Children’s clothing store files for Chapter 11, plans to close all 380 Gymboree stores including ones at the Visalia Mall and Tulare Outlets
SAN FRANCISCO – Another national retailer has gone bankrupt leaving soon-to-be-vacant store fronts in Tulare County malls.
Children’s clothing store chain Gymboree announced on Jan. 16 that its parent company, Gymboree Group, Inc., and its subsidiaries have filed for Chapter 11 bankruptcy. The company plans on closing all 380 of its stores including locations at the Visalia Mall and Tulare Outlets as well as Fashion Fair Mall in Fresno.
The Company has entered into an asset purchase agreement with Special Situations Investing Group, Inc., an affiliate of Goldman Sachs & Co. LLC, which will serve as the stalking horse bidder in a court-supervised sale of Janie and Jack. Gymboree Group expects to conduct an auction by Feb. 25, 2019. As part of the agreement, SSIG has agreed to acquire the Janie and Jack business and the intellectual property and online platform for Gymboree. The asset purchase agreement sets the floor for the auction, which is designed to achieve the highest or otherwise best offer, subject to approval by the Bankruptcy Court. Gymboree Group has received a commitment for a debtor in possession financing, which consists of $30 million in new money loans to be provided by SSIG and Goldman Sachs Specialty Lending Holdings, Inc. and a “roll up” of all of Gymboree’s obligations under the prepetition Term Loan Credit Agreement in an amount not less than $89 million. If approved by the court, the financing package is expected to support the Company’s operations during these proceedings.
Shaz Kahng, appointed in November 2018 as Gymboree Group CEO, said, “The Company has worked diligently in recent months to explore options for Gymboree Group and its brands, and we are saddened and highly disappointed that we must move ahead with a wind-down of the Gymboree and Crazy 8 businesses. At the same time, we are focused on using this process to preserve the Janie and Jack business – a strong brand that is poised to grow – by pursuing a sale of the business as a going concern. As we move ahead, we are working to minimize the impact on our employees, customers, vendors and other stakeholders.”
Ms. Kahng continued, “We have tremendous appreciation for the hard work of our dedicated employees and their commitment to Gymboree Group and our customers. We are also incredibly grateful for the many years of support by our vendors. And, finally, we thank the customers of the Gymboree, Janie and Jack and Crazy 8 brands for their loyalty – our teams have been proud to serve you since Gymboree was first started as a provider of mom-and-baby classes in 1976.”
Gymboree, Janie and Jack and Crazy 8 stores and online platforms are currently open and continuing to serve customers. Gymboree Group will provide more details about the plans for its Gymboree and Crazy 8 going out of business sales in the near term.
Gymboree Group has filed a number of customary motions with the U.S. Bankruptcy Court to support its operations during the process, including authority to continue payment of employee wages and maintain healthcare benefits and certain other relief customary in these circumstances. The Company has sought authorization from the Court to continue to honor customer gift cards for 30 days. Gymboree Group has discontinued its GymBucks and Gymboree Rewards programs effective immediately.
Additional information regarding Gymboree Group’s Chapter 11 filing is available at www.GymboreeGroupRestructuring.com. Court filings and information about the claims process are available at cases.primeclerk.com/gym or by calling the Company’s claims agent, Prime Clerk, at 929-272-0801 (or toll-free at 844-399-4163 for international calls), or by sending an email to email@example.com.
Gymboree Play & Music, a separate entity, is not included in the court proceedings.
Gymboree began in 1976 offering mom-and-baby classes in the San Francisco Bay Area and began making its own brand of children’s clothes in 1986. After launching sister brands Janie and Jack and Crazy 8, the company grew to operating over 900 retail stores in the United States and Canada, along with franchises around the world.