The Gymboree LBO
Deal Summary
Childrens clothes retailer Gymboree Corp. agreed to be bought by Bain Capital LLC for $1.8 billion, a price that signals the private- rectitude firms willingness to pay a premium for a note that has a loyal following. It also reflects growing private equity interest in the slowly recovering US retail sector. The deal, for $65.40 a share, represents a 23.5 percent premium over Gymborees Friday closing price, and a 57.4 percent premium over the telephoners stock price on Sept. 30 beforehand reports of a possible sale began to emerge.
Gymboree, which was founded in 1976 and went public in 1993, operates 1,037 stores in the United States, Canada, Puerto Rico and Australia under four brands: Gymboree, Gymboree Outlet, Janie and Jack, and barbaric 8. It focused on toddlers and children under 12. It also had a net income of mostly franchised childrens play locations, spanning some 30 countries outside the US.
Part of Gymborees allure is that beyond having the kind of relaxation sheet that makes it an appealing acquisition, Gymboree continues to have a path to expansion. It undecided its first Crazy 8 store, a more value-oriented childrens habiliments chain, in August 2007, and now has 133 stores nationwide.
Whats more, agree to Jordan Hitch, managing director at Bain, it was attracted to Gymboree because of its incredible brand strength and a large population of extremely satisfied customers.
Another priming why Bain wanted to buy Gymboree is that Gymboree has performed reasonably well notwithstanding the recession: annual sales have stayed flat for the olden two years, at around $1 billion. Childrens apparel consumption has weathered the recession much better than other clothing categories, because parents will eliminate spending on themselves before they brush aside back on their kids. Childrens apparel is more predictable than teen apparel because its less influenced by fashion, and in recessionary times, parents tend to...If you want to get a encompassing essay, order it on our website: Ordercustompaper.com
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