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FDP Forum / Moe's Tavern (_8^(I) / Another American icon may be counting it's days ?

hotblooze

World Traveler

Wood, magnetic coil and strings.
Oct 20th, 2017 05:49 PM   Edit   Profile   Print Topic   Search Topic

Big G

is really downsizing.

jefe46
Contributing Member
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State of Jefferson

Oct 20th, 2017 05:59 PM   Edit   Profile   Print Topic   Search Topic

Henry deserves whatever he gets.

What a BS story ... Where does Memphis benefit in this closing.?

Viera
Contributing Member
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Santee CA

I forgot my tagline
Oct 20th, 2017 06:42 PM   Edit   Profile   Print Topic   Search Topic

Just an adjustment to a changing market. While guitars might be popular for a long time, the buying craze is pretty much over.

reverend mikey
Contributing Member
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N of I-90, E of I-29

You're old. Then vintage. Then good!
Oct 21st, 2017 12:21 AM   Edit   Profile   Print Topic   Search Topic

The traffic at the cash register in the guitar shops parallels the traffic on most internet guitar forums and the traffic at most outlets selling music CD's...

...the Baby Boomer generation - the foundation of the guitar/bass/drum instrument market for the past 50 years - is aging and selling off many instruments, not buying as many new instruments, or occasionally looking for deals on used stuff on reverb and e-bay.

It's a demographic reality that can't be overcome by marketing, higher quality, lower prices or new innovations. We're a generation now softly strumming into the sunset...

It is what it is.

JJuran
Contributing Member
******

Boston Area

Oct 21st, 2017 01:18 AM   Edit   Profile   Print Topic   Search Topic

Henry needs help as he is in over his head at this point. He can't steer the company in the right direction these days. His product is legendary. His brand is legendary.

Maybe his Harvard MBA didn't teach him how to compete in the 21st century. He should find somebody that knows how to leverage the brand in today's and tomorrow's economy. Before it's too late.

budg
Contributing Member
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ohio

Home of the Goodyear blimp
Oct 21st, 2017 06:45 AM   Edit   Profile   Print Topic   Search Topic

Gibson has made some blunders under Henry’s watch for sure. I think QC being the biggest one. I think the guitars made at the Memphis factory have long represented a small percentage of the market compared to LPs . Go to any local GC and see the amount of LPs on the wall compared to 335s. Big difference. My understanding is they are moving to smaller space in the area.

littleuch
Contributing Member
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Florida

I'm not as clever as my dog thinks
Oct 21st, 2017 07:03 AM   Edit   Profile   Print Topic   Search Topic

I'd love an ES-335, wish I had kept my 1967 that I bought around 79 for $400. Instead I bought an Epiphone ES-335 Pro during Musicians Friend's SDOTD for under $400. I can tell you it is not one tenth of a Memphis build.

I'm not versed well enough in the dynamic of Henry J's command, but it sure seems to me he's captain of a doomed ship not meant for today's seas. The "brand" has always been an expensive alternative to Fender, etc. The customers are dying off, or living on fixed incomes. Short of reinvigorating popular culture with a new Gibson slinging icon that makes a new generation want to run out and buy a $4000 guitar, what else can be done?




Gene from Tampa
Contributing Member
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Tampa, FL

Live! From God's Waiting Room ....
Oct 21st, 2017 08:39 AM   Edit   Profile   Print Topic   Search Topic

Here's what's happening to Gibson financially based on FINRA's bond database. All this is public knowledge and it's not looking good for them. You can also go to www.glassdoor.com and read employees reviews of the company. There are a lot comments that the current facility is falling apart.

- On August 1 2013 Gibson borrowed $375 million from investors by issuing a bond paying 8.75% interest. The higher the fixed interest rate the higher the risk of being paid back - this is very high. The principal on the bond is due after five years - so it's due 8/1/2018

- Both Moody’s and Standard & Poors have downgraded the ratings on this debt

- The secondary bond market has been dumping these bonds on speculators for cheap. That spike of yield this summer means that original investors were selling their bonds to secondary investors for half of what they paid. If they gave Gibson $100, they sold those bonds to another guy for $50, meaning they were afraid to lose even more of it if they waited until August 1, 2018.

- This means that investors roughly estimate that there’s a one-in-four chance that either Gibson won’t make all its coupon payments or return all the money it owes, a.k.a. default.

