Gymboree has filed for Chapter 11 bankruptcy protection.
The children’s clothing retailer announced the move Monday morning, only a few weeks after it partnered with a turnaround firm, AlixPartners, to assist with its operations and then missed a June 1 debt payment.
A bankruptcy filing had been seen as imminent, with S&P Global lowering its corporate credit rating on the company to “D” from “CC.”
Gymboree also announced Monday the departure of Chief Financial Officer Andrew North, who is leaving for personal reasons.
“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 Omni-channel initiatives,” CEO Daniel Griesemer said in a statement. “We expect to move through this process quickly and emerge as a stronger organization that is better positioned in today’s evolving retail landscape.”
In conjunction with its latest filing with the Securities and Exchange Commission, Gymboree said it has secured commitments for up to $308.5 million in additional financing.
The Chapter 11 filing should reduce Gymboree’s debts by more than $900 million, the company added.
A director at AlixPartners, Liyuan Woo, will serve as interim CFO.
Kirkland & Ellis is the company’s legal counsel, AlixPartners is serving as its financial advisor and Lazard is its investment bank throughout this process.
Gymboree also said it expects to operate its overall business and the majority of its stores as usual during its financial restructuring.