Guitar Center secures three-year debt extension to “provide the time necessary to deliver on its business plan”
As an increasing number of brick and mortar guitar stores are being forced to close down, Guitar Center has announced its latest plan to keep its physical stores up and running.
According to Business Wire, Guitar Center has reached an agreement with investors to extend the payback period on its debts. The three-year debt extension is intended to allow the company more time to “deliver on its business plan”.
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The plan is to carry out a Senior Secured Notes Exchange, essentially meaning that it will be reaching new terms and repayment conditions with its investors. While 8.5% of the company’s Senior Secured Notes were originally due for repayment in 2026, 70% of its investors have agreed to renew their terms, moving the repayment deadline to 2029.
The company hopes to have all of the new terms and conditions for its Senior Secured Notes investors finalised by August.
It’s a challenging time for physical music stores. Just last year, Sam Ash shut up shop, and Guitar Center’s CEO Gabe Dalporto also went on record saying that the company needs to “evolve” to survive.
“If you want to experience musical instruments and start off or accelerate your journey as a musician, the world needs Guitar Center,” he told Music Inc last May. “Our customers need us and our vendors need us,” he says. “But in order to earn the right to be here, we need to evolve and execute better.”
“I want customers to walk into [a store] and have the same experience I had when I was younger and just be hit in the face with, ‘Wow, this is amazing. This is a playground. This is where I belong,’” he added. “And that means having a much more premium assortment that’s more easily accessible where I can get in and grab a guitar and plug it in and try all these pedals and effects and just geek out and have a great time.”
Earlier this year, Dalporto also discussed how the human touch is the key to company maintaining its status as the biggest music store chain in the US. “It really is the premium product where people are going to take that time and care a lot and want to experience it [in person],” he explained on the Know Your Gear podcast. “That’s why it’s important to us. We are leaning into that really high-quality, premium product where experience matters. That’s where we can win against Amazon.”
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Source: www.guitar-bass.net
