The end is nigh for Gymboree Group.
The children’s apparel retailer said in court filings on Thursday it intended to liquidate its namesake chain as well as its Crazy 8 stores, after a short-lived attempt to reinvent itself fizzled since emerging almost two years ago from bankruptcy protection.
The company’s higher-end Janie and Jack stores are likely to be put up for bankruptcy court auction next month.
Gymboree, which operates 900 stores—after closing more than 300 in 2017—has struggled to find a niche in a changing children’s wear market.
The company hasn’t been able to attract customers who are less and less inclined to shop at malls and more interested in discount rivals with strong kids brand operating in strip centers. These include Target, (TGT) whose Cat & Jack label for kids became a $2 billion brand in its first year, and Kohl’s (KSS), as well as Walmar<em>t</em> (WMT) and Gap Inc’s Old Navy.
As the Gymboree told Coins2Day last summer, its apparel had grow stale and boring, and out of touch with younger parents. Moreover, its higher costs of operating strained the business during its turnaround attempt.
“The combination of declining profitability and general market uncertainty has hampered the Debtors’ (Gymboree) ability to sustain their funded debt burden and to commit the capital necessary for investing in their operations,” Stephen Coulombe, Gymboree’s chief restructuring officer said in a court filing. “Poorer-than-expected product sales led to deep in-store merchandise discounting.”
Gymboree first filed for Chapter 11 bankruptcy protection in June 2017, choking under $1.34 billion of debt stemming from the 2010 leveraged buyout by private equity firm Bain Capital. It had hoped the better quality merchandise and assortments that lend themselves to mixing and matching, rather than whole outfits, would help it win back customers.
The newest bankruptcy filing gives Gymboree the dubious honor of being a Chapter 22 case, bankruptcy law parlance for an entity that files twice for Chapter 11 protection. In retail, these have included companies like bookstore chain Borders and RadioShack.
