Children’s clothing retailer Gymboree filed for Chapter 11 bankruptcy protection on Sunday evening as it attempts to escape from a crushing amount of debt.
The retailer will seek to eliminate more than US $900 million of debt from its balance sheet. Gymboree, which was taken private by Bain Capital for US $1.8 billion in 2010, has accumulated US $1.4 billion in debt, according to bankruptcy filings.
Gymboree will also close at least 375 stores, according to the filings, as it attempts to right size its brick-and-mortar footprint. It said it could close as many as 450 of it’s 1,281 stores and will run the rest as normal. Gymboree employs more than 11,000 people, including 10,500 hourly workers.
“The steps we are taking today allow the company to definitely address its debt and enable the management team to turn its full focus toward executing our key strategies,” said CEO, Gymboree, Daniel Griesemer in a statement.
He further added, “We expect to move through this process quickly and emerge as a stronger organization that is better positioned in today’s evolving retail landscape.”
The company said it has received US $35 million in new debtor-in-possession financing from the majority of its term loan lenders and up to US $273.5 million in additional financing from existing lenders.
“The support of our lenders and their new financing commitment underscores their confidence in the company,” Griesemer said in a statement.
San Francisco-based Gymboree opened its first store in 1986 in California and expanded rapidly, going public in 1993. Bain Capital Private Equity took the company private for US $1.8 billion in 2010.