Another week, another US retail chain collapses…
Yet another US retail chain has collapsed, placed in bankruptcy protection while it tries to chart a course to recovery.
Children’s apparel chain The Gymboree Corp has long been the subject of bankruptcy speculation. This week it became the 11th major retailer to succumb, following names including Payless ShoeSource and Rue21 Inc, among others.
Gymboree has more than 1300 stores across the US and 36 international markets, including Mexico, Colombia, Brazil, China, Ecuador, India and Saudi Arabia. In addition, it franchises nearly 300 Gymboree Play & Music centers around the globe. The retail stores trade under its own name as well as Janie and Jack and Crazy 8.
The company told bankruptcy court it had liabilities in excess of US$1 billion and assets of less than $500 million. Deutsche Bank is owed more than $171 million.
The California-based retailer, which recently appointed former Tilley’s head Daniel Griesemer as its new CEO, says it plans to continue operations as normal while it restructures, despite closing some 375 stores.
“The steps we are taking today allow the company to definitively address its debt and enable the management team to turn its full focus toward executing our key strategies, including our product, brand, and omnichannel initiatives,” Griesemer said in a statement.
In March, Gymboree reported a 5.5 per cent year-on-year slump in retail sales to $629.2 million in the first half year, and a net loss of $335.8 million, compared with a $39.4 million profit during the same period last year.
Most of that loss resulted from a writedown of its goodwill and assets of $368.1 million.
The first Gymboree stores opened in 1986. Private equity company Bain bought the business in 2010.