(KGTV) — Guitar Center, the county's largest musical instrument retailer, is expected to file for Chapter 11 bankruptcy after reaching a deal to restructure its debt.
According to Bloomberg, the retailer's restructuring plan aims to reduce its debt by $800 million.
"With ten consecutive quarters of growth prior to the impact from COVID-19, we have been pleased with our resilient financial performance during these challenging times created by the pandemic," Guitar Center CEO Ron Japinga said in a statement. "As a result of this financial restructuring process, we will be better equipped to execute on and invest in our strategic growth initiatives and we will continue delivering through the strength of our brands, availability of our stores, customer-focused associate relationships, innovative music education programs and our expanding digital solutions."
The plan includes $165 million in new investments from funds managed by the company's private equity owner Ares Management, the Carlyle Group, and Brigade Capital Management, Bloomberg reported.
Filing for Chapter 11 would allow Guitar Center to keep operating while the company works to turn around its business performance. Employees and vendors would still be paid as usual under the move as well.
The company's announcement adds that its services will not be interrupted during the debt restructuring, and that, prepaid lessons, rentals, gift cards, and all merchandise credits will still be honored.
Guitar Center has three locations in San Diego County in San Marcos, La Mesa, and San Ysidro.