Guitar Center has hit a sour note.
The music retailer, the largest in the country, is more than $1 billion in debt and the outlook for its namesake instrument isn’t great.
The problem, say guitar retailers, is the nation’s shift in musical tastes. As rap and hip-hop have become more main stream, guitars have become less crucial to the country’s most popular songs. And that has impacted sales.
Complicating things is the lack of true guitar superstars like Eric Clapton or Jimi Hendrix.
“I would be hard-pressed to name any new ones,” George Gruhn, owner of the Gruhn Guitars shop in Nashville, told the Daily News. “You’ve got Joe Bonamassa who is a great player. But he isn’t selling as many guitars as the other big time heroes. And Eric Clapton is arthritic. He’s having difficulty playing and is retiring from touring.”
Guitar Center has certainly put up a strong fight. Four years ago, it bet heavily on brick and mortar stores, presuming that customers would be more apt to buy after getting some hands-on time with an instrument.
That bet didn’t pay off. S&P Global recently downgraded the company for the second time.
Guitar Center has issued $635 million in secured notes that will be due in 2021. Those will be used to refinance the company’s existing secured notes, which were set to mature next month. The company says the extended timeline will increase liquidity and boost its financial stability.