Gymboree has filed for Chapter 11 bankruptcy protection and expects to operate its overall business and the majority of its stores during the restructuring process.
The company said it has signed a restructuring support agreement with its lenders, securing support for restructuring and recapitalization in an effort to reduce its debt by more than $900 million and set up a capital plan.
“The steps we are taking today allow the company to definitively address its debt and enable the management team to turn its full focus toward executing our key strategies, including our product, brand and omnichannel initiatives,” said Daniel Griesemer, president and CEO of Gymboree in a press release. “The support of our lenders and their new financing commitment underscores their confidence in the company.”
Gymboree has secured commitments for $35 million in financing from a majority of its existing lenders and up to $273.5 million in additional debtor-in-possession financing from the existing lenders under its credit facilities. In addition to its ongoing cash flow, this will enable Gymboree to meet its financial obligations throughout the Chapter 11 case, officials said.
Andrew North is stepping down as CFO for personal reasons, remaining with the company for a period of time as a consultant. AlixPartners Director Liyuan Woo has been named interim CFO. James A. Mesterharm, managing director of co-lead turnaround and restructuring services as AlixPartners, has been appointed as the chief restructuring officer.