Gymboree is shopping for a bankruptcy loan as it prepares for a second chapter 11 filing in less than two years. The bankruptcy filing, which could come as early January, would allow the struggling children’s apparel retailer to close most of its stores, the people said. However, the company is seeking a bankruptcy loan that would give it the opportunity to keep some of its stores open while it searches for a buyer, the people said. In chapter 11, Gymboree would likely close a majority of its 900 stores, the people said, but the retailer has earmarked more than 100 stores — namely its well-performing Janie & Jack outlets — to put up for sale.
Total Retail's Take: As we close the 2018 calendar year, here's one more reminder of the challenges that traditional brick-and-mortar retailers face adapting their businesses to an omnichannel environment. In addition to those external pressures, Gymboree was also struggling to overcome more than $1 billion of debt from its 2010 leveraged buyout. By cutting back on its store count and re-investing in its growing Janie & Jack brand, Gymboree can potentially manage a turnaround in 2019.