Kids’ clothing chain Gymboree isn’t failing, exactly, but it’s doing business under a massive debt load. Now “people familiar with the matter” say that the chain is planning to close up to 350 of its 1,300 stores, and that its bankruptcy filing could come as soon as next week.
While its plans haven’t been officially announced, The Wall Street Journal’s sources say that it is lining up liquidators that have experience with kids’ clothing to help with the closing of as many as 350 of its stores, though the closing list hasn’t been finalized yet. The company could also be closing its Gymboree outlet stores, Crazy 8 retail stores, and the high-end Janie and Jack clothing chain.
The store closings would be part of a Chapter 11 bankruptcy, but one that would keep the brand and most of its stores alive. Gymboree has over $1 billion in debt, with a massive interest payment due at the beginning of June, so the filing will definitely come sometime in May. The company’s debt total would go down about 40%, but some of the lenders would instead take part ownership of the new version of the company.
Most importantly for consumers, if you’re in need of kids’ clothes, don’t let the brightly colored signs draw you in too early in the store closure process. Especially if outside liquidators take charge, wait until later in the sale, when the merchandise may have been picked over, but deals will be worth your time.