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San Francisco-based Gymboree is the latest retail casualty. The company filed for Chapter 11 bankruptcy protection late Sunday, USA Today reports. The retailer could close up to 450 stores out of 1,281, but the timing and list of closures is unknown. Gymboree plans to continue business as usual and said many of its stores will remain open, according to the Los Angeles Times. Gymboree employs about 11,000.
Bankruptcy was expected after the retailer refused to pay recent bills. The retailer plans to reduce its $1.4B in debt by $1B and to receive approval for its restructure plan by Sept. 24. Most of its term loan lenders have provided $35M in debtor-in-possession financing while existing lenders have provided an additional $273M in financing.
Gymboree has struggled to compete with Amazon and other e-commerce retailers, and Gymboree’s online sales represented 21% of its revenue. It has had stiff competition from other children’s clothing retailers like Children’s Place and GapKids.
Other retailers to recently file for bankruptcy include Payless ShoeSource, Rue21 and The Limited. Gymboree was among 22 retailers characterized as distressed in a June 7 report from Moody’s.
Bain Capital Private Equity bought Gymboree in 2010 for $1.8B with plans for major global expansion. Gymboree operates under three brands: Gymboree, Janie & Jack and Crazy 8.
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