Children’s clothing chain Gymboree filed for Chapter 11 bankruptcy protection late Sunday, aiming to slash its debts and close hundreds of stores amid crushing pressure on retailers.
Gymboree said it plans to remain in business, hoping to regain its financial footing despite considerable challenges for physical retailers.
The company plans to close 375 to 450 of its 1,281 stores, according to a court filing, putting many workers at risk of losing their jobs. Gymboree employs more than 11,000 people, including 10,500 hourly workers.
The bankruptcy was widely expected after Gymboree refused to pay certain bills in recent months, placing the retailer on a collision course with creditors. The retailer said it hopes to slash $1 billion of its $1.4 billion in debt and to win approval for its plan by Sept. 24.
“We expect to move through this process quickly and emerge as a stronger organization that is better positioned in today’s evolving retail landscape, with the right size store footprint and greater financial flexibility to invest in Gymboree’s long-term growth,” Gymboree CEO Daniel Griesemer said in a statement.
Like other retailers, Gymboree buckled amid declining mall traffic, fixed rental costs and online competition. Online sales represent only 21% of its revenue, and its web systems are “dated and unsupported,” recently appointed Chief Restructuring Officer James Mesterharm said in a court filing.
Mesterharm also said…