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From bankrupt to IPOINTL

From bankrupt to IPO

If you don’t know what a phoenix is, there’s no need to go and read about Greek mythology. Just take a look at Center Guitar’s story instead. The music retailer chain went from bankruptcy to IPO in less than a year. But how did they do this? After the company filed for bankruptcy, it was able to get rid of millions of dollars in debt, allowing it to raise new capital. This move made the company more flexible and attractive. So attractive that it decided to file for an IPO. The funds raised by the IPO could settle the remaining debt and allow the company to explore new expansion opportunities. 

When Center Guitar was founded back in 1959, it could outperform competitors by offering an exclusive in-person experience at its stores all over the US. However, the arrival of Covid-19 disrupted its competitive advantage and was topped by online guitar sellers such as Sweetwater.   

why it matters

Center Guitar's story shows us how important it is for companies in all sectors to make contingency plans for unprecedented situations. The one factor that made Center Guitar unique was also the factor that dragged it down the abyss. Center Guitar is now ready to rock on, but let's see if they learned the lesson after the IPO comes through.