It's always disappointing to see a formerly successful business fail, for whatever reason. I'd think that the guitar/bass business has a niche with much less competition as compared to the separate amp/speaker/PA gear business. Keisel allows a tremendous amount of customization, unlike most other guitar/bass manufacturers, whereas Carvin produces products which aren't functionally or cosmetically too different from what is offered by numerous competitors. Further, Carvin's direct-sale model, and absence of local service locations for most buyers, makes it difficult to test-drive their products or to have them serviced, which is a disincentive for some prospective buyers who can also pick from alternatives readily available locally.
It is not improbable that their costs of doing business are also much higher than those incurred by competitors who manufacture elsewhere, making competitive pricing along with reasonable margins a challenge when they are competing for the mass market rather than with the boutique brands which can charge more.
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