Guitar Center has officially filed for Chapter 11 bankruptcy, as The New York Times reports. The company filed on Saturday night (November 21) in the U.S. Bankruptcy Court of the Eastern District of Virginia, according to the Times. Guitar Center will continue to pay employees amid bankruptcy. Read the full report here.
The looming possibility that Guitar Center might file for bankruptcy was reported by the Times and Bloomberg last month. The company faced financial strain after it was forced to temporarily shutter most of its physical locations earlier this year due to the COVID-19 pandemic. At one point, 75 percent of Guitar Center’s stores were closed across the US.
According to a statement posted on Businesswire, Guitar Center will “continue to meet its financial obligations to vendors, suppliers, and employees, and intends to make payments in full to these parties without interruption in the ordinary course of business.”
“This is an important and positive step in our process to significantly reduce our debt and enhance our ability to reinvest in our business to support long-term growth,” Guitar Center CEO Ron Japinga said in the statement. “Throughout this process, we will continue to serve our customers and deliver on our mission of putting more music in the world. Given the strong level of support from our lenders and creditors, we expect to complete the process before the end of this year.” Find the full statement here.