Gymboree Latest Retailer to Go Bankrupt

By Douglas A. McIntyre Updated Jan 11, 12:30PM EST · Published Jan 16, 12:17PM EST

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Gymboree Latest Retailer to Go Bankrupt — © FatCamera / Getty Images

Children’s clothing company Gymboree Group Inc will follow several other retailers into Chapter 11, just as Sears decides whether to liquidate its inventory and shutter altogether. It would be the second time in two years that Gymboree will file for Chapter 11.

According to The Wall Street Journal, the company is expected to liquidate all 800 stores under its flagship brand. Two other divisions — Janie and Jack and Crazy 8 — might survive, or they could join Gymboree in liquidation. The Wall Street Journal reports that the current owners of the chains are Carriage House Capital Advisors, Brigade Capital Management and Oppenheimer Funds.

The list of retailers that have chosen Chapter 11 gets longer by the year. Among others that have gone into bankruptcy and often liquidation are Circuit City, KB Toys, Borders, Linens ‘N Things and Sports Authority. L Brands Inc. (NYSE: LB) recently close all of its Henri Bendel stores, a total of 23, and also shut down its online business. Radio Shack, once one of the largest retailers in the country based on store count, went bankrupt a year ago.

The move toward Chapter 11 and liquidation is so pervasive that in December 2017, credit research firm S&P listed 15 companies in the industry that might declare bankruptcy or close entirely. These included Bon-Ton, J. Crew, PetSmart and David’s Bridal. Moody’s did a similar analysis for USA Today in December 2017. It listed 26 retailers and apparel companies, including Neiman Marcus, GNC, Nine West, Toms shoes and Cole Haan. Among almost all lists of the largest retailers that may go under is J.C. Penney Inc. (NYSE: JCP). Its new CEO recently closed three stores and said she would look at the entire portfolio of locations.

Bankruptcies are not the only sign of trouble. Some retailers are slashing the numbers of their stores. Gap Inc. (NYSE: GPS), the owner of Gap, Banana Republic and Old Navy, has shut down hundreds of stores in the past three years.

Retailers close their doors for two primary reasons. The first is debt levels. This was, according to management and retail experts, what happened to Toys “R” Us. The other is that direct competition is too great. J.C. Penney falls into this category as its struggles against Macy’s, Target and Walmart. Every retailer in the country has to deal with e-commerce giant Amazon.com, which has made it hard for retailers to do well online.

Gymboree is the latest retailer to close. It will not be the last.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.