Gymboree Plans Outlets

Matt McCauley, president of Gymboree, cited the outlet store growth figure in his remarks at the conference. The outlets represent "an untapped market for us," McCauley said, adding that the company's target is to open 15 of the outlets by the end of the year.

"The model here is taking successes from previous years and reproducing them and selling them in outlet mall locations at roughly 25% less than in retail stores," McCauley said. Ultimately Gymboree should be able to achieve margins similar to those that it posts in its retail stores, McCauley said.

McCauley and Blair Lambert, chief operating officer, reviewed the company's three brands and outlined plans for growth as well as for improving margins.Gymboree Corp. operates 648 stores, of which 572 are Gymboree locations, 60 are Janie and Jack retail shops and 16 are Janeville stores.

McCauley described Janie and Jack, which was launched in 2002, as a "luxury boutique children's store." The company initially anticipated that the Janie and Jack chain would appeal to customers buying gifts for others, but the stores are also generating a substantial volume of sales to those who are buying for themselves, he said.

The Gymboree brand "is more playful and fun and whimsical and sometimes quirky," according to McCauley, while Janie and Jack "is a bit more European in flavor" and is focused on a sleek look. The Janie and Jack shops feature an old mercantile boutique style with special details such as wainscotting and distressed wooden armoires. Gymboree expects to expand the chain by 11 new locations by the end of 2005, for a total of 64 after the expansion.

Janeville is the company's newest retail concept, selling clothing and accessories for women in their mid-30s and older. The Janeville store count is 16. The company also operates Gymboree Play & Music, a parent-child developmental play program, at 515 franchised and company-owned locations around the world.