A Sad Tune for Guitar Center
Posted on 11/13/2020
The encore is over and the tab is well overdue. Another private equity-owned retailer is about to file for bankruptcy. Guitar Center is a 61 year-old musical instrument retailer owned by Ares Management. Guitar Center has plans to file for Chapter 11 bankruptcy protection. Guitar Center currently has around US$ 1.3 billion in debt and missed an interest payment in October.
In June 2007, Bain Capital took Guitar Center private for US$ 2.1 billion, saddling the retailer with a reported US$ 1.6 billion in debt. Primary creditor Ares Management assumed control of Guitar Center on April 3, 2014 through a debt-for-equity swap. Bain Capital a partial equity interest after the 2014 Ares swap deal.
The list of retailers backed by private equity going bust in the U.S. is endless including Neiman Marcus, Payless ShoeSource, Toys R Us, Vitamin World, Gymboree, RadioShack, and The Limited.
Guitar Center was founded in 1959 by Wayne Mitchell, when he about the Organ Center in Hollywood.