Musical instrument chain Sam Ash Music has filed for Chapter 11 bankruptcy protection days after announcing it would be closing all of its physical stores after 100 years of operation.
The family run business announced it was closing all of its stores earlier this month, having initially closed 18 branches, including its flagship New York store, in March.
As per Tiger Group – the firm involved in closing sales at the remaining 42 stores – Sam Ash has now filed for Chapter 11 bankruptcy as it “pursues options for its go-forward strategy”.
Sam Ash is also said to be evaluating potentially selling its e-commerce operations and related intellectual property.
According to Guitar.com, the hugely popular gear store, which was established in 1924, is reportedly set to auction off its assets. According to court documents, these assets are said to value up to $500 million.
A “stalking horse bidder” has reportedly already been found. Their reserve bid for most of the firm’s assets will be successful unless a potential auction – reportedly set to take place next month – results in a better offer.
“Unfortunately, in today’s post-Covid environment, the challenges to our brick-and-mortar business have necessitated a restructuring,” David Ash said in a statement. “We are exploring a number of strategic options in conjunction with these inventory sales.”
The closure of all Sam Ash stores came 2 May, with the bankruptcy filing coming six days later on 8 May. A flexible auctioning process is reportedly set to be in place, meaning different aspects of the business – such as its retail, manufacturing and distribution departments – can be bought by different parties.
David Ash added, “Sam Ash would like to thank all of our associates, customers, and business partners for their dedication and continued support through these unprecedented times.”
Sam Ash has been contacted for comment.
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