Guitar Center's financial troubles have been ongoing for years now, and a new report from The New York Times claims the struggling music instrument chain is planning on filing for bankruptcy. The retailer missed a roughly $45 million dollar interest payment this month. They have 30 days of grace period before it would be forced in default.
As a result of their low funds, Guitar Center has began reaching out to creditors to discuss a plan to file for bankruptcy and how they would emerge out of it in early 2021.
This isn't the first time this year that Guitar Center is on the verge of bankruptcy. The retailer skipped an interest payment in April "with a distressed debt exchange." The New York Times reports that while the company did not end up filing bankruptcy then, they did get a downgraded credit rating noting the company's "untenable" capital structure.
According to the report, the company had 10 consecutive quarters of growth until the pandemic hit. The company is currently owned by private equity firm Ares Management.
Do you still use Guitar Center or have you moved onto other retailers?