The children’s famous clothing retailer, Gymboree Group, has filed for Chapter 11 bankruptcy and announces that they will be closing their 800 stores. Reports indicate that stores could close as early as this week. Established in 1986, Gymboree currently houses a variety of children’s clothing and accessories in the US and Canada. The group aims to keep their 147 higher-end Janie and Jack stores open and is actively seeking a buyer.
This is the company’s second time filing for bankruptcy in under two years. Previously, in June of 2017, the company had filed while dealing with more than $1 billion in debt, tracing back to the leveraged buyout by Bain Capital Partners in 2010. At the time, Gymboree had more than 1,280 stores operating. In 2010, Bain Capital made the attempt to expand into China, South Korea, Australia, and parts of Latin America, but when plans fell short, the company found itself in a hole that was going to be much more difficult to surface from than predicted. To rebound, the retailer was able to reach a deal with most of its lenders, shedding about $1 billon and receiving an infusion of $115 million in new cash. By September, of 2017, the company completed a reorganization.
This round of bankruptcy does not hold as much promise for the children’s retailer. On Thursday, the company announced that “the unanticipated degree of decline of the brick-and-mortar retail industry, among other factors, has made it increasingly difficult to support their cost and capital structure.” Poor sales left the company with extensive discounts on merchandise along with loss of customers to competitors such as The Children’s Place, The Gap, and TJ Maxx.
Janie and Jack, a higher-end brand owned by the group, aims to continue operating their 147 stores and is currently seeking a buyer. The brand is expected to be sold through bankruptcy court auction next month. CNN reports that a unit of Goldman Sachs has already agreed to be a bidder.