Gibson Guitar May Default

CasperCaster

@RaymondLin I quite like the idea of PRS owning Gibson. I'd buy a Les Paul or SG made in Maryland, and no longer a need for PRS to pretend with the Singlecut and Mira. PRS could do with some proper thinlines too,so they could keep the Memphis factory.

RaymondLin

CasperCaster said:

@RaymondLin I quite like the idea of PRS owning Gibson. I'd buy a Les Paul or SG made in Maryland, and no longer a need for PRS to pretend with the Singlecut and Mira. PRS could do with some proper thinlines too,so they could keep the Memphis factory.

If PRS own Gibson then in theory they could make a "perfect" Gibson.  Mojo be damned!

Cabicular

How much debt would a prospective buyer want to take on
you could buy it for a dollar but it looks like it might owe more than half a billion ...

Jez6345789

I think the whole industry is heading south at the moment some of these comments are the results of corporate shenanigans in the money markets but increasingly volume is down making it harder to service the debt.

i travel to Nazareth usually once a year on business non guitar related . Local  Bar talk last Saturday in that town was lay offs of key people reduced shifts  over stock of inventory and moving more production to offshore. Yeah casual bar talk in a working mans bar is not a true barometer but I thought it was telling.

stickyfiddle

It is worth hearing in mind that the entity with the debt is Gibson Brands, which also owns Epiphone, Dobro, Steinberger, Kramer, Slingerland drums, Baldwin pianos, TASCAM, Onkyo hifi, Philips audio, and apparently Harmony Central (does that even still exist?)

Its a huge company. I would assume that Hemry J would let some of that go before seeing the whole thing fall over.

fandango

Who else picked up the bit where Moody's say Fender has poor product diversity?

I would have thought that Fender have a pretty diverse portfolio for a guitar manufacturer. Although not as diverse as Yamaha with their complete band range of instruments, plus motorbikes, outboard engines, etc etc.

How diverse does a business have to be? Rules out Ford, for they only make cars. Rules out Microsoft because they don't make coffee. Rules out gyms and hair salons because you cant buy your groceries there.

What should Fender do to become diverse? Your guess is as good as mine. I dread to think of what Moody's would make of Auden/Gordon Smith Guitars. Or even @Rabs ;;Guitars. Come on Rabs, when you gonna introduce a line of bass guitars, amps, and branded guitar accessories? You're not diverse enough. 

Neil

lustycourtier said:

Henry took over Gibson 31 years ago, and saved it from disaster. Think of everything that's changed since then...we have so much to thank Him for. 

I think that is worth saying.

People deride Henry but Gibson is a privately owned concern and you'd be surprised how many big companies lurch on from year to year even though saddled with huge debts, look at Man Utd. 

Fender are less in control, mainly owned by two private equity firms who could, if they felt like it indulge in a bit of asset stripping. 

Chalky

fandango said:

Who else picked up the bit where Moody's say Fender has poor product diversity?

I would have thought that Fender have a pretty diverse portfolio for a guitar manufacturer. Although not as diverse as Yamaha with their complete band range of instruments, plus motorbikes, outboard engines, etc etc.

How diverse does a business have to be? Rules out Ford, for they only make cars. Rules out Microsoft because they don't make coffee. Rules out gyms and hair salons because you cant buy your groceries there.

What should Fender do to become diverse? Your guess is as good as mine. I dread to think of what Moody's would make of Auden/Gordon Smith Guitars. Or even @Rabs ;;Guitars. Come on Rabs, when you gonna introduce a line of bass guitars, amps, and branded guitar accessories? You're not diverse enough. 

Diversity of risk portfolio. Fender's risks are all in the music instrument area, which used to be considered a Fashion sector, and Fashion is high risk as its an arbitrary purchase by a fickle customer base.  Cars and software have a different risk shape.

ICBM

fandango said:

Who else picked up the bit where Moody's say Fender has poor product diversity?

I would have thought that Fender have a pretty diverse portfolio for a guitar manufacturer. Although not as diverse as Yamaha with their complete band range of instruments, plus motorbikes, outboard engines, etc etc.

I noticed that too - my initial reaction was "What? They have something like 200 different models of Stratocaster alone!", but you're right… I'm pretty sure they have a more diverse product range than any musical instrument manufacturer other than Yamaha, even discounting their non-musical divisions. Peavey would probably be the only other big contender, but I don't think they're that close.

Chalky

Rox said:

By $1.2bn in 'revenue', I assume they mean turnover? 

Revenue means actual income to the company, i.e. what Gibson got paid for its sales (plus any investment income or interest).  So it doesn't include the guitar shop's or distributor's mark-up, or sales taxes.

darthed1981

Chalky said:

fandango said:

Who else picked up the bit where Moody's say Fender has poor product diversity?

