Business

Guitar Center Files for Bankruptcy


The company, which was struggling to compete against online rivals even before the pandemic, was hit hard when it was forced to temporarily close most of its stores earlier this year.


“This is an important and positive step in our process to significantly reduce our debt and enhance our ability to reinvest in our business to support long-term growth,” Guitar Center’s chief executive, Ron Japinga, said in a statement.


Guitar Center’s bankruptcy is the latest example of how the coronavirus pandemic has divided American retail into two groups, with a growing gap between the strongest and weakest companies .


Even before the pandemic, Guitar Center’s business was threatened by online rivals like the website Sweetwater, and the company was heavily indebted as a result of a private-equity led buyout years earlier.


It missed an interest payment of roughly $45 million last month, putting it on the path to a bankruptcy filing, The New York Times previously reported .


It said in the court filing that its “significant debt burden and upcoming maturities, coupled with the economic upheaval created by the persistence of the Covid-19 pandemic, could not be resolved through short-term measures.”






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