As Gibson Brands files for bankruptcy, are guitars out of tune with America?

Published: May 2, 2018 12:02 a.m. ET Industry watchers say don’t give up on guitar sales just yet Guitar company Gibson Brands Inc. filed for bankruptcy protection Tuesday. It will continue to operate during those proceedings. As consumers have more options for hobbies and imported instruments compete with American-made ones, the musical instrument business in the U.S. is becoming more fractured. The company, which is based in Nashville, has struggled with debt it took on to finance acquisitions of home-entertainment and audio-equipment makers, as well as TEAC and Onkyo stereos. In fact, sales of guitars have been strong, and Gibson’s struggles seem to be unique, said Tim Hynes, the head of North American research at Debtwire, a data and analysis company. “They just moved into something they didn’t have any experience in,” he said. Once an industry leader, Gibson experienced problems after it signed an agreement with Royal Philips to acquire its audio, video, multimedia and accessories business. It’s a case of bad timing for Gibson, analysts say, as well as a strategically questionable move. That business was in direct competition with Amazon ...

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