We’ve been hearing about declines in guitar sales for years. Now, one of the most storied guitar makers in history — Gibson — may be in serious trouble.

Gibson Guitar is now falling on hard times, and softer guitar sales are just part of the picture. According to details surfacing this week, the company remains deluged in debt, with desperate sell-offs to service a growing list of creditors.

Ringing the scary alarm is Nashville Post reporter Geert De Lombaerde, who unearthed mountainous debt obligations and a worsening financial crisis. De Lombaerde pointed to a recent, $16.6 million coupon payment by Gibson to service $375 million in senior secured notes that come due this year.

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The debt pile wasn’t a secret to frustrated bond holders. But De Lombaerde is seeing an iceberg ahead. “The situation facing the iconic Nashville-based music instrument maker, which has annual revenues of more than $1 billion, is far from normal,” De Lombaerde remarked. “CFO Bill Lawrence recently left the company after less than a year on the job and just six months before $375 million of senior secured notes will mature.”

“On top of that, another $145 million in bank loans will come due immediately if those notes, issued in 2013, are not refinanced by July 23rd.”

Gibson Guitar factory in Kalamazoo, MI, 1936 (Kalamazoo Public Library)

Gibson Guitar factory in Kalamazoo, MI, 1936 (Kalamazoo Public Library)

Gibson Guitar started in 1902, and has been interwoven into the musical life of America ever since.

Back in 1952, the company produced its first signature Les Paul, one of the most famous guitar series of all time. The rest, as they say, is history. But that storied history is making the present situation harder to stomach.

Just recently, Gibson sold its ownership of a former Baldwin Piano warehouse for $6.4 million. Now, the guitar maker is trying to offload an even bigger Nashville property: the Valley Arts building, located on Church Street. The selloff is expected to draw $11 million. Both payments are likely to evaporate almost instantly to service a growing debt tranche.

We’ve read a separate report that Gibson is selling off Baldwin entirely — though that hasn’t been confirmed.

Gibson still pulls annual revenues north of $1 billion. But multiple investors, bondholders, and analysts are now saying the ‘b-word’ out loud.

“This year is critical and they are running out of time — rapidly,” Kevin Cassidy, a senior credit officer at Moody’s Investors Service, told the Post. “And if this ends in bankruptcy, [CEO/owner Henry Juszkiewicz] will give up the entire company.”

Moody’s has already downgraded Gibson. And others are projecting a major change ahead — in leadership, or total control of the company.

One question is whether sagging guitar sales are playing a role here. This has been a growing problem for years, thanks to surging interest in EDM and rap. But broader cultural shifts are also putting the guitar in the rearview. Indeed, the recurring ‘rock & roll is dead’ cliché may finally be coming true — and seriously impacting Gibson’s bottom line.

Incidentally, Moody’s also downgraded Guitar Center last year, as well. The mega-retailer, a massive seller of guitars, is saddled with more than $1.6 billion in debt.

The issue of plunging guitar sales became glaringly apparent last year.

That’s when sales figures revealed a serious sales drop over the past decade. Specifically, guitar sales have dropped from approximately 1.5 million units annually to roughly 1 million — all in less than a decade. That’s still a million a year, though this is all heading in the wrong direction.

And buried beneath those top-line statistics is another problem: sinking prices. All of which is great for anyone on the market for a guitar — new or used. But it’s disastrous for a company like Gibson.

One obvious problem is that the guitar is just another toy for younger people today. Up until relatively recently, it was a must-have for a giant percentage of young Americans — all of whom were in love with rock & roll in some form or another. Now, the six-string is just as easily replaced by a turntable, videogame console, or simply a laptop.

And the ‘guitar gods’ of the past are fading, with their adherents downsizing. “I don’t know. Maybe the guitar is over,” Eric Clapton said last year when asked about eroding guitar sales.

“Good question though.”

(http://www.autoadmit.com/thread.php?thread_id=3895956&forum_id=2#35425293)

I think the gibson line is still viable but they own some other underperforming brands like philips that are weighing them down.

(http://www.autoadmit.com/thread.php?thread_id=3895956&forum_id=2#35425320)

https://reverb.com/news/gibson-nods-to-shaggin-wagons-with-new-custom-boogie-van-les-pauls

(http://www.autoadmit.com/thread.php?thread_id=3895956&forum_id=2#35425372)

guitar center on the other hand...

(http://www.autoadmit.com/thread.php?thread_id=3895956&forum_id=2#35425377)

1974 cherry sunburst LP deluxe

1990 studio lite (LMAO is this now considered vintage? It was my first electric when I was 12)

(http://www.autoadmit.com/thread.php?thread_id=3895956&forum_id=2#35426100)

(http://www.autoadmit.com/thread.php?thread_id=3895956&forum_id=2#35428090)

I want that deluxe bro

(http://www.autoadmit.com/thread.php?thread_id=3895956&forum_id=2#35426526)

go

(http://www.autoadmit.com/thread.php?thread_id=3895956&forum_id=2#35426085)

jk, I have a couple strats too.

(http://www.autoadmit.com/thread.php?thread_id=3895956&forum_id=2#35426169)

locking grovers are 180 as fuck.

(http://www.autoadmit.com/thread.php?thread_id=3895956&forum_id=2#35427956)