Guitar Center Goes Bankrupt, Idled by Virus and Slower Sales
- Bankruptcy plan calls for $165 million in new equity financing
- Music retailer expects to exit court process by end of year
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Guitar Center Inc., the largest U.S. retailer of music instruments and equipment, filed for bankruptcy after the coronavirus pandemic kept customers at home and job losses made them less able to afford new gear.
The filing in the Eastern District of Virginia gives the company a break on its debts by letting it stay in business as it seeks to carry out a restructuring plan. A turnaround will be complicated by the fact that the company’s stores were shut in mid-March to help stop the spread of the Covid-19 outbreak. It has reopened locations while maintaining e-commerce operations.