Guitar Center || Too Big To Fail

Even in the face of Moody’s recent downgrade, a world without GC is not financially probable or viable. Think about the sheer quantity of inventory that they are carrying from all of the major music manufacturers. After walking the NAMM floor and talking with reps and manufacturers, it’s safe to say that the death of Guitar Center is greatly exaggerated. In the world of MI, they are simply too big to fail. The only question that remains to be answered is who will prop them up.

“The downgrade considers that despite Moody’s expectation that GCI will generate relatively stable earnings and positive free cash flow, a significant majority of the company’s debt matures in less than 18 months,” stated Keith Foley, a Senior Vice President at Moody’s. “GCI’s cash flow on its own will not be enough to materially reduce debt and improve leverage within the time frame the company has to address its debt maturities,” added Foley.

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About the author

Mike Dias is a Sales Director for Logitech. He specializes in consumer electronics & pro audio with an expertise in headphones & portable audio. He has over 15 years of experience selling custom handcrafted in-ear monitors.

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