The US childrens wear retailer is valued at US$1.8bn

The US children's wear retailer is valued at US$1.8bn

This week it emerged that private equity firm Bain Capital has agreed to buy US children's wear retailer Gymboree in a deal worth US$1.8bn.

Bain will pay a 57.4% premium to the company's share price on 30 September, before recent market rumours of a transaction, to snap up the children's wear retailer.

San Francisco-based Gymboree booked a 0.8% rise in second quarter profit in August, despite a 3% decline in same-store sales.

The retailer is expanding into the Middle East after signing its first retail franchise agreement with Azadea G Group in Dubai earlier this year. It follows 9% profit growth during fiscal 2009, with earnings reaching US$101.9m despite the downturn.

"Gymboree is a terrific company with incredible brand strength and a large population of extremely satisfied customers," said Jordan Hitch, a managing director at Bain Capital. "We look forward to working with Matthew McCauley and the company's proven and experienced management team."

If the tender offer is successfully completed, Gymboree expects the transaction to close by year end.

Company snapshot

  • The Gymboree Corporation sells apparel and accessories for children under the Gymboree, Gymboree Outlet, Janie and Jack, and Crazy 8 brands. It also has play programmes for children under the Gymboree Play and Music brand;
  • Gymboree's history begins with the founding of Gymboree Play & Music in 1976, entering the apparel business - designing, manufacturing and retailing unique, high-quality merchandise for children ages newborn to nine - in 1986;
  • The retailer's clothes are now available in sizes newborn to 12 years;
  • Gymboree currently operates more than 630 stores in the US and Canada, as well as an e-commerce store in the US;
  • There are approximately 140 Gymboree Outlet stores open, and 120 Janie and Jack shops throughout the country.