Children’s clothing retailer Gymboree Group, Inc. and its affiliates filed for chapter 11 bankruptcy protection last night in the Richmond Division of the United States Bankruptcy Court for the Eastern District of Virginia. Attorneys from Sands Anderson’s Bankruptcy Team attended the “first day” hearings this morning before the Honorable Keith L. Phillips.
Gymboree previewed a comprehensive, pre-negotiated liquidation process that it hopes to complete by the end of June.
- Gymboree plans to close all of its approximately 800 Gymboree and Crazy 8 stores, and it anticipates conducting going-out-of-business sales at these stores by April 30, 2019.
- Gymboree is hoping that its Janie and Jack brand can survive as a going-concern. It has entered into an agreement with a Goldman Sachs affiliate, Special Situations Investing Group, Inc., to serve as the stalking horse bidder for the auction and sale of the Janie and Jack operations, as well as the intellectual property and online platform for the Gymboree brand. Under the terms of that agreement, a court-approved auction is set to be held no later than February 25, 2019.
- SSIG and Goldman Sachs also intend to provide $30 million in debtor-in-possession financing to support Gymboree’s operations during the bankruptcy proceedings. The financing package, which was approved on an interim basis today, includes a “roll up” of Gymboree’s pre-petition loan obligations in an amount not less than $89 million.
Last night’s filing marks the second bankruptcy for Gymboree in less than two years. As we previously posted, Gymboree first filed in Richmond in June 2017. Judge Phillips also presided over those proceedings, which saw Gymboree close more than 375 stores and eliminate $900 million in debt from its balance sheet. Gymboree reported that its second filing resulted in large part from a decline in retail sales as more commerce moves online.
If you have questions or needs regarding these bankruptcy proceedings, please contact a member of our Bankruptcy Team: