Gymboree Group Inc. will shut down after going bankrupt a second time, the victim of falling mall traffic and cheaper online sources of kids clothing. About 10,000 people could lose their jobs.

The retailer filed for protection from creditors owed about $212 million in U.S. Bankruptcy Court for the Eastern District of Virginia, according to a statement late Jan. 16. The San Francisco-based company, which operates 945 stores under three brands in the U.S. and Canada, plans to close its Gymboree and Crazy 8 chains after failing to find anyone willing to buy them, court papers show. A unit of...