Gymboree and seven affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Eastern District of Virginia, lead case number 17-32986. The Company, which operates as a children’s apparel specialty retailer, is represented by Michael A. Condyles of Kutak Rock. The Company concurrently announced that it has signed a restructuring support agreement (RSA) with a majority of its term loan lenders, securing critical stakeholder support for a comprehensive financial restructuring and recapitalization of the Company that will reduce Gymboree’s debt by more than $900 million.
Daniel Griesemer, president and C.E.O. of Gymboree, comments, “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….We expect to move through this process quickly and emerge as a stronger organization that is better positioned in today’s evolving retail landscape, with the right size store footprint and greater financial flexibility to invest in Gymboree’s long-term growth.”
The Company has secured commitments for $35 million in new-money debtor-in-possession financing from a majority of its existing term loan lenders and up to $273.5 million in additional financing from the existing lenders under Gymboree’s asset-backed loan credit facilities which, in addition to Gymboree’s ongoing cash flow, will ensure the Company is able to continue meeting its financial obligations throughout the Chapter 11 case.
Additionally, Gymboree announced that Andrew North is stepping down as C.F.O. for personal reasons. North will remain with the Company for a period of time as a consultant. Liyuan Woo, a director at AlixPartners, has been appointed as interim C.F.O. while the Company searches for a permanent replacement. James A. Mesterharm, a managing director and co-lead of Turnaround & Restructuring Services at AlixPartners, has been appointed as C.R.O.
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