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They don't need to be able to raise the whole lot by August. The banks would be willing to refinance it if their income was big enough and it looked like there was a realistic chance of getting it paid back. If they could find enough money to pay off 20% of it, and show decent income levels they might be able to roll the rest of it over.
The problem they have is that their credit rating is so low, that even if they could roll it over the interest rate they will have to pay will be so high that the sums just won't add up.
They bet the house with the acquisitions and a plan of innovation & expansion to get the 375m in the first place. Those plans haven't borne fruit, so now they're in the shit and in a market where they get laughed at every time they try something new.
Fender have actually paid off some of their debt. In 2016 Moodys upgraded their credit rating after they paid off $40 million.
I can't find any more recent stuff to say that it has declined again.
As far as I know, Fender are in a reasonably stable position, unless you know something that isn't generally known.
I'm not sure how exposed Fender are if Guitar Center goes under. I know they have major problems.
It IS standard business practice for growth, has been for the 20 years I've been watching business anyway.
A rapid way to increase the reach of your business is to borrow money (or attract a backer) - to buy other companies - to then get access to those companies' established customers or their customer base.
It can work if you're sensible about it. But boy, you can look a Total Flump(TM) if you get it wrong. I guess it doesn't work for guitar companies.
(For example I always wondered what the hell happened to the original Steinberger after Gibson bought it. I mean they seemed to buy a product and then kill it...?)
Maybe this is the reason for the new high end British made guitars that got everyone so worked up:
http://www.thefretboard.co.uk/discussion/123574/chapman-guitars-at-namm#latest
The result is normally 1 + 1 = (about) 1.4
The pre-acquisition rationale is that we'll sell our products to their customers and their products to our customers, whilst simultaneously removing duplicated overheads to cut costs. Hence the expectation is generally that the combined entity will be about 2.5x the sum of the previous parts. Or whatever multiple is necessary to justify the deal.
The reality is that you find that their customers don't want our products (which is why they were their customers originally!) and that their products aren't really suitable for our customers (for one reason or another), and that there's a fair amount of overlap in the product lines that has to be removed. The focus turns to the cost cutting, which (a) pisses of most of the staff and (b) pisses of many of the customers because the organisation is focused internally on its cost saving exercise. Customer service declines and customers leave.
The costs of rationalisation are generally higher than expected - eg severance payments - and the integration costs more than expected (IT systems!). Plus you find lots of conflict in respective corporate cultures that take a while to resolve.
Meantime the directors and senior managers find that they've hit all of their bonus targets for growth and company size (which were set prior to the acquisition of course), just by achieving the 1.4 number. So, they're happy and disappear over the horizon with cash in pocket to repeat the exercise somewhere else.
Shareholders lose out (they effectively fund the 0.6 shortfall when 1+1=1.4). "Rationalised" staff lose out. Dissatisfied customer lost out. And all the value, credibility and trust that had been built up in both companies prior to that point is destroyed.
Not suggesting that's how Gibson got into its specific predicament (because it's not, really), but that's how I've seen other businesses do it.
Remember, it's easier to criticise than create!
I do think they have some pain coming - I find the massive range of near identical product, and the pointless model years, pretty baffling. Someone needs to take a hatchet to that in the same way Steve Jobs did when he rejoined Apple in '97.
We didn’t know the full story about Carillion, and there was no buying there - straight to liquidation, do not pass go etc..
I think it's virtually certain someone will be selling stuff with the Gibson logo on it. The brand is historic and there will always be people who want a new guitar with that logo. (Regardless of actual quality of course.)