Children’s clothing retailer Gymboree is expected to file for bankruptcy in the coming weeks or even days, after it elected not to make an interest payment on $171 million of bonds that was due on Thursday, MarketWatch.com reported on Saturday. The troubled company, which has been in talks with investment banks and advisers on ways to repair its balance sheet since January, has a three-day grace period before it is officially in default. But it’s expected to announce some kind of prearranged or pre-packaged filing in the near term that will allow it to proceed in an orderly fashion, said Reshmi Basu, associate editor of restructuring at Debtwire. Like rivals, Gymboree has been suffering from the many factors currently clobbering the retail sector, from weak mall traffic trends to changing consumer behavior to the onslaught from Amazon.com Inc. The rise of e-commerce is forcing many to invest heavily in their own online and delivery technology, at a time when sales are under pressure. Gymboree is expected to keep its Janie & Jack line, which is still successful, but to ditch its Crazy 8 brand, which is flailing, said Basu. The company is in talks to retain Great American Group and Tiger Group, two companies that specialize in asset appraisals, liquidations and inventory auctions, she said.
