Gibson subsidiary that makes mostly decent quality knockoffs of many Gibson products.

They also make the gold-plated Sheraton that John Lee Hooker plays.

Epiphone was in the musical instrument business long before Gibson was. The company started in 1873 as the "House of Stathopoulo", after the founder, Anastasios Stathopoulo. The company then primarily made violins, switching to banjos in the early 20th century. In 1923, the business incorporated, and in 1928, while Epaminondas Stathopoulo was president of the company, they changed their name to Epiphone, a combination of Epi (Stathopoulo's nickname) and phone (from the Greek word for sound).

Epiphone started producing guitars in the 1920s, and was a major rival of Gibson, especially among orchestral and jazz players. In fact, it was an Epiphone archtop that Les Paul split in half to create his 'log' prototype of the electric guitar that would later be named after him.

The company started producing electric instruments in 1935 with the Electar series of guitars, which apparently had an electrified tailpiece.

During World War II, production stopped and Epi died. A period of mismanagement followed. Union troubles forced the company to relocate from New York City to Philadelphia in 1953, and on May 10, 1953 Gibson purchased the struggling company, and production was moved to Kalamazoo.

Epiphone remained as a brand name, and continued to release different instruments than its parent company. In 1963, the Casino model was released, which quickly became a favorite of The Beatles. (Epiphone historians like to point out that Ticket To Ride was recorded on Epiphone Casinos and that Yesterday was written on an Epiphone Texan model acoustic.)

In 1969, Norlin bought CMI, Gibson's parent company. Norlin had no experience in the music industry, and proceeded to royally fuck things up. The Epiphone name was attached to low-cost guitars built in Japan as a way of competing with the flood of cheap imported guitars.

In 1986, Dave Berryman, Henry Juszkiewicz and Gary Zebrowski bought Gibson from Norlin, who wanted to get out of the music business. The three set about turning the company around.

In the early 1990s, Epiphone became more independent of Gibson again, starting to produce new designs that weren't just copies of higher-profile (and cost) Gibson models, and reissuing classic Epiphone models like the Casino and Rivieras. In 1995, Epiphone moved into its own facility in Nashville.

When buying an Epi, it's rather important to play a whole bunch of them. For some reason, quality is extremely spotty on the production line, and two guitars that may look otherwise identical may be wildly differing in quality. It is perfectly possible to find fine guitars bearing the Epiphone name, but the fact that it's similarly easy to find crap, combined with the low price tag (an Epiphone Les Paul usually costs about 25% of what a similar Gibson would) have given Epis an undeserved reputation of making poor instruments.
Epiphone was also the first company to release pickups with individual polepieces, the truss rod that is adjustable at the base of the neck, and the first double neck guitar. They also hold patents for the predecessor of the wah pedal and whammy bar.
It's also worth noting that the Epiphone logo is suspiciously similar to the Euro symbol, although with only one crossbar. I believe they were both based on an early epsilon, which would make sense.

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