among the hardest hit this year.

In the bankruptcy case, the company said it had received up to $ 1

65 million in new capital investment, and creditors had agreed to reduce the company’s debt by nearly $ 800 million.

The main owner of the company, Ares Management Corporation, as well as the new capital investor Brigade Capital Management and a fund managed by The Carlyle Group, will help finance Guitar Center through bankruptcy.

“This is an important and positive step in our process to significantly reduce our debt and strengthen our ability to reinvest in our business to support long-term growth,” Guitar Center CEO Ron Japing said in a statement.

The company will continue to operate during the bankruptcy process. But he may not be able to take advantage of the holiday shopping boom. More than a quarter of Americans – 28% – say they will spend less on holiday gifts this year than last year, Gallup said in a new study, noting the highest Gallup rate recorded in that category since 2012. here.

“We will continue to serve our customers and fulfill our mission to offer more music in the world,” Japinga said. He added that the company expects to complete the process by the end of the year.

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