Guitar Center, musical instrument retailer, files for bankruptcy
Guitar Center has approximately 300 locations across the United States and said it plans to continue providing service to its customers in its stores and on its website.
WASHINGTON — Guitar Center filed for Chapter 11 bankruptcy on Saturday, as the coronavirus pandemic upends another business.
The country’s largest musical instrument retailer tried to survive during the pandemic, but was forced to close many of its stores in March during the nationwide shutdown. He struggled to get customers to buy instruments as unemployment fell and the economy struggled.
The company said in its filing that it would receive up to $165 million in new equity investments to recapitalize the company and reduce its debt by nearly $800 million.
“This is an important and positive step in our process to significantly reduce our debt and improve our ability to reinvest in our business to support long-term growth,” said Guitar Center CEO Ron Japinga. , in a press release. Press release.
Guitar Center has approximately 300 locations across the United States and said it plans to continue providing service to its customers in its stores and on its website. The company added that it would still have its call centers and social media pages during the bankruptcy process.
“Throughout this process, we will continue to serve our customers and fulfill our mission to bring more music to the world,” Japinga said. “Given the strong level of support from our lenders and creditors, we expect to complete the process before the end of this year.
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Guitar Center said all merchandise credits, prepaid lessons, rentals, gift cards, deposits, orders, financing, and warranties will still be honored.
Guitar Center filed for bankruptcy in the United States Bankruptcy Court for the Eastern District of Virginia.
Other big companies that have filed for bankruptcy amid the pandemic include several clothing retailers like Brooks Brothers, Neiman Marcus and JC Penney. Restaurant chains have also filed for bankruptcy, including the U.S. arm of Le Pain Quotidien, CEC Entertainment, the parent company of Chuck E. Cheese, California Pizza Kitchen, Sizzler and Ruby Tuesday.
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