Bain Capital in 2010 outbid others including Apollo Global Management LLC to acquire the company for the hefty sum of $1.7 billion. Seven years later, on the eve of a bankruptcy filing that could come from Gymboree as soon as June, Bain executives seem reluctant to give up on their big bet, Bloomberg News reported yesterday. They’ve snatched up Gymboree bonds as a way to retain a strong position in any revival. And just last week the company named a new chief executive officer with deep retail experience, who is charged with formulating a turnaround strategy. Read more.
In a related commentary yesterday on RetailDive.com, Gymboree is nearing a deadline on its $1 billion debt load, which could lead to a death spiral if it can't score a lifeline fast, according to a commentary yesterday on RetailDive.com. In many ways, Gymboree’s woes reflect those of the broader market: declining mall traffic, shifts in consumer spending away from material goods and toward services and experiences, e-commerce’s rapid absorption of market share, and growing competition from fast fashion, off-price and everyone else. Now add a massive pile of debt to the equation: Gymboree's more than $1 billion of debt — much of it stemming from private equity group Bain Capital’s leveraged buyout of the retailers in 2010 — has turned a sales drought into an existential crisis. With a multimillion dollar payment due June 1 and many hundreds of millions in principal due next year, the company has few options left but to restructure its debt and operations — if its creditors agree to a deal. Read more.
