Nashville, Tenn.-based Gibson Brands requested court protection from its creditors, saying it had support from many of them for a deal that would allow the company to survive.
Founded in 1894, the company said it planned to continue designing, building and selling musical instruments and equipment, including other brands such as Wurlitzer, Dobro, Epiphone, KRK and Cerwin Vega.
Known for providing instruments to stars such as Elvis Presley, BB King, Keith Richards, Pete Townsend and Lenny Kravitz, Gibson sells more than 170,000 guitars annually in more than 80 countries, according to a court filing. The company claims market share of more than 40% in electric guitars above $2,000.
But sales have declined significantly, and cost-cutting efforts haven't been enough to stop the bleeding. In recent months, lenders required accelerated repayment as the company's business deteriorated.
"Over the past 12 months, we have made substantial strides through an operational restructuring," Gibson CEO Henry Juszkiewicz said in a statement, adding that Gibson will "refocus on our core business" of musical instruments, which "we believe will assure the company's long-term stability and financial health."