While there was no surprise when Gymboree on Sunday finally filed its Chapter 11 petition for bankruptcy court protection, Fitch Ratings on Monday said the company is expected to emerge as a smaller firm.The ratings agency based that conclusion on Gymboree’s continuing support of its financial sponsor, Bain Capital. The children’s retailer has been operating with significant leverage since Bain’s 2010 leveraged buyout transaction for $1.8 billion. The company has had an unsustainable capital structure since the buyout because of negative same-store sales trends and decreasing cash flow.According to Fitch, trading prices on the retailer’s $171 million of senior unsecured notes — bid at 6 cents — due December 2018 and $761 million secured term loan — bid at 45 cents — indicated weak recovery prospects.Gymboree said it has signed a restructuring support agreement with a majority of its term loan lenders — that support should allow the company to restructure its balance sheet and reduce debt by more than $900 million.Fitch said Gymboree’s filing has pushed the institutional leveraged loan default rate to 2.7 percent from 1.7 percent. It said if Sears Holdings Corp. were to file a Chapter 11 petition this year, that would push the rate up to 4 percent.Fitch is forecasting the retail loan default rate to hit 9 percent, or the equivalent of about $6 billion of defaults. The ratings firm is expecting retail defaults because of increased off-price and fast-fashion apparel purchases, as well as the rise of online shopping and a consumer shift from fewer apparel purchases and an increase in spending on services and experiences.Other retailers and firms on its watch list include 99 Cent Stores; J. Crew Group Inc. (which on Monday revealed a proposal to ease its debt pressure); True Religion Apparel Inc.; Charlotte Russe Inc.; Charming Charlie; NYDJ Apparel, and Vince.As of April 29, the bankrupt retailer operated 1,281 stores. The majority — at 582 doors — are operated under the Gymboree nameplate. The balance of the stores are outlets and doors operating under the Janie and Jack and Crazy 8 nameplates.A bankruptcy court for the Eastern District of Virginia has approved a request for the administration of the bankruptcy and affiliated Gymboree debtors.
For its next men’s wear collection, @roberto_cavalli will show as a special guest at #PittiUomo, running from June 12-15. The brand, which has Florence in its roots, will relaunch its men’s wear collection, which will be presented separately from women’s wear for the first time since Paul Surridge was appointed creative director in May. #wwdnews #wwdfashion (📷: @aitorrosasphoto)
“I was making the guacamole when my scout saw me,” says model @stuckinteenage on being discovered just six months ago while working at @chipotlemexicangrill. Since then Williams has signed with @dnamodels, walked in her first show at @calvinklein and landed on the cover of @vogueitalia – a high point of any model’s career. To read @lisajlockwood’s full interview with the model on her experiences thus far, head to WWD.com – link in bio. (📷: George Chinsee)
“I love the idea of dialogue, period. It’s where I’ve always gotten my inspiration from: hearing other women speak, their journeys and their paths,” said @hereisgina, who delivered the keynote speech during @sxsw for @createcultivate in partnership with @fossil. For her two panels, Rodriguez chose female empowering, female-led and female entrepreneurs to focus on. Head to WWD.com to read more about her thoughts on Time’s Up, growing up in a family of women and why we “need a girls’ club.” #wwdeye #sxsw (📷: @jgreenery)
Leading luxury brand are shaking things up to keep up with streetwear. Case in point: the arrival of @mrkimjones as artistic director of @diorhomme. Jones, who succeeds @Kris_Van_Assche, is seen as one of the handful of designers who can actually straddle the luxury and streetwear worlds — which could lead to even more changes at established brands. What could this mean for the rest of the menswear landscape? Head to WWD.com to find out what experts predict #wwdfashion (📷: @franckmura)
“It’s like buying groceries. You’re going to buy the best mango, the best mozzarella, the best things. You have to, or others are going to take it all,” said @gabrielahearst on why she uses only the finest fabrics. Last week, Hearst received her first @cfda nomination for Womenswear Designer of the Year, and earlier this month she opened a permanent showroom in Paris. To read @jessiredale’s interview with the designer and find out why this is shaping up to be a big year for her, head to WWD.com. #wwdfashion (📷: @francoisgoize)
“It’s an interesting thing, playing a younger version of your mother. It’s an interesting concept. I adore my mom and love her in every capacity, but it was just something that had never crossed my mind,” says @anniemstarke on playing a young Joan Castleman in “The Wife.” The same role will be played by her mother Glenn Close. Read more about her growing up in the film industry as the daughter of producer John H. Starke and Close and what she has planned for the future #wwdeye (📷: @nataliamantini)
@asics is launching a new streetwear sneaker inspired by its latest ambassador, @steveaoki. The Hyper-Kenzen x Aoki, which will launch at @footlocker stores exclusively tomorrow, is a slip-on style that incorporates the brand’s proprietary Gel technology through beads integrated into the midsole for comfort and endurance. Read the full story on WWD.com.