Do you have a Gymboree gift card, or items to return or exchange? Stop putting that shopping trip off, because there are reports that the debt-laden children’s clothing retailer and enrichment class provider might be preparing to file for Chapter 11 bankruptcy soon.
The chain hasn’t turned a profit since 2011, before most of its current customers were born, and is facing the same problems as other mall and apparel retailers. The chain has a total of 1,300 stores at a time when running physical stores has become a burden for some companies.
“People with knowledge of the matter” tell Bloomberg that the retailer wants to reorganize its debts, perhaps trading control over the company to its lenders instead. Gymboree was debt-free at the time of its buyout by Bain Capital in 2010, but now has over $1 billion in debt, with a large interest payment due on June 1 of this year.
Gymboree competes with other children’s clothing brands as well as discount and department stores. The company also owns the high-end and discount brands Janie and Jack and Crazy 8, which are separate chains, as well as Gymboree outlets.
Companies typically give customers 30 days after a bankruptcy filing to use their gift cards, which is why you should dig yours out of the desk drawer if you have any.
Gymboree would be the first kid-oriented brand to file for bankruptcy in 2017, but retail bankruptcies are piling up, with more in the first quarter of the year than in the entire year of 2016.