Under New Ownership, Gibson Guitars Invests In A Historic Reboot

Aug 7, 2019

The NAMM Show is the nation’s biggest and most important trade expo for musical instruments and gear. Yet even on the crowded and cacophonous show floor in July at the Music City Center, Gibson Brands, Inc., formerly Gibson Guitar Corp., was dead center and impossible to miss.

High-tech lights beamed down on long rows of electric and acoustic guitars, ready for test-drives. There was a boutique showroom for high dollar instruments, demo work stations for Gibson artisans and a stage where Gibson-endorsed artists played sets over three days. Besides that, a private corporate party offered a buffet dinner and open bar to hundreds at the Wildhorse Saloon, with live sets by the likes of Jason Isbell, Nathaniel Rateliff and Chris Isaac.

At NAMM 2018, Gibson mustered only a light footprint and a few guitars to show in its home city of Nashville. Nobody was surprised because a year ago, the century-old company was going through the throes of restructuring following Chapter 11 bankruptcy. Now under new ownership and management, with most debts settled, Gibson made a statement, which Nashville luthier and guitar expert Joe Glaser summed up in two words: “We’re back.”

“They’re spending money. And that’s great because it says something about the product and the attitude,” said Glaser. “Obviously it was encouraging. Everybody around guitars is sentimental about it. We're optimistic to see what's going on. I work with the factory, and it’s encouraging to see that the investment in going forward is considerable and they're addressing not only hard property but morale.”

The company’s new CEO, James “JC” Curleigh, said the aggressive mindset extends from the trade show floor to the factory floor. “We’ve probably invested more in the last eight months in our factory than we have in the last eight years,” he told WMOT in an interview during NAMM. “There’s such a sense of pride now. People say, ‘JC, we’re not used to this. You just show up and you want to listen and learn.’ And when there’s a quality issue I’ll bring a guitar over and go right to the area where I believe is the root cause and we solve it right then and there.”

 

New Gibson CEO James "JC" Curleigh
Credit Gibson

Gibson’s troubles, it’s widely held, stemmed from leveraged acquisitions of other companies in an ill-fated attempt to become a tech-driven lifestyle brand. Under the leadership of controversial CEO Henry Juszkiewicz, Gibson bought stakes in audio companies Onkyo, TEAC and Phillips. That was on top of an earlier, ultimately unsuccessful acquisition and stewardship of Baldwin/Wurlitzer. According to Bloomberg, Gibson was $500 million in arrears as it approached Chapter 11.

“The company had taken on a ton of debt acquiring categories that weren’t core to who Gibson was,” Curleigh said. “So the first big challenge was to focus back on the core.” During NAMM, the company announced a blizzard of new guitar models, including the return of re-issue Les Paul solid body electric guitars built to original 1959 specs. A new Johnny Winter Firebird, which arrives aged and distressed to look like the late blues guitarist’s instrument, seemed geared to wipe away memories of the much-derided Firebird X, an electronics-loaded, self-tuning model that’s caused Gibson endless PR headaches, right up to last week

Gibson released a barrage of other news during NAMM. They outlined a new creative collaboration program to cooperate rather than litigate with other builders who wish to make and sell models based on Gibson guitar styles. They’ve revamped their artist endorsements as The Gibson Alliance and launched a talent development program called Gibson Generations Group. And they announced a planned move of corporate headquarters from out-of-the-way Plus Park Boulevard near the airport to Cummins Station in downtown Nashville. Denizens of Music City hear Gibsons nearly every day; now they’ll see the logo prominently in the middle of town as well. 

Gibson may be the most consequential stringed instrument company in all of American popular music, with a story stretching back to 1894 when Orville Gibson of Kalamazoo, MI set out to make mandolins. After his death, the legendary Lloyd Loar came on board and designed a new line of guitars and mandolins that became seminal in country and bluegrass. Bill Monroe’s mandolin, Mother Maybelle Carter’s main guitar and Earl Scruggs’ banjos were all Gibson models, and their sibling instruments, vintage and new, are coveted by players to this day. 

The company’s seen and spawned plenty of drama over the decades. Its corporate owners in the 1970s let quality slide and sales along with it. By the mid 80s, Gibson was functionally bankrupt and ripe for acquisition, which Henry Juszkiewicz and two other partners did in 1986. They are credited with saving the famous brand and building it back up as one of Nashville’s most prestigious global companies. That is until the over-reaching and a tumultuous period of executive turnover, low morale on the assembly lines and attrition of some veteran craftspeople, troubles which the industry has lain at the feet of Juszkiewicz, known to all as “Henry.”

Gibson’s new primary owner and lender, the private equity firm KKR & Co. of New York, found JC Curleigh at Levi Strauss & Co., where he’d been in charge of a revitalizing of America’s most prominent denim brand. Curleigh says he was invited to be a consultant on the Gibson project and eventually, because of his interest and his background in music, he was asked to take the top job. “(Seeing) the words Gibson and bankruptcy together, in your soul and your heart you’re like, ‘No, how could that happen?’” he said. “And there I was in San Francisco saying hey, could I help as a guy who loves guitars and Gibson? And here I am eight months later figuring out the future.”

One question about that future that acoustic musicians are asking has to do what’s ahead for Gibson’s vaunted mandolins and banjos. While the company has continually made high-dollar artisanal bluegrass instruments in its acclaimed Nashville-based Custom Shop, it suspended mass-market mandolins and banjos during its crisis years. Curleigh said he wants to restore those lines, but it’s a matter of when and how. “There’s nothing specific on the table but know that it’s a genuine consideration for us,” he said. “We’ve heard loud and clear from the bluegrass community and beyond.”

That’s just part of the re-building that has to go on, now that the flash of the NAMM show is behind Gibson, said Joe Glaser. “It's a long way back from where it was in terms of having the public and employees believe that this is really going to be the change. They need to be convinced, but it looks like that's happening. And happening with the best intentions.”

Curliegh says it’s primarily about consumer trust. “New fans, the next generation are being introduced to a whole new vision of Gibson so that’s exciting. If the last three months is an indicator of the future we’re in good shape.”