Gibson, maker of iconic guitars for the likes of John Lennon, Elvis Presley and BB King, filed for bankruptcy protection yesterday after facing mounting debt and other financial challenges.
The company, based in the American country music capital Nashville, Tennessee, since 1894, filed for Chapter 11 protection — meaning it aims to reorganise its business and restructure its finances.
The company said in a statement it had reached a deal with a majority of its creditors that would give them an ownership stake.
The historic maker of Gibson- and Epiphone-branded guitars will wind down a consumer audio business which makes headphones, speakers and other products under Philips and other brand names, and focus on its core musical instrument and professional audio equipment operations.
The company had been featured last year at the White House's “Made in America” week as part of President Donald Trump's promotion of US-manufactured goods over allegedly unfair imports. Other American brands manufacture some of their guitars outside the United States.
Gibson CEO Henry Juszkiewicz said in a statement the company had been working to improve its finances “over the past 12 months”.
“We have sold non-core brands, increased earnings, and reduced working capital demands,” he said.