Gymboree Exits Bankruptcy But Will Reduce Its Footprint by Shuttering Hundreds of Stores Across the U.S.
Gymboree Group Inc, the children’s apparel retailer, is another casualty in the retail industry massacre that the U.S. has experienced in 2017. The company exits Chapter 11 bankruptcy but will experience about 330 Gymboree stores closing, with some areas of the U.S. affected more than others.
Retail stores have been unable to keep up with the mounting pressure of online shopping and other threats to the business model, with the industry as a whole losing thousands of jobs and several high-profile bankruptcies being filed in 2017.
While the hundreds of Gymboree stores closing are not focused on one particular region of the U.S., some cities and states were hit harder than others. Little Rock, Arkansas, for instance, will see three Gymboree stores closing.
California, meanwhile, will witness over 20 of the children’s apparel retailer’s stores closing. The store closings are spread across the state. San Francisco and San Jose will both be shuttering two stores apiece, while other smaller communities like Newark and Mill Valley will also see Gymboree stores closing.
Florida will be shuttering 18 Gymboree stores, similarly spread across the state in smaller communities as well as in larger urban centers. Orlando, Sarasota, and Tampa will all see Gymboree stores closing.
More Gymobree store closings may be on the way, as the company filed for bankruptcy in June, saying that as many as 450 stores could be shuttered by the end of the restructuring process. The company will still have over 900 stores open by the end of these mass closures.
The company is based out of San Francisco and has experienced the malaise that has come to define retail brick-and-mortar stores in 2017. Many of Gymboree’s competitors have faced similar downturns as Amazon.com, Inc. (NASDAQ:AMZN) and other online shopping options have siphoned off much of the traditional consumer base for these companies.
Gymboree Completes Financial Restructuring After Closing and Liquidating 350 Stores
Gymboree found itself struggling with about $1.4-billion in debt before it filed for Chapter 11 bankruptcy in June 2017. It was taken public in 2010 and purchased by Bain Capital for $1.8-billion.
The company expects to complete its financial restructuring process and exit Chapter 11 bankruptcy protection by the end of the month with an approximately $900.0-million reduction in its debt load. The closings are being undertaken in an effort to ensure that Gymboree establishes a sustainable business model as it attempts to claw its way out from beneath its debt.
“We are very pleased with the court’s approval of our plan, which marks a major milestone in Gymboree’s restructuring process and facilitates a path forward to our emergence as a stronger and more competitive organization,” said Daniel Griesemer, the company’s President, and CEO, in a statement.
“While there is still work ahead to complete the process, we are excited about the future opportunities for Gymboree as we continue to transform the business. The powerful combination of our great brands, a right-sized retail footprint, dedicated employees, and loyal customers are now amplified by the greater financial flexibility the plan provides.”
The company has as many as 1,281 retail stores as recently as May of this year.
Gymboree and many other retailers in a similar position will have to find a way to overcome the mounting difficulty that the industry is facing as a whole.
“Gymboree’s reorganization plan confirmed in the bankruptcy court in Richmond; expects to emerge later this month,” Richmond Times-Dispatch, September 11, 2017.
“Here Are The 331 Stores Gymboree Plans To Close,” Consumerist, July 13, 2017.
“Gymboree to exit bankruptcy,” Chain Store Age, September 8, 2017.
“The list: Gymboree names 350 closing stores,” USA Today, July 12, 2017.