Children's clothing chain Gymboree has filed for bankruptcy protection in the United States, aiming to slash its debts and close hundreds of stores amid crushing pressure on retailers.
Gymboree said it shall remain in business but will close 375 to 450 of its 1,281 stores in filing for a Chapter 11 bankruptcy reorganization. Gymboree employs more than 11,000 people.
The bankruptcy was widely expected after Gymboree refused to pay some of its bills in recent months, placing the retailer on a collision course with creditors. The retailer said in its filing late Sunday that it hopes to slash $1 billion of its $1.4 billion in debt and to win approval for its plan by late September.
Like other retailers, Gymboree buckled amid declining mall traffic, fixed rental costs and online competition. Other mall retailers that have recently succumbed to bankruptcy filings include Payless ShoeSource, Rue21 and The Limited.
Among other shortcomings, Gymboree failed to innovate quickly, having only recently introduced store email, analytics and tablet computers to help employees do their jobs.
The turmoil also resulted in recent leadership changes. The company's CEO since 2013, Mark Breitbard, resigned April 3. His permanent replacement, Daniel Griesemer, was appointed May 22.
The bankruptcy represents a bitter outcome for Gymboree owner Bain Capital Private Equity, which acquired the retailer for $1.8 billion in 2010 and launched a major global expansion.