Last month it was reported that Guitar Center was planning on filing bankruptcy, as the company has been hit hard in 2020 by the pandemic. A new report by USA Today confirms that the company is moving ahead with those plans.
The USA Today reports:
“Guitar Center said Friday it had reached a restructuring deal with its controlling owner, a fund managed by private equity firm Ares Management, which acquired its stake in Guitar Center in 2014. The company said it also got support for its deal from new investors Brigade Capital Management and a fund managed by The Carlyle Group and from various lenders.”
The music store giant did say they planned on remaining in business, but would not elaborate when asked if they were going to be closing any of their 300 stores. They did tell USA Today that they are working with a real estate firm to “explore opportunities to optimize its real estate portfolio and other agreements to focus on investments that best position the Company to return to its growth trajectory prior to COVID-19.”
Guitar Center CEO Ron Japinga released a statement regarding the bankruptcy saying, “This agreement will allow us to significantly reduce our debt and reinvest in our business in order to better serve our customers and deliver on our mission of putting more music in the world.”