Despite being over 30 years old, The Gymboree Corp. is still a retail toddler, stumbling periodically, learning quickly, and growing fast. The company sells clothes and accessories for kids in the US, Puerto Rico, Canada, and now Australia at about 630 Gymboree stores that carry colorful, fashionable playsuits and rompers for kids up to 12 years old. It also operates some 135 Janie and Jack (better newborn and toddler apparel) and 160-plus Gymboree Outlet stores and corresponding e-commerce sites. Its youngest chain is value-priced Crazy 8. The company also provides parent-child play programs (designed to enhance child development) for newborns to age five. Founded in 1976, Gymboree is owned by Bain Capital.
San Francisco-based Gymboree has about 1,250 stores in the US and more than 40 shops in Canada. It also has about a half a dozen locations in Australia, as well as stores in China, the Middle East, and South Korea.
The youngest and fastest growing of Gymboree's retail concepts is Crazy 8 (lauched in 2007), with more than 370 locations throughout the US. Crazy 8 stores offer discounted apparel in sizes ranging from newborn up to size 14. The chain's focus on value-priced apparel was a good fit for the thrifty times of the recent recession. The Gymboree and Janie and Jack retail concepts span the price-range of children's clothing; Janie and Jack sells higher-priced apparel than Gymboree stores, and the Gymboree Outlet shops sell lower-priced clothing.
Company-operated Gymboree Play & Music centers in the US and three dozen other countries contribute just 2% of sales. The Play & Music business also sells developmental toys, books, and music for young children.
Sales and Marketing
Gymboree reported advertising expenses, including costs related to direct mail campaigns, of $20.8 million in fiscal 2013, up from $18.6 million the prior year.
Gymboree's sales increased by 7% in fiscal 2013 (ended January) versus the prior year, to $1.28 billion, driven by a 6% increase in revenue from its retail stores operation. (Retail stores account for 96% of the company's sales.) Gymboree Play & Music's sales jumped 72% year over year. Despite the sales growth, the company was unprofitable in fiscal 2013, posting a $7.8 million loss.
Gymboree's private-equity parent paid a rich price for the chain's growth and strong sales: $1.8 billion ($64.50 per share), about 20% above its market value in late 2010.
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