Guitar Center Files Chapter 11 Bankruptcy

Guitar Center officially entered Chapter 11 Bankruptcy, less than one month after the rumors started to circulate. 

Guitar Center has announced that the company will be moving forward with a reconstruction plan, following Moody’s Investor Services downgrading their credit earlier this year. Investors from groups such as Ares Management, Brigade Capital and Carlyle Group have pledged around $165 million to this new plan. 

Guitar Center is planning to reduce their debt by nearly $800 million. With a new round of investments coming in, they are also “reevaluating” all of their 269 stores. This most likely means they will be closing the ones doing poorly. 

Guitar Center’s CEO, Ron Japinga, has remained positive amongst all the negotiations and developments involving Guitar Center.

He stated, “This agreement will allow us to significantly reduce our debt and reinvest in our business in order to better serve our customers and deliver on our mission of putting more music in the world."