Guitar Center Miss $45 Million Payment, May Declare Bankruptcy Next Month
According to the New York Times, Guitar Center could file for bankruptcy by November, having missed an interest payment of roughly $45 million earlier this month.
The COVID-19 pandemic has dealt a crushing blow to businesses nationwide, with one survey suggesting that one in every six restaurants in the United States has closed. As the country’s largest retailer of musical instruments, Guitar Center has been hit especially hard as much of its business relies on store-based sales.
After missing their $45 million payment, a 30-day has been activated which could ultimately end in default. Though Guitar Center reportedly generated $2.3 billion in sales during its most recent fiscal year, the music chain has roughly $1.3 billion in debt and had its credit rating downgraded by Moody’s back in May.
Despite its struggle to shift to online sales following a buyout in 2007, Guitar Center experienced a fairly successful two-and-a-half years, growing its sales for 10 consecutive quarters before the end of February.
Spokespeople for Guitar Center and Ares Management declined to comment on the New York Times report.
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