Gymboree is seeking a bankruptcy loan as it prepares for a chapter 11 filing that could allow the retailer to close most of its stores, people familiar with the matter told The Wall Street Journal. The filing, which could come as soon as January 2019, would mark Gymboree’s second bankruptcy in two years.
The retailer would likely close a majority of its 900 stores during the process; another 100 stores have been earmarked for sale. The retailer’s high-performing Janie & Jack outlets make up most of the stores tagged for divestment, according to people familiar with the matter. However, negotiations are ongoing and may not result in bankruptcy.
Gymboree already initiated a strategic review of its brands earlier this month, and a sale of the entire brand is among the possible paths for the retailer. The current process will include closing its 265 Crazy 8 locations and shuttering some of its 380 Gymboree stores in 2019, though all stores will remain operational through the holiday season.
Additionally, Gymboree has hired Shaz Kahng as Gymboree Group CEO. Kahng brings turnaround experience from leadership roles at brands including Lucy Activewear and various Nike business segments, but he will have to combat the decline in mall traffic that sources say has been hitting Gymboree hard since it emerged from court protection.