Emailed on November 13th, 2020 in The Friday Forward

Guitar Center, a 61 year-old musical instrument retailer owned by Ares Management, plans to file for prepackaged Chapter 11 bankruptcy protection, per the New York Times.

This is one of the last chapters of private equity’s so-called Golden Age, during which well-known retailers were taken private with huge new debt obligations but without meaningful e-commerce strategies.

Bain Capital bought Guitar Center for $2.1 billion in 2007, while Ares acquired control in 2014 via a debt-for-equity swap. It currently has around $1.3 billion in debt and missed an interest payment last month.

“Although many people have turned to hobbies like playing music while homebound, the biggest winners have been those with the strongest e-commerce infrastructure. In musical instruments, the online retailer Sweetwater was already threatening Guitar Center’s brick-and-mortar business.” — Lauren Hirsch, NY Times