WESTLAKE VILLAGE (CBSLA) — Guitar Center, the nation's largest retailer of musical instruments and equipment, has filed for bankruptcy because its stores were hit hard by the COVID-19 pandemic.
Guitar Center has about 300 stores across the U.S. and also owns Music & Arts, which operates more than 200 stores specializing in band and orchestral instruments for sale and rental. Like most non-essential business, Guitar Center stores closed in March at the start of the pandemic and has been severely impacted by the closure of schools, live music events and the economic downturn.
The Westlake Village-based company announced they filed for bankruptcy in the United States Bankruptcy Court of the Eastern District of Virginia Saturday.
"This is an important and positive step in our process to significantly reduce our debt and enhance our ability to reinvest in our business and support long-term growth," Guitar Center CEO Ron Japinga said in a statement.
Guitar Center's financial restricting plan includes reducing $800 million in debt and a possible optimization of its real estate portfolio. The company claimed in its court filing it has liabilities of between $1 billion and $10 billion, with a similar range for its assets.
Ares acquired the company in 2014 in an out-of-court restructuring of Guitar Center's substantial debt load, the result of a deal by Bain Capital LP in 2007 to take it private.
(© Copyright 2020 CBS Broadcasting Inc. All Rights Reserved. City News Service contributed to this report.)
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