![]() All content of the Dow Jones branded indices Copyright S&P Dow Jones Indices LLC and/or its affiliates. Standard & Poor’s and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Chicago Mercantile: Certain market data is the property of Chicago Mercantile Exchange Inc. US market indices are shown in real time, except for the S&P 500 which is refreshed every two minutes. Your CNN account Log in to your CNN account ![]() It’s a cautionary tale for those hoping that Sears Holdings, the owner of Sears and Kmart, will be able to survive long term by shedding debt and closing stores in its current bankruptcy.Ĭhairman and former CEO Eddie Lampert insists that his bid for the operating assets of Sears will allow it to emerge as a smaller, profitable and more competitive company, but other experts believe that the company’s stores are poorly positioned to compete long-term. That’s what happened recently with RadioShack. In fact it is common for retailers who try to use bankruptcy to reorganize to end up with a second, final trip to bankruptcy court in relatively short order. The problems that led to Wednesday’s bankruptcy and shutdown announcement are not unique to Gymboree. But the expansion didn’t work out as planned, and it laid the groundwork for the first bankruptcy. After that deal it tried to rapidly expand, growing to 1,300 stores globally and expanding into China, South Korea, Australia and parts of Latin America. Then it was purchased by private equity firm Bain Capital in 2010 for $1.8 billion. It enjoyed slow, steady growth, adding 78 stores in the next five years and 275 in the five years that followed that. Gymboree started in 1986 with two stores in California. The growth of online sales hurt Gymboree, just like it has for many traditional brick-and-mortar retailers.īut Gymboree’s filing said it was also losing to traditional retailers including Children’s Place and The Gap, as well as lower price stores such as TJ Maxx and big box competitors. ![]() But it couldn’t find anyone interested in either buying or investing in the company. In December it announced plans to close less profitable stores and seek a buyer or other other financing to keep the Gymboree and Crazy 8 brands alive. Poorer than expected sales also led to deep discounts on merchandise, which added to its problems. It completed a reorganization by September of that year.īut in its most recent bankruptcy filing on Thursday, the company said that “the unanticipated degree of decline of the brick-and-mortar retail industry, among other factors, has made it increasingly difficult … to support their cost and capital structure.” It reached a deal with almost all of its lenders to shed about $1 billion in debt in that bankrutpcy and got an infusion of $115 million in new cash, according to. The company filed for bankruptcy the first time in June of 2017 and was able to emerge fairly quickly. That business was sold by Gymboree’s holding company in 2016. The bankruptcy does not affect Gymboree Play & Music, a chain of more than 730 centers that offer play, music and art classes. The company has 11,000 part-time and full-time employees. But the 534 stores that use Gymboree name are all slated to close, as are all 264 Crazy 8 stores. The filing does not specify if all of them will be kept open. A unit of Goldman Sachs has already agreed to be a bidder. The company’s Janie and Jack stores, a more upscale brand, are expected to be sold through bankruptcy court auction next month. Hedge funds have killed Sears and many other retailers Richard Lautens/Toronto Star via Getty Images
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