No retail store is immune from the slump currently hitting many merchants — not even children’s clothing stores.
Retailer Gymboree just announced it has filed for Chapter 11 bankruptcy protection this past Sunday (June 11).
In addition to this filing, the children’s clothing store will close approximately 450 locations in the hopes of reducing its debts by just over $900 million. It should come as no surprise that the retailer is choosing to go this route as it’s still under heavy pressure of Bain Capital’s $1.8 billion buyout seven years ago.
To help stay afloat during the Chapter 11 bankruptcy filing, Gymboree has secured $35 million from its current term loan lenders and an additional $273.5 million in DIP financing under asset-backed loan credit facilities. While the company undergoes this filing, its CFO Andrew North is stepping down for an undisclosed amount of time, and AlixPartners director Liyuan Woo will serve in the interim.
The retailer’s president and CEO, Daniel Griesemer, commented on this news and how it will impact the business. He said, “The steps we are taking today allow the company to definitively address its debt and enable the management team to turn its full focus toward executing our key strategies, including our product, brand and omnichannel initiatives. We have three great brands, strong operations and dedicated employees, and throughout this process, we will continue to deliver superior service to our customers and put them at the center of all we do.”