Gibson Brands Start Laying Off Staff, Philips Audio Business Threatened
Gibson Brands the Company behind Philips audio products and is the biggest shareholder in Onkyo has moved to lay off staff as sell property assets as they struggle to refinance debt.
At this stage the layoffs are at their US music instrument manufacturing plants.
The Company is on the brink of bankruptcy, with creditors and bondholders fretting over the future of the company. In Australia Onkyo products are distributed by Ambertech and Philips products by Powermove.
ChannelNews understands that Philips has been approached by an Australian Company with a view to taking over the manufacturing and global distribution of the Philips audio business if Gibson is placed into Chapter 11.
According to US media the poor state of the Company’s finances could see CEO Henry Juszkiewicz the man who has driven the expansion program based on debt, dumped within days.
The big issue for the Company is the refinancing of nearly $500M in current loans, by a Company that has annual revenues of $1B.
CFO Bill Lawrence parted ways with the company in 2017 after less than a year on the job, and several critical loan deadlines are looming.
Gibson recently brought on board an investment bank to aid a refinancing effort.
In 2011, Gibson acquired the Stanton Group, owner of several audio-equipment manufacturers, and launched Gibson Pro Audio for sales of audio items like speakers, headphones and DJ equipment.
In the following years, Gibson acquired several more audio-equipment and electronics firms such as Onkyo. Sales didn’t exactly explode, and customers were especially displeased when popular DJing equipment and audio software programs were subsequently discontinued.
Gibson was also left reeling in 2012 when it admitted to violating the Lacey Act and paid substantial fines after federal agents discovered illegally imported wood during raids of company factories. The dearly departed Gawker also reported this gem of a story about Juszkiewicz back in 2014.
The company has recently been trying to offload some of its real-estate holdings in Nashville, but even if those sales come to fruition, they’re unlikely to stanch the bleeding.
Gibson was founded in 1902.