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Gymboree Files For Bankruptcy Again

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Children's clothing retailer Gymboree Group, Inc. has again filed for Chapter 11 bankruptcy protection, the second time in nearly two years. The company will close more than 800 Gymboree and Crazy 8 stores in the U.S. and Canada.

The San Francisco-based retailer said that along with its U.S. subsidiaries, it has filed a petition in the U.S. Bankruptcy Court for the Eastern District of Virginia. Gymboree Play & Music, a separate entity, is not included in the court proceedings.

The company's Canadian subsidiary, Gymboree, Inc., intends to seek bankruptcy protection in the Ontario Superior Court of Justice.

Gymboree plans to use these proceedings to wind-down of all of its Gymboree and Crazy 8 store locations and operations, while continuing to pursue a going-concern sale of its high-end Janie and Jack business as well as a sale of the intellectual property and online platform for Gymboree.

Gymboree had earlier filed for bankruptcy protection in June 2017. At that time, the company closed a portion of its stores and saw lenders take control of the business.

The company has entered into an asset purchase agreement with Special Situations Investing Group, Inc. or SSIG, an affiliate of Goldman Sachs & Co. LLC. SSIG will serve as the stalking-horse bidder in a court-supervised sale process for Janie and Jack.

Gymboree expects to conduct an auction by February 25, 2019, pursuant to bid procedures to be approved by the court.

Gymboree has received a commitment for $30 million debtor-in-possession financing from SSIG and Goldman Sachs Specialty Lending Holdings Inc, and a "roll up" of all of Gymboree's obligations under the pre-petition Term Loan Credit Agreement for an amount not less than $89 million.

If approved by the court, the company expects the financing package to support its operations during these proceedings.

The company has sought authorization from the court to continue to honor customer gift cards for 30 days. It has discontinued its GymBucks and Gymboree Rewards programs with immediate effect.

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