Gymboree leaves bankruptcy behind and cuts debt by 900 million dollars

Earlier in September kidswear chain Gymboree Corp. won court approval to exit Chapter 11 bankruptcy protection with a plan to cut its debt by circa 1 billion dollars. By the end of the month, the company has confirmed its debt restructuring is well underway.

On September, 29 The Gymboree Corporation announced that it has successfully completed its financial restructuring and emerged from Chapter 11 as a new corporation under the name Gymboree Group, Inc. The children’s apparel retailer thus emerged from bankruptcy less than four-months after it filed for Chapter 11 protection.

The company had said earlier this month that its plan of reorganization had been confirmed by the U.S. Bankruptcy Court for the Eastern District of Virginia, and that it had expected to complete its financial restructuring by the end of September.

Gymboree exits bankruptcy in less than four months

When the company announced the bankruptcy on June, 11 it advanced that the recapitalization would reduce debt by 900 million dollars, and that the majority of stores would operate as usual. Fast-forward to late September and “With the support of its creditors and stakeholders, Gymboree Group has substantially improved its financial position and established a sustainable capital structure by eliminating more than 900 million dollars of debt from its balance sheet and right-sizing its store footprint.”

Gymboree Group's new competitive financial and operating structure will allow the company to invest in and grow the business over the long term.

In terms of financials, the company has counted on the backing of Goldman Sachs, which has granted the apparel retailer an 85 million dollars new term loan. Likewise, the company now has access to a 200 million dollar revolving credit facility from Bank of America Merrill Lynch and Citizens.

Gymboree Group's pre-petition term loan lenders – including Searchlight, Apollo Global Management, Oppenheimerfunds, Brigade Capital Management, LP, Marblegate, Nomura Securities International and Tricadia Capital Management, LLC – are the Company's new owners.

"Today marks a new beginning for Gymboree Group as we emerge as a stronger and agiler competitor in the children's apparel market," said Daniel Griesemer, President and CEO of Gymboree Group.

"With the support of our new equity owners, this process has allowed us to secure the Company's long-term financial health, and we are excited about the opportunities ahead as we turn our full focus toward executing our strategic Product, Brand and Omni-channel initiatives. I want to thank our exceptional team at Gymboree Group for their dedication and continued focus throughout this process. Looking ahead, our talented employees will continue to drive our success as we deliver for our customers and put them at the center of everything we do. We are also grateful for the support of our vendors and partners during this process, and we look forward to working together well into the future."

Image:Gymboree Web