The Plot Thickens: Guitar Center Holdings is changing hands Attention Guitar Players, what does the below information mean regarding the Guitar Center? Well, we all might be standing in line like Black Friday when they liquidate............... A Film by Blues Mike For those interested in this sort of thing.... In a report from last weeks Wall Street Journal, Guitar Centers largest creditor, ARES Management, is on the final stages of converting their debt into equity. This move would give ARES control of GC, taking current owners BAIN Capital out of the drivers seat. GC currently carries about $1.6 billion dollars in debt, with scheduled annual payments ranging from $144 million to $150 million per year. They reported a $398.7 million loss as of Sept 30th 2013 and cash on hand totaling $26 million. GC has continued to experience lagging sales and loss of market share, especially in its direct response businesses (online sales). ARES has not announced its intentions for GC, but if they are successful in their acquisition, the speculation is that theyll liquidate in an effort to recoup their investment, rather than try and walk the long road back to profitability. In short, theyre in a deep hole, dead broke, and theres going to be a new sheriff in town. Should get interesting.
Posted on: Fri, 07 Mar 2014 13:26:06 +0000
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