Gymboree granted final approval of DIP financing, store-closing sales

By Caroline Salls

Pittsburgh, July 11 – Gymboree Corp. secured final court approval to access its debtor-in-possession financing and hold closing sales at up to 450 of its stores, according to orders filed Tuesday with the U.S. Bankruptcy Court for the Eastern District of Virginia.

As previously reported, the DIP financing package includes a $105 million term loan facility, which is comprised of a $35 million new-money facility and $70 million of roll-up term loans, and up to $273.45 million of additional DIP financing from the existing lenders under its ABL credit facilities.

Gymboree said the DIP financing, in addition to ongoing cash flow, will ensure it is able to continue meeting its financial obligations throughout the Chapter 11 case.

Bank of America, NA is the agent for the DIP ABL facility, and Credit Suisse AG, Cayman Islands Branch is the agent for the DIP term loan.

The ABL facility will mature on an unspecified date in December, and the term loan facility is set to mature on Dec. 11.

ABL loans will bear interest at either the Prime rate plus 1,000 basis points or the ABL term loan rate plus 1,100 bps. New-money term loans will bear interest at either the base rate plus 1,100 bps or Libor plus 1,200 bps, and roll-up loans will accrue interest at either the base rate plus 250 bps or Libor plus 350 bps.

In its store-closing sale motion, Gymboree said it would hold closing sales at up to 450 of its stores, contingent on lease negotiations.

Tiger Capital Group, LLC and Great American Group, LLC will conduct the store-closing sales, which were scheduled to begin on July 1.

Gymboree said it expects that the bulk of the sales and store closings will continue through the end of September. The company said it plans to keep 70 to 85 of the closing stores open through January 2018.

The sales are expected to yield $65 million to $85 million of proceeds.

Gymboree, a children’s apparel specialty retailer based in San Francisco, filed bankruptcy on June 11. The Chapter 11 case number is 17-32986.

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