Gymboree Considering Closing Half its Stores

Gymboree is considering closing more than half of its approximately 900 stores, people familiar with the matter said on Tuesday. The move would be a setback for the retailer of infant and children’s clothing after it emerged from bankruptcy last year. Gymboree was one of the few brick-and-mortar retailers that managed to escape liquidation in a wave of bankruptcies that swept the sector, amid the rise of online shopping. Consulting firm Berkley Research Group has been hired to assist Gymboree in evaluating its options, which could include filing for bankruptcy again, the sources said. Berkley Research Group will also look for ways to cut costs, including analyzing the mall-based chain’s leases.

Total Retail's Take: With traditional brick-and-mortar retailers challenged by less store traffic — evidenced by this past holiday shopping weekend — companies such as Gymboree are evaluating their options. Many are coming to the conclusion that they have too many stores to meet current demand. With the rise of online shopping, including mobile, many retailers are opting to downsize their physical footprints in favor of a stronger online presence. Physical stores will continue to exist well into the future, however, the question is how many does your company need in order to maximize profitability. Gymboree isn't alone in searching for that answer.