Guitar Center Inc, the largest US retailer of music instruments and equipment, announced Saturday that it has filed for Chapter 11 bankruptcy.
The Company has secured new financing to implement its bankruptcy plan, which they say “will deleverage the Company’s balance sheet, enhance financial flexibility and provide additional liquidity to continue to support its vendors, suppliers, and employees.”
The plan is intended to allow Guitar Center and its related brands (including Music & Arts, Musician’s Friend, Woodwind Brasswind and AVDG) to continue to operate as normal while the transaction is implemented. Guitar Center says it will continue to meet its financial obligations to vendors, suppliers, and employees, and make payments in full to these parties, without interruption in the ordinary course of business.
Guitar Center plans to continue to provide uninterrupted service to its customers through its existing channels, including its stores, websites, call centers and social media pages, and will continue to receive goods and ship customer orders as usual. Merchandise credits, prepaid lessons, rentals, gift cards, deposits, orders, financings and warranties will be honored.
The company notes that it is working to ‘optimize its real estate portfolio’ to reduce its debt and focus on its most profitable investments and locations.