US-based children’s apparel retail chain Gymboree Group, which emerged from bankruptcy in September last year, is reportedly considering the closure of more than 50% of its 900 stores.
Gymboree has appointed consulting firm Berkley Research Group to explore multiple options, including store closures and a second bankruptcy filing, Reuters reported, citing undisclosed sources.
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According to the sources, Berkley Research will also assist the retailer in reducing costs and analysing mall-based leases.
The speciality retailer is now owned by its former lenders, including Searchlight Capital Partners and Brigade Capital Management. Private equity firm Apollo Global Management also has a stake in the company.
Gymboree Group operates multiple brands, including Gymboree, Janie and Jack, and Crazy 8.
The retailer, which has stores in the US, Puerto Rico and Canada, filed for Chapter 11 bankruptcy protection in June last year as part of restructuring and recapitalisation process.
The move was aimed at reducing the company’s debt by more than $900m and was accompanied by closure and liquidation of 330 underperforming stores.
After emerging from bankruptcy, the company had an $85m term loan and a $200m revolving credit line.
Gymboree managed to escape liquidation in a wave of bankruptcies that plagued the offline retail sector due to cut-throat competition from e-commerce players.
Since the beginning of last year, more than 20 retailers, including Sears Holdings and Toys R Us, have filed for bankruptcy, according to Reuters.
The news agency added that footfalls at physical retail stores plunged during the shopping period right after last week’s US Thanksgiving holiday, with a growing number of consumers choosing to buy goods online.
