Gymboree has filed for Chapter 11 bankruptcy as it prepares to restructure its business.
The Chapter 11 bankruptcy filing from Gymboree was made in the United States Bankruptcy Court for the Eastern District of Virginia. The bankruptcy filing comes after the company has reached a Restructuring Support Agreement with most of its Term Loan Lenders.
Gymboree claims that this agreement will allow it to restructure and refinance itself. The company says that this will let it reduce its debt by more than $900 million, as well as prepare it for long-term stability.
Gymboree is planning to continue its operations while it undergoes Chapter 11 bankruptcy. It has already obtained commitments for $35 million that will allow it to do this. With this funding, children’s apparel retailer says that most of its stores will remain open.
According to its filings with the United States Bankruptcy Court for the Eastern District of Virginia, Gymboree will be closing between 375 and 450 of its physical retail locations. The company operates a total of 1,281 stores.
Along with its announcement that it is closing stores and the Chapter 11 bankruptcy, Gymboree has announced other changes. The company says that Andrew North is stepping down as the CFO of the company. The search for a replacement is already underway and Liyuan Woo, Director at AlixPartners, is acting as the company’s interim CFO.
Gymboree’s decision to file for Chapter 11 bankruptcy comes as many physical retailers are struggling the keep up with the surge in e-commerce. There are several other retailers that also may not be too far off from bankruptcy.