Children's apparel retailer Gymboree Corp., which emerged from bankruptcy in 2017, is again seeking a bankruptcy loan as it prepares for a second Chapter 11 bankruptcy filing, The Wall Street Journal reported Dec. 19, citing people familiar with the situation.
Sources told the Journal that the company is now looking for funding to allow it to keep some of its stores open while it searchers for a buyer.
However, the retailer would likely close a majority of its 900 stores if it files for bankruptcy protection in early January, according to the Journal report. The newspaper's sources said Gymboree has earmarked more than 100 stores, including its Janie and Jack outlets, to put up for sale.
The company emerged from bankruptcy in September 2017, three months after it filed for Chapter 11 bankruptcy protection. During its bankruptcy proceedings, the company received $85 million in term loans from Goldman Sachs and a $200 million revolving credit facility from Bank of America Merrill Lynch and Citizens.
The Journal reported that while Gymboree was able to reduce most of its debt at the time it handed over control of the company to its lenders, it continued to be confronted with declining mall traffic and was subsequently forced to close 300 of its 1,300 stores.
As it considers a second bankruptcy filing, Gymboree has reportedly hired Stifel Financial Corp.'s restructuring advisory arm, Miller Buckfire & Co. LLC, to search for a buyer for the stores, the Journal reported.
The news comes less than three weeks after the company disclosed that it has initiated a strategic review of its Gymboree, Janie and Jack and Crazy 8 brands, which may include a sale, according to the report.
Gymboree also said at the time that it intends to close some Crazy 8 store locations and significantly reduce the number of Gymboree store locations in 2019.