The children's clothing retailer, Gymboree, is looking to close its stores across the country as part of a "reorganization" bankruptcy filing.
Popular children's clothing retailer Gymboree is preparing for a complete reconstruction of its stores as part of a Chapter 11 bankruptcy filing. For those unfamiliar, a Chapter 11 bankruptcy filing "provides for reorganization, usually involving a corporation or partnership ... debtor usually proposes a plan of reorganization to keep its business alive and pay creditors over time." According to the Wall Street Journal, Gymboree has reached out to various firms known for liquidating companies' inventories in order to help with the closure of up to 350 of its stores. Gymboree has yet to speak publicly about this matter, neither confirming nor denying the reports. Fortune reported back in early-April that Gymboree was "set to be the next retailer to seek bankruptcy protection" and that the company, left with $1 billion in debt remaining from its buyout by Bain Capital back in 2010, is attempting to reorganize and restructure that debt. In the company's 2017 earnings report, sales both in-store and online decreased five percent during the second quarter of the fiscal year, meaning a net loss of $324.9 million. With over 1,300 stores in operation, Gymboree has struggled over the last couple of years as shoppers have started purchasing their clothing online from other children's retailers who are offering a better selection of merchandise, including Children's Place, Target and Kohl's. This has been a recent trend as of late, with several retailers losing business as online shopping is redirecting consumers' focus, especially on sites like Amazon.com. Part of this change of focus affected stores earlier this year, including The Limited, American Apparel and Wet Seal, who all filed for bankruptcy protection.
Currently, the children's clothing retailer has 15 stores in the Denver metro area under different brand names – eight Gymboree stores, two Janie and Jack, and five Crazy 8 stores. However, not all hope is lost. Gymboree's lenders claim to "still see value in the brand", according to an individual involved in the matter. Guess only time will tell...
What do you think? Have you ever shopped at Gymboree? What do you think about the recent surge in online shopping? Share your thoughts with us in the comments.
Featured image courtesy of FashionUnited.
