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Guitar Center has 269 locations, many of which are in distressed shopping malls long before Covid-19. Foot traffic in malls has plummeted, and stores like Guitar Center, which depend on people making discretionary purchases, have been among the hardest hit this year.
The company said in its bankruptcy filing that it had received up to $ 165 million in new equity investments and lenders agreed to reduce the company’s debt by nearly $ 800 million.
The company’s principal owner, Ares Management Corporation, along with new equity investor Brigade Capital Management and a fund managed by The Carlyle Group will help fund Guitar Center in the event of bankruptcy.
“This is an important and positive step in our process of significantly reducing our debt and strengthening our ability to reinvest in our business to support long-term growth,” said Guitar Center CEO Ron Japinga, in a statement.
“We will continue to serve our customers and fulfill our mission of bringing more music to the world,” Japinga said. He added that the company plans to complete the process by the end of the year.
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