I also am reading the founder of the Gibson custom shop is no longer employed at Gibson. And they have stayed in business today by taking out ABL (Asset Based Loans) against existing unsold inventory. We may see a fire sale next August.


5Strats
Contributing Member
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Edmond/OKC

GospelBilly!
Oct 21st, 2017 08:56 AM   Edit   Profile   Print Topic   Search Topic

I own 2 excellent Gibson guitars. However, a lot of Gibson's Mondo Sky High prices are laughable. Who the heck would spend $5,000 and up on a non-vintage guitar (often a reissue)?

Perhaps this practice of overpricing has decreased demand?

budg
Contributing Member
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ohio

Home of the Goodyear blimp
Oct 21st, 2017 09:15 AM   Edit   Profile   Print Topic   Search Topic

Pricing sure has played a huge part . I think trying to produce too many guitars , especially different models while letting the quality slip played a big part. People will pay 3- 5 k for a guitar if the quality is there . But if the quality isn’t people wonder what they are paying for.

Gibson’s motto used to be “only a Gibson is good enough”. Today it should be “it’s good enough, it’s a Gibson”.

reverendrob
FDP Data Goon
Moderator

We all want

our time in hell
Oct 21st, 2017 07:44 PM   Edit   Profile   Print Topic   Search Topic

The hollowbodies (which is all Memphis does at this point IIRC) just aren't that interesting for the younger demographic, and the price is high enough that casual purchases aren't likely to happen.

Best choice for the company at this point, especially given their current situation.

It's a shame, because they're putting out some damn nice instruments in the "affordable" category (under $2k) the last couple years.

Grabbing another '16 or '17 LP High Performance before they're gone in the next few months - if I was to have had a signature LP made without a trem, that'd be it.

Considering putting a Kahler or a Jazzmaster trem on the second, heresy, I know.

Stratmanx
Contributing Member
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Memphis, TN

Oct 23rd, 2017 09:41 AM   Edit   Profile   Print Topic   Search Topic

Before they opened the doors to the Memphis factory 18 years ago I had an in for the GM position based on the recommendation of a good friend who also was on good terms with Henry J.

I was pretty over the moon with this and thought it my dream job.

Until he took me aside a few weeks after and filled me in on how brutally difficult Henry could be to work for.

They went thru 3 GM's BEFORE the doors opened.

I decided instead go to work for St Jude Children's Research Hospital.

18 years later I think I made the right choice.

jhawkr
Contributing Member
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******

Wichita, KS USA

It's all gravy from here on...
Oct 23rd, 2017 11:27 AM   Edit   Profile   Print Topic   Search Topic

I don't think the Gibson brand will totally die in my lifetime or maybe not even my kids. Might be downsized, might go bankrupt. But, no matter what happens negatively, there will be investors to revive the brand or maybe it will be bought out by a competitor. I already have all the Gibson's I need and then some. But if there were some firesale deals, I'd likely be all over it like a duck on a junebug!

MLC

It's not just good..

...it's good enough.
Oct 23rd, 2017 12:54 PM   Edit   Profile   Print Topic   Search Topic

"Where does Memphis benefit in this closing?"

Ah, US corporate-speak. The only language where "downsizing/closing plants" = "growth phase."

jay1vinton

Hawaii, USA

Perfect is the enemy of good enough
Oct 31st, 2017 02:16 PM   Edit   Profile   Print Topic   Search Topic

It appears by reading the articles and about the man himself, that he has steered Gibson into a direction they never were intended for.

Audio products, speakers with fancy woods, acquisitions that do the company no good. Very spotty and ineffective R&D. Outright hated by some products of the strung nature.. it's all on him and his direction of the company.

People have been buying Gibson for decades and loving them, but something changed direction at his takeover.

bongo122819

usa

All I need is one more guitar
Oct 31st, 2017 02:30 PM   Edit   Profile   Print Topic   Search Topic

"....... all over it like a duck on a junebug! "

Let a fellow Jayhawk borrow that saying ?

RicOkc

Nicoma Park, OK.

"Let the music do the talking"
Nov 1st, 2017 02:41 AM   Edit   Profile   Print Topic   Search Topic

The changes Gibson made in 2015 didn't help any.

FDP Forum / Moe's Tavern (_8^(I) / Another American icon may be counting it's days ?




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