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Less than a year after her exit from bankruptcy protection, Gymboree has a plan that she hopes to recover in the good graces of consumers in the highly thought-out children's clothing market .
June 2017, think that better quality products and products that lend themselves to blending and matching, rather than constituting one set, will help to get in shape.
At the time of the bankruptcy, Gymboree Group, which also includes Janie and Jack and Crazy 8 channels, were choking on a debt of $ 1.34 billion, roughly equal to its annual sales volume, resulting from the bankruptcy. a leveraged buyback in 2010 by private equity firm Bain Capital. This handcuffed Gymboree was trying to follow the competitors in terms of store modernization, supply chain improvement and e-commerce growth.
In addition, the goods of Gymboree have become obsolete and out of date, concedes CEO Daniel Griesemer, who made the decision. reinstates shortly before Chapter 11 is filed.
"Millennium parents want quality, diversity, high aesthetics," Griesemer said in an interview Monday Fortune offices . "This modern parent has learned to shop at H & M, Zara and Forever 21, a completely different way of collecting disparate pieces and creating their own look." Griesemer also wants to reduce the importance of updating with better quality and a more selective badortment. 19659002] During its bankruptcy, the company closed 360 stores, leaving it with 940 remaining through its different banners now. This includes some 380 Gymboree locations in the United States and Canada. With fewer stores to manage and less debt to repay, Gymboree saved $ 900 million during its restructuring. The company has more money to modernize its stores, including a new prototype unveiled in Manhattan and Torrance California
. The company is also investing in an enhanced e-commerce site and is launching a mobile shopping app, features that are essential for any retailer.
Still, Gymboree is facing a childrens clothing market as competitive as ever. The Children's Place (plce) is doing good business. Target (tgt) is enjoying tremendous success with its Cat & Jack line of childrenswear, while Walmart (wmt) has significantly improved its own fashion offerings. Department stores such as J.C. Penney (JCP) and Kohl's (kss) also put a lot of effort into their home brands and despite this see poor results. Griesemer, a former senior executive at Gap Inc (gps), is also facing fierce competition from his alma mater's The Gap and Old Navy channels.
In addition, few retailers are out of bankruptcy protection. Think about Borders, Toys' R & # 39; Us and The Sports Authority
But as a private company, owned by former lenders like Oppenheimer, Searchlight Capital and Brigade Capital, among others, Gymboree will have at least more breath than would get as a corporation publicly traded, spared from quarterly reports. Indeed, Griesemer would not say if Gymboree's comparable sales were up or down. Griesemer says the owners of Gymboree understand the need for patience.
"The turnaround of a brand takes a lot of time, it's not something that happens overnight," he said. "We have owners who recognize it."
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