This Legendary Store Just Announced It's Filing for Bankruptcy
It's a sad day for musicians everywhere.
The music industry has been upended by the COVID pandemic, with gigs at all levels largely shut down. From stadium concerts to intimate jam sessions and busking to music lessons, social distancing has put a stop to most of the events that are the business' lifeblood. Even singing has been given a bad rap because of its propensity to spread droplets, potentially contaminated by the virus. And now, the industry's standstill is putting one of the most iconic music stores in jeopardy: Guitar Center, the largest retailer of musical instruments and equipment in the country, is filing for bankruptcy. Read on to learn more and for another closure that stings, check out This Popular Clothing Chain Is Closing 140 Stores.
Guitar Center originally opened in 1959 as a single store selling organs in Hollywood. But the flagship Guitar Center store on Sunset Boulevard in Hollywood, which most people associate with the brand, has been a constant fixture in the music world for more than three decades. The 30,000-square-foot store contains priceless memorabilia from music history, including Eric Clapton's Blackie model Fender Stratocaster, a 15-foot long pedal display, along with rooms of rare and vintage equipment.
In 2018, the company's nearly 300 stores nationwide were overhauled, in a concerted attempt to be more welcoming to novice players, women, and senior musicians. While its market share was healthy at that point, it was carrying a $1.3 billion debt burden as more sales moved online.
In a statement posted on their site, Guitar Center announced that they were entering a restructuring deal to cut debt by $800 million. According to Reuters, this new deal—a Restructuring Support Agreement (RSA)—was signed by Guitar Center "with its equity sponsor, a fund managed by private equity firm Ares Management LP, new investors Brigade Capital Management and a fund managed by Carlyle Group, as well as supermajorities of its noteholder groups." The company stressed that this deal will allow business operations to continue without any interruption at the present time.
Read on for more businesses that haven't fared as well, and for another recent store closure, check out This Iconic Sporting Goods Company Is Closing Stores Nationwide.
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Gyms are having a rough go of things amid the coronavirus pandemic and Youfit, which once had 85 U.S. locations, is the latest chain to feel the economic strains. The company recently filed for Chapter 11 bankruptcy protection. According to the South Florida Business Journal, Youfit spokesperson Evan Nierman said in a statement, "As it did for many industries, including other health clubs, the pandemic hit Youfit hard, and we have made the decision to restructure the company through a bankruptcy filing."
The chain, which had closed numerous locations before COVID hit, also came under fire in April when customers realized they were still being charged their monthly premium despite the gyms being closed, according to the Miami New Times. And for more gym closure news, This Beloved Gym Chain Is Closing 100 Locations.
The trendy clothing store Francesca's was once a mall staple with stores in nearly all 50 states. But on Nov. 16, the company announced that it would be closing approximately 20 percent of its brick-and-mortar locations, which comes down to 140 stores, by Jan. 31, 2021. Like Guitar Center, MarketWatch reports that Francesca's may still file for Chapter 11 bankruptcy protection to help slash its multimillion-dollar debt. And for another iconic mall store shutting down locations, This Mall Favorite Just Filed for Bankruptcy.
Justice, another beloved store for a slightly younger set, also announced in November that it would be closing all of its locations by early 2021. But this may not be the end of Justice full stop. Justice's parent company, Ascena Retail Group Inc., sold the brand to Bluestar Alliance LLC for around $90 million. And Bluestar is hopeful that they'll be able to rebuild and grow Justice. "Justice is an important asset with years of growth ahead. An icon of tween culture, with its influence felt across fashion, lifestyle, pop culture and more, we see opportunity for global brand extensions and partnerships," said Bluestar CEO Joseph Gabbay. And for another adored business that's suffering, check out This Beloved Restaurant Chain Just Filed for Bankruptcy.
Carter's and OshKosh B'Gosh
Even the largest branded marketer of baby and children's clothing in the U.S. can't survive the pandemic unscathed. In October, Carters, the parent company that includes Carter's stores and OshKosh B'Gosh brands, announced that around 35 percent—or 200—of the company's stores would be shuttering for good. "Nearly 60 percent of those closures may occur by the end of the year," Carters CEO and chairman Michael Casey said on an earnings call. "And 80 percent of those closures are planned by the end of 2022." And for another recent closure, know that This Beloved Coffee Chain Just Announced It's Filed Bankruptcy.