Gymboree Reportedly Filing for Bankruptcy Protection, Closing Stores

Children's clothing retailer Gymboree Group Inc. is reportedly filing for bankruptcy protection and is expected to close the majority of its 900 stores, a source told CNBC. The filing could happen as early this week.

Along with Gymboree, the company's brands Crazy 8 and high-end offshoot Janie and Jack could also be affected, with all three brands under Gymboree Group Inc.'s 900-store umbrella. In early December, the company had said that it was planning to close its Crazy 8 stores as well as a number of Gymboree locations.

Gymboree Group Inc. is reportedly hoping to find a buyer for Janie and Jack, and that store's roughly 139 locations could be liquidated if a buyer is not found. A source told the Wall Street Journal that Gymboree is expected to liquidate.

The WSJ reports that receiving bankruptcy protection would allow the company to secure a loan to help it move through court proceedings and to stay afloat while they search for a buyer. The company will likely return to court sometime this month.

This would be Gymboree's second bankruptcy filing in two years, as the store previously filed in June 2017. At the time, the company was dealing with around $1 billion in debt left from a leveraged buyout by Bain Capital Partners in 2010. After that filing, Gymboree closed a portion of its stores, which previously numbered at around 1,280.

The company's first filing led it to close around 375 stores and eliminate around $900 million in debt.

While Gymboree's clothing stores will close, its Gymboree Play & Music locations will remain open as they were sold to another owner in 2016. Those locations are now a privately-held company owned by international education company Gymbo Global Education Group.

The Play & Music locations echo the company's orignial purpose, as Gymboree was originally founded in the 1970s, offering music and activity classes before expanding into clothing in the '80s.

Gymboree is not the only company to have been affected by new shopping trends, as stores including Toys R Us, Sears, Claire's, David's Bridal, Wet Seal and Brookstone have all filed for bankruptcy in recent years.

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