Retailer Gabe’s in Talks to Give Keys to Lenders, Get More Cash

Warburg Pincus-backed Gabe’s is closing in on a debt deal that would hand over control of the discount retailer to some of its lenders, according to people familiar with the situation.

The cash-strapped chain and its creditors have been ironing out details of an out-of-court plan that would help shore up its cash reserves, said the people, who asked not to be identified discussing private negotiations. Gabe’s has also been looking to cut deals with various landlords and vendors to help bring down expenses, said other people familiar with the matter.

A critical element of the company’s plan ...