I would have thought that Fender have a pretty diverse portfolio for a guitar manufacturer. Although not as diverse as Yamaha with their complete band range of instruments, plus motorbikes, outboard engines, etc etc.

How diverse does a business have to be? Rules out Ford, for they only make cars. Rules out Microsoft because they don't make coffee. Rules out gyms and hair salons because you cant buy your groceries there.

What should Fender do to become diverse? Your guess is as good as mine. I dread to think of what Moody's would make of Auden/Gordon Smith Guitars. Or even @Rabs ;;Guitars. Come on Rabs, when you gonna introduce a line of bass guitars, amps, and branded guitar accessories? You're not diverse enough. 

Diversity of risk portfolio. Fender's risks are all in the music instrument area, which used to be considered a Fashion sector, and Fashion is high risk as its an arbitrary purchase by a fickle customer base.  Cars and software have a different risk shape.

Wiz'd

WezV

"We expect Ebitda to remain essentially flat this year as we think margin enhancements will not be enough to offset revenue declines," 

revenue= income

Ebitda= profit.

i.e.  Gibson is trying to get more profit from each guitar, but it's not enough to stop the decline in income

Evilmags

Ebitda excludes interest, tax, amortisation and depreciation. The real profit after tax is a lot smaller (if it exists). Fender are way better run. They are much more consistent and 2.5X EBITDA is manageable. 8X is not and Gibson is effectively bust and living on bank time.

ICBM

Chalky said:

Diversity of risk portfolio. Fender's risks are all in the music instrument area, which used to be considered a Fashion sector, and Fashion is high risk as its an arbitrary purchase by a fickle customer base.  Cars and software have a different risk shape.

But isn't diversifying into non-musical-instrument areas - where the company have little knowledge or experience - exactly what got Norlin into trouble? OK that's a long time ago now, but isn't this sort of "diversity" for the sake of it rather than concentrating on the thing where you're a world leader simply business-management-school dogma?

fandango

Chalky said:

fandango said:

Who else picked up the bit where Moody's say Fender has poor product diversity?

I would have thought that Fender have a pretty diverse portfolio for a guitar manufacturer. Although not as diverse as Yamaha with their complete band range of instruments, plus motorbikes, outboard engines, etc etc.

How diverse does a business have to be? Rules out Ford, for they only make cars. Rules out Microsoft because they don't make coffee. Rules out gyms and hair salons because you cant buy your groceries there.

What should Fender do to become diverse? Your guess is as good as mine. I dread to think of what Moody's would make of Auden/Gordon Smith Guitars. Or even @Rabs ;;Guitars. Come on Rabs, when you gonna introduce a line of bass guitars, amps, and branded guitar accessories? You're not diverse enough. 

Diversity of risk portfolio. Fender's risks are all in the music instrument area, which used to be considered a Fashion sector, and Fashion is high risk as its an arbitrary purchase by a fickle customer base.  Cars and software have a different risk shape.

The article in the OP specifically said PRODUCT diversity, not risk or financial diversity, hence my comment.

Jack_

For sale is my 2015 Les Paul Standard, pre-21st century bankruptcy model.

Everyone knows that once production left the USA it got better worse, definitely worse.

Sought after hologram and Les Paul 100 logo, one of Gibson's finest ideas before they went to the dogs because of completely unrelated bad design choices.

Yours for just £2500, grab yourself a bargain folks!

gubble

Jack_ said:

For sale is my 2015 Les Paul Standard, pre-21st century bankruptcy model.

Everyone knows that once production left the USA it got better worse, definitely worse.

Sought after hologram and Les Paul 100 logo, one of Gibson's finest ideas before they went to the dogs because of completely unrelated bad design choices.

Yours for just £2500, grab yourself a bargain folks!

I've made a comment on @HarrySeven 's post - this may have been written in jest but I predict this to be a very real future !

Jack_

gubble said:

Jack_ said:

For sale is my 2015 Les Paul Standard, pre-21st century bankruptcy model.

Everyone knows that once production left the USA it got better worse, definitely worse.

Sought after hologram and Les Paul 100 logo, one of Gibson's finest ideas before they went to the dogs because of completely unrelated bad design choices.

Yours for just £2500, grab yourself a bargain folks!

I've made a comment on @HarrySeven 's post - this may have been written in jest but I predict this to be a very real future !

We should have a Fretboard pool on how long it will be before the term "pre-bankruptcy" or similar gets used in a sale listing.

gubble

Jack_ said:

 

We should have a Fretboard pool on how long it will be before the term "pre-bankruptcy" or similar gets used in a sale listing.

It's the new pre CBS

usedtobe

Be reyt! All money is pretend, anyway, magic'd up on the Rothschild family's magic money computer..