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January 7, 2019

Gymboree Group warns of more store closures

By Hannah Abdulla

US children’s apparel retailer Gymboree Group has warned more store closures for its Gymboree and Crazy 8 chains can be expected over the course of the year, as reports continue to circulate it is gearing up for a second bankruptcy filing in under two years.

In early December the group said it was exploring options for the brands that will result in a closure of all Crazy 8 stores and a “significant” reduction in the number of Gymboree stores in 2019. It is also exploring options for its Janie and Jack brand.

“There can be no assurance that the company’s strategic review process for any of its brands will result in a sale transaction or other strategic alternative of any kind,” the company said, adding it has not fixed a timetable for completion of the review.

Shaz Kahng, appointed as CEO in November, said the process is “designed to reposition the company for success by establishing a brand portfolio and store footprint that is optimised for the current retail environment. These strategic initiatives are an important next step as we continue to look for ways to unlock additional value in our brands. We are optimistic about our future as a more streamlined organisation that can deliver enhanced, long-term value to its stakeholders.”

According to The Wall Street Journal, citing “people familiar with the matter” at the end of December, the children’s wear retailer is preparing to file for its second Chapter 11 bankruptcy in under two years.

In September 2017 a reorganisation plan for the company, which involved the closure of 350 of its Gymboree and Crazy 8 brand stores, received court approval, following its filing for voluntary Chapter 11 Bankruptcy protection in June.

Gymboree Group did not respond to requests for comment at the time of press.

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