There are signs that Gibson’s move to diversify isn’t working out as planned. Moody’s Investor Service has downgraded Gibson Brands (formerly Gibson Guitar Corporation) credit to junk status, and according to reports, the company has put up two of its Nashville warehouses for sale as a result.
Moody’s gave 3 reasons for the downgrade:
1. “Weak operating results” as a result of a poor reception to the company’s 2015 guitar line.
2. Frequent management changes in its finance department.
3. The company’s recent move into consumer electronics and the associated risks of doing so.
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