The county’s largest music instrument retailer was forced to close most of its locations at one point in the pandemic.
Guitar Center has joined a growing list of brick and mortar retailers struggling to stay afloat during the COVID-19 pandemic.
According to a report from The New York Times, the company filed for bankruptcy protections on Saturday, claiming to have entered agreements with creditors that would cut their $1.3 billion debt burden by $800 million. Despite the Chapter 11 filing, Guitar Center remains committed to paying out employees and vendors in full while as it steps into a restructuring phase.”This is an important and positive step in our process to significantly reduce our debt and enhance our ability to reinvest in our business,” said Ron Japinga, a chief executive at the company. “Throughout this process, we will continue to serve our customers and deliver on our mission of putting more music in the world,” Japinga added.
The company was reportedly struggling even before the pandemic hit, experiencing a year-over-year loss of market share to a number of online competitors. And once the pandemic took hold, Guitar Center was forced to temporarily close most US locations. Adding to the strain from COVID-19, the company had taken on a significant amount of debt during a private equity buyout in 2007.
Guitar Center was founded in 1959 by Wayne Mitchell in Hollywood, CA. Originally called The Organ Center (and for a short period, The Vox Center,) the company took on its current name when the rise of The Beatles boosted guitar sales across the country. It continued to expand for decades after, going public in 1997, when it had become the country’s largest retailer of musical instruments.