What s up guys! It s Jason here and welcome to my YouTube channel, Rock n Roll Insight!
One of the classic Beatles' albums was simply entitled
the "White Album." One of the recordings was "While My Guitar Gently Weeps." What a great
song that was
A little bit of rock 'n roll trivia. The guitar solo on that album was provided by Eric Clapton.
Clapton's choice of guitar brand to musically capture the mournfulness of this classic song
was a Gibson Les Paul guitar. That particular original recording became a classic song,
sung by a classic group, with the guitar instrumental played by a classic guitarist on a classic
guitar.
Gibson Brands is one of the most interesting and fascinating companies to me because the
company faced a huge boom followed by a bust where the brand was no longer relevant to
millennials and the Gen Z audience anymore and went bankrupt. Even though the Company
has been staging a huge comeback in the past few years, stiff competition has been eating
away. Today we ll explore the Rise and Fall of Gibson Brand Guitars and what will happen
to Gibson in 2022.
But before we begin, I need a quick favor from you. If you wouldn t mind just hitting
that LIKE button for the YouTube algorithm, I d appreciate it. As this is a brand-new
channel I started this year, it helps me out a ton and it allows me to continue to make
great videos like this! Thanks for doing that and now let us continue on with the the Gibson
Guitar Comeback of 2022.
Gibson Guitar History
Let s step back in time. Unfortunately, even the most classic products representing the
epitome of their craft are subjected to the ebb and flow of business dealings. Such was
the case with Gibson Guitar as described in a 2018 Company Man video that talked about
the financial discord being experienced by this guitar company.
One viewer of the video suggested that a follow-up video be produced as to what has become of
Gibson Guitar Company. The video indicated that Gibson was in deep financial turmoil.
So in response to the viewer let the music play on.
Broken Strings at Gibson Guitar
Entertainment greats such as Pete Townsend, B.B. King, and Elvis Pressley, even though
offering different styles of singing and music genres, had many things in common. In addition
to being wonderful, skillful musicians and entertainers in their own right, their choice
of musical instrument was the Gibson Guitar.
Gibson Guitar had a long and illustrious musical creative relationship with musicians since
1894 when it began creating guitars. Unfortunately, they played a few bad notes and most likely
overextended themselves financially by acquiring other companies. Some of those purchases were
Onkyo audio company in 2012 and TEAC in 2013 and Philips Home Entertainment System in 2014.
Can you believe they even acquired Philips? These acquisitions were not necessarily poor
business decisions but certainly added to the burden of indebtedness for the company.
But the business logic of expanding made sense at the time, even I admit, as people were
moving away from guitars to online instruments and cheaper brands.
When the reverberation of the final acquisition note was played, Gibson guitar found themselves
in debt to the tune of $500 million. To pay off their debt, as per Company Man, Gibson
Guitar took out a few loans but also sold bonds. When the investment payment back to
those who had purchased the bonds came due, Gibson was strapped for cash and was unable
to fulfill its financial promise.
In May of 2018, Gibson filed for Chapter 11 protection under the bankruptcy laws.
As the bankrupt battle of the bands ensued, there were a number of restructuring options
offered and the lawsuits from suppliers all played out. One major supplier was a German
Auto-Tune software provider who filed a $60 million lawsuit.
New Sheet of Music
Gibson Guitar Company can rightly claim as their theme song, Rock 'n Roll is here to
Stay." However, their reprise could joyously be re-entitled "Gibson Guitar company is here
to stay." In October of 2018, the restructuring plan for Gibson was approved by the bankruptcy
court of Delaware.
In addition was the demise of their CEO, Henry Juszkiewicz, who had served in that role since
1986. The search for a new lead guitarist (CEO) took place.
The CEO search identified a leader who was working in the clothing manufacturing industry.
Specifically, his leadership in the Levi Strauss Company in 2012 earned him a reputation of
taking an iconic Americana classic brand and re-establishing them in the garment industry
while building on its classic heritage and authenticity. If you haven t seen my video
yet, check out the Rise and Fall of Levis in 2022.
