Sam Ash, a 100-year-old music instrument retailer, filed for Chapter 11 bankruptcy late Wednesday, saying it intended to close all of its 42 stores in the US.
The family-owned company had faced declining sales ever since the COVID-19 pandemic, which accelerated a long-term shift toward online shopping for musical instruments, Sam Ash chief restructuring officer Jordan Meyers said in court documents.
Sam Ash “has been heavily dependent on in-store traffic, which was eliminated during the pandemic and has materially declined in recent years,” Meyers wrote.
The retailer entered bankruptcy owing about $20 million to its primary lender Tiger Finance, and it has $20 million in unpaid debts to landlords and musical instrument suppliers including keyboard manufacturer Yamaha Corp and guitar makers Gibson and Fender.
Sam Ash had difficulty paying landlords and vendors in April, disrupting its inventory supply and causing the company to be locked out of one of its stores, according to its court filings.
Tiger Finance has offered to buy Sam Ash’s existing inventory, intellectual property and other assets, while providing up to $20 million to fund Sam Ash’s bankruptcy, according to court documents.
Sam Ash will pursue better offers for its business, but any buyer will likely require the company to close some or all of its stores, the company said.
Sam Ash’s brick-and-mortar retail stores earned $145 million of revenue in 2023, while its online sales of musical instruments generated $42 million.
Those numbers were sharply below its pre-pandemic sales, the company said.
The Hicksville, New York-based company has 830 employees.
Its stores are spread across 11 states, including Florida, California and New York.
The largest US music retailer, Guitar Center, filed for Chapter 11 in 2020 to complete a restructuring that eliminated $800 million in debt.