The announcement was made by Gymboree Corporation July 11, after news in June that as many as 450 of the company’s 1,300 stores might be in jeopardy of closing. The move by the children’s apparel retailer is one of a flurry of similar announcements by longtime retailers in 2017, and adds momentum to the notion of a “Great Retail Apocalypse” as outlined in a recent Atlantic article, which details the impact eCommerce is having on many established retail outlets, including store closures and bankruptcy filings by J.C. Penney, RadioShack, Macy’s, Sears, Sports Authority, Payless, Lululemon, Urban Outfitters, American Eagle, Polo, and more.
The Gymboree at the Fox Run Mall in Newington will also close.
In a statement addressing customers, the company said after more than 40 years in business, they are “restructuring” to improve it’s financial profile.
“You can continue to shop on our brands’ websites and at most of our stores. While the majority of our stores will remain open, we have decided to close approximately 350 stores, mainly across our Gymboree and Crazy 8 brands, to help strengthen our company as a whole.”
The company’s official statement is below:
The company is taking steps to strengthen the Company’s financial structure and position the business for long-term growth and success. On June 11, 2017, Gymboree entered into an agreement with a majority of its Term Loan Lenders on the terms of a comprehensive financial restructuring and recapitalization of the Company. To facilitate this, the Company elected to file voluntary Chapter 11 petitions with the United States Bankruptcy Court for the Eastern District of Virginia.
Gymboree has three great brands, strong operations and dedicated employees, and throughout this process, the Company will continue to:
- Deliver superior service to its customers;
- Offer great merchandise;
- Provide associate wages and other benefits in the normal course; and
- Pay vendors in the ordinary course for all goods and services delivered on or after June 11, 2017.
The Company has secured commitments for $35 million in new-money debtor-in-possession (“DIP”) financing from a majority of its existing Term Loan Lenders and up to $273.5 million in additional DIP financing from its existing lenders under Gymboree’s ABL credit facilities which, in addition to Gymboree’s ongoing cash flow, will ensure the Company is able to continue meeting its financial obligations throughout the Chapter 11 case. The support of Gymboree’s lenders and their new financing commitment underscores their confidence in the Company.
The Gymboree management team is confident that this financial restructuring is the best path forward for all of the Company’s stakeholders. Gymboree expects to move through this process as quickly and efficiently as possible and emerge as a stronger organization that is better positioned to grow and thrive in today’s evolving retail landscape.
Additional information regarding Gymboree’s restructuring is available at its claims agent’s website. The Company has also established a Restructuring Support Center that can be reached at 844-822-9233 (U.S. toll-free) or 646-486-7945 (for international calls) or by sending an email to gymboreeinfo@PrimeClerk.com.