Gibson files for bankruptcy, plans to dump audio brands

Yesterday, Gibson filed its chapter 11 bankruptcy protection in the US, with a plan to re-focus its attentions on the musical instrument and equipment business under the new ownership of – and $135m (£99m) loan from – its new lenders.

The Nashville-based company is $500m (£367m) in debt, which it largely blames on poor sales in its consumer electronics division.

Brian J. Fox, a managing director at Alvarez & Marsal (set to be Gibson’s chief restructuring officer), said the electronics business had become "trapped in a vicious cycle in which it lacked the liquidity to buy inventory and drive sales," according to a Bloomberg report.

While the company won’t comment on how the restructuring will impact the relationship between it and Gibson, it has posted the following: ‘the possible impacts on the day-to-day operations of TEAC are estimated to be insignificant. While Gibson owns a majority interest in TEAC, TEAC operates autonomously from Gibson including suppliers, distribution channels, customers, legal agreements, bank and financial arrangements, human resources and personnel. TEAC develops and executes its own business strategies and is responsible for the results. TEAC will continue its business operations as normal while Gibson is working through its restructuring.’

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Becky is a hi-fi, AV and technology journalist, formerly the Managing Editor at What Hi-Fi? and Editor of Australian Hi-Fi and Audio Esoterica magazines. With over twelve years of journalism experience in the hi-fi industry, she has reviewed all manner of audio gear, from budget amplifiers to high-end speakers, and particularly specialises in headphones and head-fi devices.

In her spare time, Becky can often be found running, watching Liverpool FC and horror movies, and hunting for gluten-free cake.