No Gibson at NAMM

darthed1981

impmann said:

I'm not sure I agree with you about NAMM being a "jolly". Its fucking hard work, incredibly noisy and you feel genuinely beaten up when you crawl back to your hotel after 9-10hours on your feet.

FWIW, not going to NAMM *is* a big deal for any of the big guns. Its a sign of weakness, its a sign that things aren't good. As a result, this will reflect within the market - I'm not talking about us, the consumers, I'm talking about the bigger picture. NAMM isn't just about showcasing or raising awareness, its about showing the music industry your corporate face too. A lot of dealer/distributor activity goes on at these events (NAMM and Frankfurt) and the sales generated are highly significant parts of the overall yearly sales totals for most manufacturers. To not be there will cost them sales - no question - at a time that they can ill afford it.

In my opinion this is either an ill-judged cost saving excercise driven by someone who doesn't know the industry or a sign that things are *REALLY* bad.

I was being a bit tongue in cheek, no doubt it is a huge sales opportunity for many of the businesses that go and hard work for many of their staff!  I'll go back to teasing the salesman where I work

I suspect it is both a cost saving exercise and a sign things are really bad.  I just read up on their factory plans and they seem a little, well, desperate.

EricTheWeary

Eventually remembered one of the companies that pulled out last year - Mesaboogie. 

clarkefan

darthed1981 said:

With 500 million in debts and revenue of 1.7 billion the company mostly needs to really hammer down it's costs to service and run down the debts.  

What, their annual turnover is 1.7 billion?  I could possibly see some light at the end of the tunnel then...

guitars4you

clarkefan said:

darthed1981 said:

With 500 million in debts and revenue of 1.7 billion the company mostly needs to really hammer down it's costs to service and run down the debts.  

What, their annual turnover is 1.7 billion?  I could possibly see some light at the end of the tunnel then...

the level of turnover on its own is only part of an equation - granted it is encouraging and I dare say will make many other guitar companies jealous - Granted any new owner would not need to go chasing a market that doesn't exist or trying to establish itself in the market place - For that Gibson  are in a very favorable position regarding the history of the brand

Debt on its own is not an issue - It only becomes an issue when you can't service the level of debt and meet the appropriate repayment schedules - Man Utd is run with a big debt since the Glazer family acquired it and like many venture capitalists they have loaded it with debt at the point of purchase - But the day to day running of the business allows it to fully operate in this manner

impmann

guitars4you said:

clarkefan said:

darthed1981 said:

With 500 million in debts and revenue of 1.7 billion the company mostly needs to really hammer down it's costs to service and run down the debts.  

What, their annual turnover is 1.7 billion?  I could possibly see some light at the end of the tunnel then...

the level of turnover on its own is only part of an equation - granted it is encouraging and I dare say will make many other guitar companies jealous - Granted any new owner would not need to go chasing a market that doesn't exist or trying to establish itself in the market place - For that Gibson  are in a very favorable position regarding the history of the brand

Debt on its own is not an issue - It only becomes an issue when you can't service the level of debt and meet the appropriate repayment schedules - Man Utd is run with a big debt since the Glazer family acquired it and like many venture capitalists they have loaded it with debt at the point of purchase - But the day to day running of the business allows it to fully operate in this manner

Exactly.

They may have 1.7 billion turnover, but if the profit from that turnover isn't enough to pay the debt, pay the staff and keep Henry in Oreo Cookies* then there be a problem.



*he may enjoy other cookies, others are available, I was using a for instance. Always read the label

guitars4you

impmann said:

guitars4you said:

clarkefan said:

darthed1981 said:

With 500 million in debts and revenue of 1.7 billion the company mostly needs to really hammer down it's costs to service and run down the debts.  

What, their annual turnover is 1.7 billion?  I could possibly see some light at the end of the tunnel then...

the level of turnover on its own is only part of an equation - granted it is encouraging and I dare say will make many other guitar companies jealous - Granted any new owner would not need to go chasing a market that doesn't exist or trying to establish itself in the market place - For that Gibson  are in a very favorable position regarding the history of the brand

Debt on its own is not an issue - It only becomes an issue when you can't service the level of debt and meet the appropriate repayment schedules - Man Utd is run with a big debt since the Glazer family acquired it and like many venture capitalists they have loaded it with debt at the point of purchase - But the day to day running of the business allows it to fully operate in this manner

Exactly.

They may have 1.7 billion turnover, but if the profit from that turnover isn't enough to pay the debt, pay the staff and keep Henry in Oreo Cookies* then there be a problem.



*he may enjoy other cookies, others are available, I was using a for instance. Always read the label

so now we have found the problem in the camp - Lawyers and auditors have studied the accounts and business for ages and struggled to find where such profits have gone - OREO's !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Bridgehouse

Revenue is vanity. Profit is sanity.

clarkefan

Agreed the 1.7b turnover isn't what sorts out the debt, but it is very positive.  It's not like "they make no profits cos their business is dead", it's clearly not, I'd no idea.

