Guitar Center is in Serious Financial Trouble
Guitar Center’s ongoing financial woes aren’t exactly a new thing; there has been plenty written about the company’s restructuring and debt obligations in the press of late. But this article by economic analyst — and musician — Eric Garland really struck a chord with me (no pun intended).
Garland’s article is on the longer side, and though you may have to pause and re-read certain passages to make sure you understand what he’s saying — there’s plenty of economic jargon — I found his writing style surprisingly straight-forward and easy to comprehend.
The TL;DR version: Guitar Center is now owned by corporate investors who stand to either make money on Guitar Center’s debt — kicking the can farther down the road for the next guy — or, if the company goes belly up, claim it as a tax write-off. Sound familiar? This is the exact same strategy that ran the entire U.S. (and global) economy into the ground in 2008. And it’s a microcosm for the way our economy is going in general: investors using complicated accounting tricks to make money for themselves while dragging down everyone else.
I won’t explain further for risk of obfuscating or mis-representing Garland’s point. But if you shop at Guitar Center it’s a must-read. Even if you’re a musician that refused to shop at GC, it’s still a must-read: the company represents a huge portion of the musical instrument sector and its ripples most certainly effect you anyway. Check it out here.
Thanks to Rob at Metal Injection for sending this in.