Guitar Centers one and only thing holding them up is Liquidity. Guess what it's deteriorating.
S&P downgrades Guitar Center 1st Quarter this year just like they did 1st Quarter of last year. Last year when they were downgraded they were also warned that if the new stores don't perform they should expect another downgrade this year. Well guess what, the new stores didn't perform and same store sales dropped 2.5% hence the additional downgrade. The online component of Guitar Center dropped 8%. Last year they blamed that on moving their headquarters to California. Wonder what they will blame that on this year??
All this is due to the massive debt that they incurred when Bain Capital committed the dreaded Leveraged Buyout in 2007, that the business community seems seems to find totally acceptable. And with Matt Taibbi's assessment it is considered Highway Robbery. This may be the death knell for Guitar Center as they have to have every metric land perfectly in place to handle this debt.
Based on the last 10K and 10Q its not happening......