Gibson Guitars: Iconic guitar maker Gibson is planning a return to traditional guitars and ukuleles after filing for Chapter 11 bankruptcy protection in May of this year. The company plans on disbanding some of its side businesses inclusive of audio and home entertainment sectors.
The company was roughly $500 million USD in debt and it’s filing came as a shock to many; who could imagine the iconic guitar maker who supplied musical legends Slash, Jimi Hendrix, Eric Clapton and BB. King (to name only a few) potentially closing its business doors?
How Can Gibson Grow From Here?
The last year has seen the beginnings of a potential turn around for Gibson, it’s CEO Henry Juszkiewicz divulged some of the steps taken; “Over the past 12 months, we have made substantial strides through an operational restructuring. We have sold non-core brands, increased earnings, and reduced working capital demands,”.
One of the major causes of Gibson’s financial woes came from an acquisition it made of one of these “non-core brands”. In 2014 it bought an audio and entertainment business from tech-giant Phillips with the hopes of reaching more music fans. This acquisition was a mistake.
Today, in an interview with Reuters, Juszkiewicz said he was examining more ways that Gibson could grow its appeal into new areas and beyond pricey guitar models (which usually range somewhere above the $2,000 mark). The idea is to entice younger players and more female players to Gibson instruments while still staying true to the core business Gibson is known for — quality guitars.
The solution to Gibson’s problem may lie in the modest ukulele. An industry-wide boom in ukulele sales has been occurring in recent months, and while Gibson does create some ukulele’s under its subsidiary brand Epiphone, Gibson itself has not made any since the 1930s.
“One of the most valuable ukes [ukulele’s] you can buy today is a Gibson uke made in the ‘30s. We’ve been there,” Juszkiewicz said.
A return to ukuleles would mean the company would be “getting back to the basics.”
Getting back to basics also means a continued return of focus on the core guitar business and a reorganizing of its musical instrument business as a whole under the new ownership of its lenders KKR Credit Advisors.
Who knows, the simple ukulele may generate some much-needed revenue.
Feature Image: GoogleImages/Business Insider