Guitar Center has officially filed for chapter 11 bankruptcy according to the New York Times. The United states largest retailer of musical instruments filed for bankruptcy protection late Saturday night, highlighting the gap between the strongest and weakest companies in the pandemic. The company was already struggling to compete with online retailers like Sweetwater before the pandemic, and was hit hard when it was forced to temporarily close most of this year. It now entered Chapter 11 restructuring proceedings in the U.S. Bankruptcy Court of the Eastern District of Virginia and will continue to pays its vendors and employees in full said in a news release on BusinessWire.
The possibility that Guitar Centre would go bankrupt was reported by the Times and Bloomberg last month. The financial strain on the company due to the temporarily shutter of its physical locations earlier this year already saw, at one point, the closure of 75 percent of their stores in the United States.
According to a statement posted on Businesswire, Guitar Center will:
“continue to meet its financial obligations to vendors, suppliers, and employees, and intends to make payments in full to these parties without interruption in the ordinary course of business.”
“This is an important and positive step in our process to significantly reduce our debt and enhance our ability to reinvest in our business to support long-term growth,” Guitar Center CEO Ron Japinga said in the statement. “Throughout this process, we will continue to serve our customers and deliver on our mission of putting more music in the world. Given the strong level of support from our lenders and creditors, we expect to complete the process before the end of this year.”
Find the full statement here.