In what seems to be almost a regular weekly occurrence, another well-known retailer announced that it will be closing several stores here. According to a press release issued by the parent company, Twenty Gymboree and Crazy 8 stores in Tennessee will be affected by the company's decision to file a petition for protection under Chapter 11 of the Bankruptcy Act.
The parent company, Gymboree Group, Inc., operates 900 stores under various names. The stores sell different lines of children's clothing. The company said that it has received a commitment for debtor-in-possession financing of approximately $30 million in new loans and a "roll up" of current obligations. The roll-up will act much like a debt consolidation for an individual. If the bankruptcy court approves the loan and the restructuring of the company's debts, the arrangement is expected to provide enough capital to support the company's operations during the Chapter 11 process.
In 2017, Gymboree, which is based in San Francisco, filed a petition for a business bankruptcy, and it closed about 350 of its stores. The company's press release did not provide any information about creditors that may oppose the debtor-in-possession proposal and seek the company's dissolution. As it pursues bankruptcy, the company will continue its search for a buyer of its high end clothing line -- Janie and Jack. The company is also exploring the sale of some of its intellectual property.
The Gymboree bankruptcy demonstrates some of the strategies that can be pursued by a company, while it attempts to rework its financial situation in a Chapter 11 proceeding. Any business that is seeking assistance in restructuring its debts may wish to consult an experienced bankruptcy lawyer for advice on refinancing plans and how Chapter11 can provide protection while the hunt for solutions is underway.