We’ve discussed retail bankruptcies in several other blogs lately, as Chapter 11 filings have been the path for numerous familiar corporations in 2017. Now, Market Watch reports that Gymboree Corp. will also be joining the commercial ranks of those reorganizing their business debts.
If you have younger children or grandchildren to shop for, then you are probably well-acquainted with Gymboree and their colorful stores, usually found in malls or outlet areas, all arranged with a tempting variety of good-looking (and usually quite affordable) ensembles for the younger set. Borne originally out of a small operation in San Francisco in 1976, they grew to 1,300 locations in North America, while also selling franchises for the stores which are open worldwide. Gymboree is of course famous too for their ‘mom and baby’ classes.
The retailer’s outstanding debt load currently stands at approximately $1.043 billion, demonstrating why they would be concerned enough to hire a ‘turn-around firm,’ as well as filing for Chapter 11. CFO Andrew North has also left the company during these struggles. It has been reported that Gymboree has $872 million in debt coming due soon, and they have so far managed to find over $300 million in new financing. Gymboree Corp. plans to stay open doing their Chapter 11 reorganization.
As other companies such as Payless and Radio Shack have filed for Chapter 11 this year, many continue to question what is causing these well-known companies to experience such financial distress while others continue to flourish. Embracing the changes in how shoppers go about making their purchases today seems to be a large part of the secret. Many consumers do not want to pay full price for items like clothes when they have so much luck buying name brands at numerous and very popular discount stores like TJ Maxx. Online shopping is mentioned as the main ‘culprit’ for the demise of many of the traditional stores we are so used to seeing at our neighborhood malls; however, most of these retailers also offer that service to their customer. The key must be in finding some balance between offering convenience to customers today profitably—along with managing businesses for the long run.
Is your business in need of reorganization? Let the experienced attorneys at Fitzgerald & Campbell, APLC help you explore your options, especially with business debt settlement. Our attorneys have decades of experience in serving clients with similar financial situations. Let us review your case and discuss what would work best for you. We are here to help!