BOSTON-The San Francisco-based Gymboree Corp. spelled out more details on Crazy 8, the new concept it will launch this August, during the CIBC World Markets Consumer Growth Conference here at the Four Seasons Hotel on July 11. Crazy 8, the company’s third concept, targets the broader-based mass market with children’s clothing priced approximately 30% below pricing at its flagship Gymboree units.

Crazy 8′s market is “the customer that values great fashion, but at a price,” said Matthew McCauley, chairman and CEO. He acknowledged that this market has much competition, but said a primary Crazy 8 differentiator would be the store’s environment.

“Most of the competition offers a value-type experience, with concrete floors. We see an opportunity not to talk down to the customer, many of whom don’t necessarily have a lower income, but value different things and know children will grow out of the products. We want the customer to expect Ralph Lauren and be wow’d by the price. We want to beat the competition on quality rather than on price,” he said.

In addition to lower prices, Crazy 8 will begin with added emphasis on boys and also reach to kids who are a little older. While Gymboree carries sizes from zero to 12, Crazy 8 will go up to size 14.

As for boys, McCauley said, “boys is the fastest growing business at Gymboree, and we see more opportunity there.” Crazy 8 babies clothing “will have a little sense of humor,” he added. “We think these moms appreciate that.”

The company will open a minimum of 10, and may open as many as 20 Crazy 8 units this year, beginning in August. They will be clustered in four markets: Northern and Southern California, Houston and the Northeast, and will have a footprint of approximately 2,500 sf, which is about 600 sf larger than the typical Gymboree unit.

Some will be near existing Gymboree stores, “because we want to quantify their degree of cannibalization from the start,” he said. “The others will be where there are no Gymborees.” The latter, he explained, allows the company to hedge its bets through the ability to turn the units into Gymborees if the concept does not go as well as planned. Yet, “we believe the (Crazy 8) store count could be bigger than Gymboree if things go well.”

The name derives, McCauley said, “from the crazy lives our customers lead eight days a week. We want to offer clothing for their children from 8 a.m., when they wake up, until 8 p.m., when they go to bed.” The launch will be accompanied by a website that offers eCommerce. “We’re building a brand, and investing in advertising and PR,” McCauley added.

The company began with Gymboree Play & Music early childhood development centers 30 years ago and expanded to Gymboree upscale retail apparel. It moved into the kids’ luxury apparel market in 2002 with the launch of Janie and Jack and also later opened Gymboree Outlets, which carry reproductions of Gymboree’s best-sellers from the previous year at a 30% discount.

As of this June 2, the company operated 583 Gymboree units in the US and Canada, 63 Gymboree Outlets, and 82 Janie and Jack shops in the US. It also operates online stores for both Gymboree and Janie and Jack and parent-and-child developmental play programs at 544 franchised and company-operated centers in the US and 30 additional countries.

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