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Retail roundup: Gymboree, Shopko file for bankruptcy, Sears gets saved

If early signs are any future indication, it's going to be a difficult year for brick-and-mortar retailers.

Children's clothing company Gymboree has filed for bankruptcy for the second time in 18 months and will close over 800 locations. The San Francisco-based company operates about 380 Gymboree stores, 164 Gymboree Outlet stores and 265 stores affiliated with its "Crazy 8" brand. As part of the latest agreement, the company is set to sell its intellectual property, the online Gymboree platform and its higher-end Janie and Jack retail brand to an affiliate of Goldman Sachs if no better offer emerges.

As with many PE-backed retailers, Gymboree struggled in large part because of too much debt and changing consumer habits that favored online shopping. And the downfall came under Bain Capital's watch.

The firm originally took Gymboree private for some $1.8 billion in 2010, including $524 million in equity. Seven years later, Gymboree filed for Chapter 11 in an effort to trim its debt load by more than $900 million. The company emerged from bankruptcy four months later, with lenders including Apollo Global Management, Oppenheimerfunds, Searchlight Capital Partners and others taking over. But it couldn't pull off a complete turnaround and will now join the likes of RadioShack, Bon-Ton stores, Toys R Us and others that have liquidated. 

The news was only slightly better for Shopko, a general merchandise retailer with locations in the US scattered across the West Coast and Midwest. The company has also filed for Chapter 11 bankruptcy, citing assets of less than $1 billion and debt between $1 billion and $10 billion. The caveat: It has no immediate plans to liquidate completely thanks to a $480 million debtor-in-possession financing agreement led by Wells Fargo. But the Green Bay, WI-based business will nonetheless close 105 stores, relocate 20 optical centers and auction off its pharmacy business. 

Sun Capital Partners, a private equity shop based in Boca Raton, FL, acquired Shopko for about $1.1 billion in 2005. The company reportedly has until March 14 to emerge from bankruptcy.

Meanwhile, Sears has confirmed that it will avoid liquidation after chairman Eddie Lampert prevailed in a bankruptcy auction with an improved takeover bid of some $5.2 billion from Lampert's hedge fund, ESL Investments. Struck after weeks of negotiations, the deal will reportedly keep as many as 45,000 employees from losing their jobs and allow 425 stores in the US to remain open.

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