To unburden some of its debt, Gymboree has filed for Chapter 11 bankruptcy protection and will reportedly close more than 375 of its stores.
The struggling retailer partnered with AlixPartners just a few weeks ago to help turn its business around, CNBC reports, but missed a June 1 debt payment. The company has now filed for bankruptcy with the hope of reducing its debt by more than $900 million. Gymboree Chief Financial Officer Andrew North also announced his leave, citing personal reasons.
Director Liyuan Woo of AlixPartners will take over as Interim Chief Financial Officer as the company searches for a permanent replacement for North, Gymboree said in a statement.
“The steps we are taking today allow the company to definitely address its debt and enable the management team to turn its full focus toward executing our key strategies, including our product, brand and omni channel initiatives,” said Daniel Griesemer, President and CEO of Gymboree.
The retailer has been struggling financially for some time: As Fortune previously reported, Gymboree owes more than $1 billion and holds little cash. The large amount of debt is largely why Chief Executive Officer Mark Breitbard stepped down in January, less than six months ago.
Like most other retail stores, Gymboree has been struggling with weak sales and declining profit margins as more customers move to make their purchases online rather than in-store. In the second quarter of 2017 alone, sales fell 5% and Gymboree faced a net loss of $324.9 million, according to the company’s earnings report.