Guitar Center Files for Chapter 11 Bankruptcy
Instrument superstore Guitar Center has officially filed for Chapter 11 bankruptcy.
However, that doesn’t mean the end of the store.
According to the company, the financial decision will allow business operations to “continue uninterrupted” as the filing injects “$165 million in new equity investments” to “recapitalize the company.”
The move will also reduce the store’s debt, which currently stands at nearly $800 million.
“Today we announced a very significant and positive step forward in ensuring the long-term financial strength of Guitar Center,” CEO Ron Japinga said via press release. “This agreement will allow us to significantly reduce our debt and reinvest in our business to better serve our customers and fulfill our mission to bring more music to the world. With ten consecutive quarters of growth before the impact of COVID-19, we are pleased with our resilient financial performance in these difficult times created by the pandemic. Following this financial restructuring process, we will be better equipped to execute and invest in our strategic growth initiatives and we will continue to deliver through the strength of our brands, the availability of our stores, associate relationships focused on the customer, innovative music education programs and our expanding digital solutions.