Children's clothing seller Gymboree Corp. has filed for Chapter 11 bankruptcy protection, the latest sign of traditional retailers' struggles as shoppers shun stores and buy online.
The San Francisco-based company said it is seeking to reduce its debt load by $900 million, and it expects to operate its business and majority of its 1,300 stores during the restructuring.
Gymboree is the latest retailer this year to file for Chapter 11, close stores or go out of business entirely. Mall-based clothing stores have been especially hard-hit. The owner of brands including Ann Taylor, Loft, Lane Bryant, Dress Barn and Justice has said it plans to close at least 250 stores. Ascena said about 400 more will be shut if the company doesn't get rent concessions.
Earlier this year, Payless ShoeSource filed for bankruptcy protection and The Limited closed all 250 of its remaining stores.
Gymboree says some stores will be closed as part of the restructuring, but the timing of that and which shops will be closed have yet to be determined. It operates its namesake stores as well as Crazy 8 and Janie and Jack shops.
"We expect to move through this process quickly and emerge as a stronger organization that is better positioned in today's evolving retail landscape," CEO Daniel Griesemer said in a statement issued Sunday.
Gymboree says it has secured $308.5 million in financing to keep the company operating through the Chapter 11 process.
The company also announced that its chief financial officer, Andrew North, is stepping down. Liyuan Woo, a director at consulting firm AlixPartners, was named interim CFO while a replacement for North is sought.
Gymboree was taken private in 2010 when it was bought by private equity firm Bain Capital for $1.8 billion.