So, how to save Gibson:

1.  Factor your debts owed to you by GC, etc, for immediate cash, take the hit, it's the cost of Henry's bad investment decisions. 80% of (total guess) 300m is better than 100% of nothing if/when? GC goes down.

2.  Get the debt repayment dates rescheduled. Just because the original deals had lines in the sand doesn't mean they can't be renegotiated.  To include no additional interest payments, the banks lose 500m if Gibson goes down so they'll be happy to play.  They will want some cash and business changes to include,

3.  Hammer costs and sell non-core businesses, generating cash and focusing management on core strengths.

4. Lose Henry. The banks would want this as part of a new deal, his decisions have proven he is not a fit CEO, and they would want their own appointee in there anyway.  This might be a sticking point.

With turnover of 1.7b Gibson clearly has some strengths, this is not all doom and gloom, it needs to improve profitability by cutting costs, not trying to sell robot guitars.  It might end up a smaller, but much stronger, company in ten years if it talks to the banks and takes some big decisions.

Whitecat

1.7b is all fine and good but the tech companies they run have ridiculously high overheads and R&D costs as well as very tight margins. They really need to hive those businesses off.

clarkefan

Agreed, sell them to people who aren't guitar companies and actually know how to succeed in those tech sectors, win win

scrumhalf

Bridgehouse said:

Revenue is vanity. Profit is sanity.

Actually, it's "profit for vanity, cash for sanity".

Surely all Gibson needs to do is get Joe Bonamassa to turn up, after all he's got a signature model of almost everything they make.

ash96

ThorpyFX said:

Wow even my little company is going to NAMM- we must be doing better than GIBSON! 

I'll see you there! 
Let me know what stand number you are an I'll make sure I make it over. Really wanna try out some of your Fuzz's too!

Mortland

No way, even if the business does go under it will be the end of Gibson, so as a consumer I wouldn’t even look to far into it. 

Many competitors, investors and entrepreneurs I’m sure would snatch up the intellectual property that would be sold off when realising the asset.

So worst case scenario we end up with an “under new management” version of Gibson, that may (given recent opinion) be the best thing to get it back to its former glory. It’s hard to shake a reputation for poor quality without a big shake up. 

But in all likelihood the current owners shall restructure in some form to hold on to the IP and continue. 

57Deluxe

watch out for those Chinese and Korean (Premium) models very soon then....

ThorpyFX

ash96 said:

ThorpyFX said:

Wow even my little company is going to NAMM- we must be doing better than GIBSON! 

I'll see you there! 
Let me know what stand number you are an I'll make sure I make it over. Really wanna try out some of your Fuzz's too!

Ah wicked I'm in Hall D, stand 3035. we are showing off two new pedals at the show, not fuzzes but i think you'll like them just as much.

Nitefly

Maybe it's a sign that NAMM, and events of its ilk, are losing their potency?

TonyGTR

How I see it is that the big G amongst others have become their own enemy, for years they have been propping up US retailers like GC who owe them millions but they're afraid to cut the supply chain incase the volatility of the retail giant goes under and in turn they have no chance of getting their cash returned.. we see it here in this country with distributors who are forced (or greedy) to do deals with the multiples / online big boys just to increase their numbers.. does it help in the long term? - I'd suggest not, it devalues the product in general both new and second hand market.. forces most of the sales down a few channels (we saw it when Gibson sold 2015 Les Pauls via Amazon) the consumer gets disenchanted with that particular brand if they've bought at the higher price and lost a ton of money overnight, or at best they're happy with their lower valued goods which they will resign themselves to never selling because of the loss they would incur.  These companies need to (but probably wont) go back to their roots of quality and consumer driven product rather than 'this new colour or gizmo' which frankly the average guitar player never wanted in the first place. - Don't get me wrong, everyone wants a bargain every now and then but it shouldn't be to the detriment of the quality of the product, nor should it force buyers down a road where they have no choice of what they were after in the first place.  good independents are becoming fewer in number because of this number driven industry, I'd like to see it come back to how I remember it in the late 80's / 90's when there was so much excitement about guitar.. i'm sure if Leo were still alive he'd want those 50's / 60's days back where everything was fresh, exciting.. the guitar industry driven by supply & demand and not over supply and discount..  never mind about Gibson not showing at NAMM this year, turkeys have started voting for Christmas already! .... signing off for now (avoiding the tail that wags the dog)

p90fool

Apparently they have a stand at the Consumer Electronics Show in Vegas this year, no idea what that means. 

JMP220478

can I get an ES175 for a tenner soon then ? 

as long as it doesnt have a floyd or robot tuners .. :-) 

Neil

p90fool said:

Apparently they have a stand at the Consumer Electronics Show in Vegas this year, no idea what that means. 

Well electronics have a quicker turnover than guitars.

Electronics are out of date after a few years or discarded when a new model comes out - guitars hang around forever.