Gymboree Closing Hundreds of Stores
The Gymboree Corporation, a prominent retailer of children’s clothing and accessories, has announced that it will be closing 350 stores across the country.
Gymboree currently employs a workforce of over 11,000 employees, thousands of whom will lose their jobs following the store closures.
The announcement came a month after the San Francisco-based company filed for bankruptcy. In June, Gymboree filed for Chapter 11 bankruptcy protection against its creditors after struggling to meet its debt obligations. The company is currently undergoing massive restructuring with the goal of trimming down its gigantic debt load.
At the time of the bankruptcy announcement, Gymboree hinted that it may close as many as 450 stores as part of its restructuring plan. Management indicated its plans to shutter unprofitable locations and focus company resources on locations with promising sales potential. To achieve profitability, the company said it would reduce its store count to reach the “right size.”
The retailer has been dealing with mounting debt while its sales have been slipping. Stiff competition from rivals like Childrens Place Inc and Gap Inc has been keeping Gymboree on its toes. Meanwhile, the rise of Amazon.com, Inc. has been hurting many brick-and-mortar retailers.
Gymboree operates most of its stores out of malls. However, American consumers are shifting away from mall shopping and toward online shopping. With big department store companies like Sears Holdings Corp and Macy’s Inc closing their physical locations, many malls have lost the anchors that once served as major attractions for shoppers. With the number of mall visitors declining, Gymboree has seen a dip in foot traffic at its stores.
This has forced Gymboree to reconsider its options and close down unprofitable locations to save on lease costs. Gymboree is now making an effort to survive bankruptcy proceedings and re-emerge with reduced debt and increased profitability.
The children’s apparel retailer currently operates roughly 1,300 physical stores. Most of these are being operated under the Gymboree brand. However, some of these locations are being run under the two other brand names that Gymboree owns, Crazy 8 and Janie and Jack.
“The list: Gymboree names 350 closing stores,” USA Today, July 12, 2017.