Speculation about the financial problems facing Gibson have been swirling for months, but it wasn’t until I read this article detailing the incredible amount of debt the company is facing that I started to wonder if the iconic guitar company might really be forced to shut its doors. Could we soon be facing a world without a company that’s been one of the two undisputed leaders of guitar manufacturing, or is Gibson too big to fail?
The Bloomberg article does an excellent job of explaining the volume of the debt ($560 million!), but also goes on to detail some of the reasons why Gibson finds itself in the sticky situation it’s in today. CEO Henry Juszkiewicz’s strategy to transform Gibson into a lifestyle brand by adding electronics companies to the portfolio never really worked out. At the same time, it sounds like the core guitar making business is being terribly mismanaged and doing everything they can to alienate the people who are in the best position to help them — the guitar dealers. It was shocking to read that stores like Gruhn Guitars in Nashville are being forced to make the difficult decision to stop selling Gibson’s guitars because they can no longer endure onerous conditions like annual credit checks and being asked to place advance orders for a whole year’s worth of inventory.
So what does it mean for Gibson and the industry in general? Will Gibson simply cease to exist or will some investment capital group swoop in and save the company from ruin? If that happens, will the company and their products still remain the same or will it usher in a new Instrument Epoch creating a boundary line for collectors like the “Pre-CBS” Fenders?
As much as we love Gibsons, are Les Pauls and 335s relevant enough for today’s guitar players? Maybe what they need is a guitar playing influencer to strap on one of their guitars and breathe new life into the product line. It wouldn’t be the first time that happened for a guitar company. Gretsch 6120s would have almost certainly faded into obscurity if it hadn’t been for Brian Setzer working his magic for a whole new generation of guitar buyers.
If Gibson does go away, what will it mean for the industry as a whole? Is Fender facing similar challenges? I’ve heard interesting discussions in recent days picking apart where these companies are going wrong. Too many different guitars in the product catalog and confusing choices for consumers about what warrants a $1,000 difference in price tags between a high end Mexican Strat and similarly built American model.
Quality control is a complaint I’ve heard fairly often leveled against both Fender and Gibson. How many times have you gone to a guitar store and played five different guitars from the same manufacture, only to find that only one of them spoke to you and it was the least expensive of the lot. John Mayer made an interesting argument recently when he went online to defend his decision to jump ship with Fender and turn to PRS Guitars to craft his newest signature model, The Silver Sky. He pointed out that, with Fenders, you might have to play 100 different guitars to find the ONE guitar that has just the right combination of playability, tone and mojo. The question of mojo is probably still arguable, but Mayer believes that with PRS every one of those 100 guitars will have consistent playability and tone that you should expect when you’re paying thousands of dollars for an instrument you want to bond with.
Regardless of what happens, it’s bound to be an interesting time. Hopefully one of growth for the entire industry.