PRIVATE EQUITY OWNED
Guitar Center
Includes GuitarCenter, GC
musical instruments · Westlake Village, CA
- PE Firm
- Ares Management →
- Year Acquired
- 2014
Bain loaded it with $1.6 billion in debt. Ares inherited the wreckage.
What They Did
- Bain Capital bought Guitar Center in 2007 and saddled it with $1.6B in debt — a $650M term loan, $750M in notes, and a $375M credit facility
- Ares Management took control in April 2014 through a debt-for-equity swap — it had been sitting on the debt Bain loaded up in 2007, and converted that into ownership instead. Ares is still the lead owner after the 2020 bankruptcy, now alongside Carlyle Group and Brigade Capital.
- Filed Chapter 11 in November 2020, eliminating ~$800M in debt; cycled through three CEOs under PE ownership
- Corporate layoffs hit ~180 employees in internal waves, gutting institutional knowledge and customer service quality
- Defaulted on a $45 million interest payment in October 2020 — the debt bill, not the pandemic, is what finally tipped it into bankruptcy
Since the Acquisition
- Went bankrupt in November 2020 — staffing was already gutted and stores had shifted from professional-grade gear to entry-level inventory long before the filing
- Retail staffing cut so deeply that employees report one person now does the work of 3-4 people
- Professional-grade gear inventory gutted — stores now primarily stock entry-level equipment instead of pro-level instruments
- Two California locations closed in January 2025 with 62 employees laid off
Sources
- Guitar Center shutting down locations and laying off workers — Taste of Country(2025-02-01)
- How Guitar Center went from jukebox hero to bankruptcy — Retail Dive(2020-11-23)
- Private equity keeps stabbing Guitar Center — 5 Mag(2020-11-22)
- What Does Guitar Center Bankruptcy Mean? — Rolling Stone(2020-11-22)
- Ares takes control of Guitar Center — Los Angeles Business Journal(2014-04-04)