Gymboree To File For Bankruptcy Again, Liquidate All Remaining Stores
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Another national retailer is poised to disappear from shopping centers.
Children's clothing retailer Gymboree will file for bankruptcy for the second time in 18 months and close all of its remaining locations, the Wall Street Journal reports. The liquidation will affect 900 Gymboree locations, although the future of Janie and Jack and Crazy 8 stores, also owned by Gymboree, remains uncertain.
Gymboree first filed for bankruptcy in June 2017 after finding itself unable to pay down $1.4B in debt accrued since it was acquired by Bain Capital Private Equity in a leveraged buyout in 2010. Bain Capital took on $1B in debt to purchase Gymboree, the WSJ reports, for which it planned a global expansion.
The retailer was able to emerge from bankruptcy by cutting $900M of debt and turning over control to its creditors, a group including Carriage House Capital Advisors, Brigade Capital Management and Oppenheimer Funds, according to the WSJ. It promptly closed 375 of its nearly 1,280 locations, but those that remained could not generate enough revenue to keep Gymboree afloat for long.
Gymboree's misery has company in department store icon Sears, which is mired in a bankruptcy proceeding of its own that could spell liquidation. Much like Bain Capital, Eddie Lampert's ESL Investments took on debt to take over and consolidate control of Sears, only to see that debt load drive it into bankruptcy. Lampert is currently fighting against Sears' creditors to prevent liquidation.