As the axe continues to loom over the heads of Gibson Guitar, namely CEO Henry Juszkiewicz, it seems the brand are already making smaller cuts as they lay-off their Custom Shop workers amid another downgrading on their viability.
“With multiple maturities looming and operating weakness ongoing, we believe Nashville-based Gibson Brands could default on its debt obligations over the next six months,” Standard & Poor’s said in a note to clients. “We are lowering our corporate credit rating to ‘CCC-’ from ‘CCC’.” The brand is facing $519 million dollars in debt, as of 31st December, 2017.
The negative outlook reflects what S&P Global called the “increased likelihood” that a default or restructuring event could occur within the next six months, the rating agency also said.
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The troubles seem to be piling up on Gibson, as news broke that they were beginning to hand out redundancies to their Custom Shop, which sees workers creating custom/vintage guitars, with 15 workers affected. Although, this has been quickly refuted by the brand.
The Nashville Post quoted Gibson Chief Executive Henry Juszkiewicz as saying that the staff cuts are “part of broad initiative throughout the company to prepare for our refinancing…”
It’s not looking good though, is it?