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By: Wee Teck Loo

The legendary guitar maker, Gibson Brands Inc, is reportedly facing a possibility of bankruptcy.  The company’s range of Les Paul and SG instruments were used by music icons such as BB King, Slash and the Beetles. Any self-respecting rocker wannabe must have a Gibson guitar to be accorded Guitar God status by his/her friends.

That said, sales of Gibson guitars have been in decline for quite some time and Gibson is acutely aware of the need to diversify and innovate. Gibson acquired Philips’ audio, home entertainment and accessories business for US$135 million in 2014. The guitar maker also invested heavily to incorporate an auto-tuner onto its guitars. Moving into the consumer electronics business in 2014 is deemed as a decade too late as the market has become highly commoditized, punctured with low margins. Adding an autotuner onto its guitars not only added cost (Gibson guitars are not cheap in the first place) but also offended the purists.

Critically, the music world has evolved. The days of Rock and Roll are long gone and Billboard charts are now dominated by the likes of Ed Sheeran and Bruno Mars. CF Martin & Company, which manufactures Martin-branded guitars, reported strong sales after Ed Sheeran was pictured playing on Martin guitars. The millennial are aspiring to be the next Ed Sheeran and Bruno Mars while strumming acoustic guitars, and not electric guitars by Gibson. Ed Sheeran is singing “Come, come on now, follow my lead” while the legendary brand is at a dark corner singing the blues.

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