In October of 2018, James 'JC' Curleigh was named as the new member of the band. As CEO
of Gibson he pledged to lead them forward by going back to their musical roots in providing
quality musical instrument to guitarists. In addition to his celebrated and successful
reemergence of Levi Strauss, Curleigh is an actual guitarist and as such has a great appreciation
for music and the role that the guitar plays. It seemed that this was a perfect blend to
lead the guitar company back to the spotlight of guitar production. A guitar player with
business acumen for re-invigorating fading businesses or is it the other way around?
A businessman with a flair for playing the guitar.
The New Gibson Guitar 2.0
Nevertheless, in 2019 Gibson Guitar reemerged after reinventing itself and what better way
to make an announcement about their come back on the musical stage than to throw a guitarist's
bash.
In January 2019, Gibson took to the stage at the NAMM conference in Anaheim. The come
back party include such musical guests as Peter Frampton, Robbie Krieger, Black Pistol
Fire, and other artists who had musical relationship with the Gibson Guitar. Added to the continuing
party of their come back was a Chuck Berry tribute that was held on March 12 of 2019.
The bottom line and commitment of Gibson Guitar was that, like the prodigal musician, were
returning to their musical roots of concentrating on their guitar production and their customers.
2019 proved to be a musical masterpiece for Gibson Guitar as they enjoyed a successful
year after emerging from bankrupcy. In December of 2019 alone, 380 quality Gibsons were manufactured
on a daily basis.
And, adding to the continuing legend, where else would a successful musical producing
company be located? Gibson Guitar would relocate their music presence from Memphis to Nashville;
music city itself. An indicator of their success was soon reflected in the opening of downtown
offices in Cummins Station. With the presence of their factory, employing 350 to 400 workers
and an additional employee complement of 120 in their custom shop, proved to be a significant
positive business experience for Nashville and the company.
Also, an acoustic guitar facility operated successfully in Montana.
As the company was successfully remerging along came the show stopper known as Covid-19.
It was decided for the safety of all concerned that the locations in Nashville and Bozeman,
Montana would temporally suspend operations.
Gibson Guitar in 2022
Gibson Guitar is successfully playing along today. How do you think they fared during
COVID in 2020 and 2021? Well, let me tell you this. Due to the Covid-19 pandemic it
appears that that there was a "stairway to heaven" silver lining. People, who had time
on their hands decided to put their idle time to good use. A popular choice was learning
to play the guitar. Curleigh, Gibson Guitar CEO, has indicated that there has been a influx
of a new generation of guitarists. For the first time, more budding musicians have learned
how to strum and finger chords on a guitar this past year than in the previous decade
combined.
Obviously, an increase in guitar interest is amplified into increased revenue. Now that
is music to one's ears especially for those in the guitar business and specifically at
Gibson Guitar. Gibson Guitar over a three year period, 2013 to 2016, experienced a decline
in review to the tune of falling from $2.1 billion to $1.7 billion. It is not a very
catchy tune.
In regards to 2021 actual sales and revenue, final numbers are not available. However,
Curleigh stated that sales have steadily increased since August of 2020. Additionally, rising
waters raise all boats and Fender, major competitor of Gibson, reported annual sales of $700 million.
This was a 17% increase in guitar sales for Fender. Insiders say Gibson s order book and
sales backlog are now the largest in the company s history. Talk about turn around! I definitely
expect this to continue going forward for Gibson in 2022.
The Gibson Guitar Company is a musical success story. It is a classic story that parallels
life in that wrong notes are played but with practice and continuing to play through, they
are part of the process. Gibson Guitar is no longer weeping!
So with that said, thank you so much for watching
my video. There was a significant amount of research, and guitar playing that went into
making this video possible. If you haven t seen already, check out my video on the Harley
Davidson USA comeback of 2022 or How Judge Judy became one of the richest women in the
world. Those are my personal favorites on my channel. I highly recommend both. As always,
stay happy and healthy and stay tuned for another episode of Company Insight next week.