Gymboree, which has stores in Massachusetts, recently filed for bankruptcy. This retailer of children’s clothing specifically filed for Chapter 11 bankruptcy. The move comes just a few weeks following its partnering with AlixPartners, a turnaround firm. Gymboree partnered with AlixPartners to receive help with its operations along with a debt payment it missed in early June.
The company announced its Chapter 11 bankruptcy filing on a Monday. According to company officials, the filing will allow the company to address the debt it has. It is also expected to help the management team to focus more on executing the company’s key strategies.
The bankruptcy filing should decrease the company’s debts by over $900 million. In addition, it will close about 375 out of its 1,300 stores, and the stores that will remain open should be able to operate normally during the financial restructuring. Gymboree officials said they expected to get through the bankruptcy filing process relatively quickly. Through this process, officials are hoping that the organization will become stronger and be able to withstand the current retail environment.
Sometimes economic issues are inevitable, and unfortunately, businesses can become victims of these problems. Fortunately, through Chapter 11 bankruptcy protection, struggling businesses have the opportunity to put a halt to aggressive collections activities. They might even be able to temporarily avoid making certain installment debt payments. An attorney in Massachusetts can help companies facing debt issues to reorganize their debts and pay them back according to newly created repayment plans, thus putting them in better positions to thrive financially in the years ahead.
Source:Â CNBC, “Gymboree files for Chapter 11 bankruptcy; CFO leaves retailer“, Lauren Thomas, June 12, 2017