whats this mean? GC and secured blahblahblah

to pay their loans off or catch them up....ok....so someone believes in them.

ive done the same, borrow a 0% loan to pay off a 27% loan. its like a fake sense of accomplishment. lol

thanks...damn they play with large poker chips!
 
Whether someone believes in them will depend on whether they actually are able to sell these notes on the market. I suspect the announcement was a feeler to test reception of the idea.

They could be paying off more expensive debt, planning to build more stores(!), etc., (Or, the cynic in me wonders, simply stuffing money into those golden parachute cases.)
 
Brick n Mortar collapse.......Think Toys r Us ..... GC is just a big boy toy store........

I rarely buy from the a music store anymore Ebay and Amazon make it all too easy.....I mean we go to Costco and Sams almost every week and pick up consumables and clothes but with the Prime membership and free shipping and no sales tax on a lot of stuff ( 9.25% here in Los Angeles) it's just the best way to do business. Easy free return policy...just drop off at the local Kohls WTF is up with that? Sad to see the Brick n Mortar stores go but for toys it's going to be hard to keep em open...
 
Maybe the small specialty stores will come back. The days of the super chain might be over. I know some of the locally owned music stores still do pretty good because the people who own them are know by the people who buy there.

Might be a good thing.
 
I cant recall what a typical GC needs to be in the black ...(after paying bills and salaries)....it must be pretty huge.
 
I cant recall what a typical GC needs to be in the black ...(after paying bills and salaries)....it must be pretty huge.

Yo CC!

Is that "not happening in the room" quote in your signature from our old pal Harvey Gerst?

It sure was cool having him come around and share his knowledge.

That is till "someone" (who later got the ban :eek:)
insulted and harrassed him enough to decide it was best for him to delete HR.com from his bookmarks. :cursing:
 
yeah Harvey....his studio is down the road a bit from me, my sons band almost recorded there. but locations and logistics with the drummer brought it even closer to home.
HG has a lot of years in...dang.

I didnt know thats why he hadnt been around HR, its good to have some higher-end folk around for Q&A. HG has some wild stories, like the Hendrix guitar and the high end monitors ..like Massive Mastering and the others who've come by to post now and then I think it adds a lot to the forum. When its not fun talking HR anymore, I suppose they have other things to do.
 
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Good article. Sounds logical. The drop in sales will continue or it wont.
The excess of used guitars also drops the supply to demand which has to hurt sales for the OEM but GC might do ok selling more used.
The article mentions Fender too, which I thought they were doing well. Funny the "learn how to play" pop ads are constant on their site. According to this article the campaign to teach teens is going to revive the Guitar interest.

Saw this today...but Im not a lawyer....whats this mean?

Guitar Center, Inc. Announces Early Tender Results for Its Previously Announced Exchange Offer and Consent Solicitation Relating to Its 9.625% Senior Unsecured Notes Due 2020
 
Guitar Center started life in 1959 as a small appliance and home organ store in Hollywood, Calif., and became the Guitar Center in 1964, when it started selling Vox equipment made popular by The Beatles, according to its website.
In 2007, the company was taken private by Mitt Romney’s former private-equity firm Bain Capital in an LBO valued at $2.1 billion that left it saddled with $1.6 billion of high-yield debt. Coming just ahead of the 2008 financial crisis, the company struggled with its high interest payments for several years.

>Fortune>Guitar Center has been losing money every year since, making it a nightmare investment for Bain Capital. Moody’s rated it a lowly Caa2 (defined as “poor standing and subject to very high credit risk”) in November 2010. In its report, the ratings firm stated that “the company’s capital structure is unsustainable over the medium term at current levels of operating performance, and hence the probability of a default has increased.”

Financial cancer spreads>>>
Fender’s debt problem consists not only of what it owes but what it is owed. The company is currently owed $11 million by its biggest customer, musical instruments retailer Guitar Center. Fender’s fortunes are intrinsically linked to Guitar Center. The retailer accounts for nearly a sixth of Fender’s annual sales, and Fender CEO Larry Thomas had previously held the same position at Guitar Center. Thomas was responsible for taking Guitar Center public and then selling it to Bain Capital in 2007. Until the sale, Guitar Center was also partially owned by Weston Presidio.
 
Guitar Center, is $1.6B in debt
Gibson is $500 million in debt
Fender is $100m in debt

I was just thinking, I buy all my stuff used!
Mainly off Reverb but Craigslist sometimes. I think the last brand new thing I bought was a Fender Mustang IV that quit working and it came with a 5yr Warranty and they replaced the whole thing for free...but having little confidence in it I sold it. So 98% is used.

disclaimer coolcat inc is not associated to any IPO or Moodys rating entity. coolcat inc is currently $2312 in debt on guitar and recording crap and has recently signed a deal with Tiger Lawns to mow his yard twice a month.
 
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disclaimer coolcat inc is not associated to any IPO or Moodys rating entity. coolcat inc is currently $2312 in debt on guitar and recording crap and has recently signed a deal with Tiger Lawns to mow his yard twice a month.

:laughings:
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IF GC would sell me an $1800 American Strat for $800 I'd buy it in a heartbeat - and so would quite a few others, I suspect. Good way to liquidate. The manufacturers wouldn't want to dilute their reputations with such offerings, but what are they gonna do? Maintain high prices to support reputations that are becoming irrelevant due to a loss of customer base? In one or two more generations their annual sales might be around 300,000-500,000 guitars. They're getting to be like our auto manufacturers. Soon, only 500,000 people will want a new guitar. The manufacturers will still be cranking out 2,000,000 units. Got an idea.. put one unsellable guitar in the trunk of every unsellable new automobile. New guitar amps to follow.
 
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No clue how GC is still in business. I think the closure will be like Mars, very sudden. Likely they'll just stop being able to pay their employees and chain the doors the next day.

I'll miss it but hardly ever buy anything there. Sweetwater ftw.
 
Well, they're still in business because they owe so many "people" so much money that they've been able to keep selling notes, i.e., "restructuring" their debt. It's a house of cards, and they're just one. But, some bank has or has sold customers millions of dollars of junk bonds from GC (and many others), and they're happy to take the interest payments, and they continue to claim they have assets worth the value of the bonds, though there's no way GC could ever pay the principle back (with current retail trends), so they trade "old lamps for new" and hope a genie pops out. It could go on a long time, or if things get tight and some companies (like Toys'R'Us) make junk buyers nervous and want to get off the merry-go-round, GC will not be able to get enough holders of old notes to agree to trade them in. Then it's all over.

Go watch Wall Street if you haven't. F'n LBOs have largely been a disaster, but timing is everything, and Bain Capital's use of GC to make themselves rich is one of the case studies on how those titans just don't care what happens, so long as they get mega richer. In short, this is not really GC's fault, but BC's saddling of the company with an unmanageable debt load just when that was the last thing they needed to execute a plan to keep the company profitable. It's almost certainly a death spiral, but when it will end, well, if you know, you're probably not spending time on this forum...
 
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