Earlier this year, we made a prediction about 5 retailers that could be in trouble in the future, and unfortunately, one of the retailers on the list just filed for Chapter 11 bankruptcy. On the list, among the retailers we predicted could be at risk included Topshop, GNC, J.Crew, and Gymboree.
Each retailer faces a variety of different issues, from scandals and increased competition to store closures and overshadowing debt. In some cases, brands are able to overcome these problems, whether it be through new leadership, acquisition, or a refocused mission. But sometimes, even after major changes, the problems persist.
Gymboree has filed for Chapter 11 bankruptcy for the second time in two years.
Just this week, it was announced that the children’s wear retailer was successful in its filing for Chapter 11 bankruptcy. The company plans to close all of its Gymboree locations in Canada and the United States, as well as its Crazy 8 brand in the United States.
The news comes just two years after the company was able to successfully escape bankruptcy in 2017. In its first go, Gymboree closed and liquidated 330 underperforming store, helping them to shed around $900 million in debt.
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But unfortunately, there was no light at the end of the tunnel for Gymboree.
“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,” Shaz Kahng, the Gymboree Group CEO said in a press release. “We have tremendous appreciation for the hard work of our dedicated employees and their commitment to Gymboree Group and our customers. We are also incredibly grateful for the many years of support by our vendors.”
Industry analysts attribute Gymboree’s downfall to its collection of children’s apparel brands that were “cannibalizing each other.”
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The Gymboree bankruptcy process sees the company enter with $30 million of debtor-in-possesion financing.
With around 900 stores across the globe, Gymboree will be closing them all. However, they will continue to operate the stores and e-commerce sites while they work on the going-out-of-business sales plan.
After over 40 years in business, it’s sad to see another long-standing retailer exit Canada. But until the company closes its doors for good, we’ll continue to support Gymboree during the liquidation sales.
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Featured image: Square One