More bad news for retail. According to this USA Today report children’s retailer Gymboree has filed for bankruptcy.
Children’s clothing chain Gymboree filed for Chapter 11 bankruptcy protection late Sunday, aiming to slash its debts and close hundreds of stores amid crushing pressure on retailers.
Gymboree said it plans to remain in business but will close 375 to 450 of its 1,281 stores, according to a court filing. Gymboree employs more than 11,000 people, including 10,500 hourly workers.
The bankruptcy was widely expected after Gymboree refused to pay certain bills in recent months, placing the retailer on a collision course with creditors. The retailer said it hopes to slash $1 billion of its $1.4 billion in debt and to win approval for its plan by Sept. 24.
“We expect to move through this process quickly and emerge as a stronger organization that is better positioned in today’s evolving retail landscape, with the right size store footprint and greater financial flexibility to invest in Gymboree’s long-term growth,” Gymboree CEO Daniel Griesemer said in a statement.
Like other retailers, Gymboree buckled amid declining mall traffic, fixed rental costs and online competition. Other mall retailers that have recently succumbed to bankruptcy include Payless ShoeSource, Rue21 and The Limited.
Global financial services giant Credit Suisse predicted last week that up to 25% of nation’s malls could close by 2022.