One in, one out.
Just as Sears Holdings Corp. cut its deal to get out of bankruptcy — and back into the control of Edward Lampert — another part of the retail landscape was set to go dark as Gymboree Group took the Chapter 11 plunge.
The children’s wear retailer, which just emerged from bankruptcy in September 2017, said it couldn’t make a go of it anymore and plans to use the process to wind down all the operations of its Gymboree and Crazy 8 locations. The Janie and Jack business and the intellectual property and Gymboree e-commerce business will be sold as going concerns. An affiliate of Goldman Sachs plans to serve as the stalking-horse bidder in the sale process for Janie and Jack.
Gymboree operates more than 900 stores, including 380 under its namesake brand, and its failure is another hit to a troubled retail world, which has generally underwhelmed despite strong economic growth last year.
“The company has worked diligently in recent months to explore options for Gymboree Group and its brands, and we are saddened and highly disappointed that we must move ahead with a wind-down of the Gymboree and Crazy 8 businesses,” said Shaz Kahng, who was named chief executive officer of the company in November. “At the same time, we are focused on using this process to preserve the Janie and Jack business — a strong brand that is poised to grow — by pursuing a sale of the business as a going concern. As we move ahead, we are working to minimize the impact on our employees, customers, vendors and other stakeholders.”
Gymboree was taken private by Bain Capital in 2010 in a $1.8 billion deal that saddled the company with what was ultimately an unsustainable debt load. The 2017 bankruptcy shaved $900 million off its debt and left the retailer in the control of its lenders, including Searchlight, Apollo Global, Oppenheimerfunds, Brigade Capital, Marblegate, Nomura Securities and Tricadia Capital.