Quote:
Originally Posted by arcsine
Gibson has pinned itself into the over-$2000 guitar sales ("We have over 40% of the market!") and made a bunch of questionable acquisitions that were aimed at diversifying and creating an entertainment powerhouse (Wurlitzer, Stanton, Cerwin-Vega, Phillips, Teac, Baldwin). They essentially overextended themselves with businesses that have a questionable return and cannot pay their loans. Throw in significant decline in quality of their flagship Gibson products and a significant drop in guitar sales overall and the results have just come in.
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Yup, exactly.
My boss is the former CFO of Monster (the headphone company that invented "beats") and he brought this up with me today. He said Gibson was being run way too much like an old company with new company ambitions and zero clue about the marketplace. When they started straying into consumer electronics, he knew it was the beginning of the end. In that business, if you don't have margin and volume, you're ****ed. Everything goes out on consignment and then the consumer and retailers rake you over the coals. It's the polar opposite of specialty guitars where the value comes from customers who are looking for quality, reputation and service.