Kids' clothier Gymboree is getting back in the brick-and-mortar game, joining several other U.S. retailers that are reopening stores in bids to revive and once again build out their real estate.
Gymboree, a brand owned by Secaucus, New Jersey-based The Children's Place, this week debuted a store at Westfield Garden State Plaza in Paramus, New Jersey. Gymboree closed all its children's apparel stores after filing for bankruptcy in 2019 for a second time. And more Gymboree retail locations are planned, according to company officials.
“This is more than a store launch; it’s the beginning of a bright new chapter for Gymboree,” Claudia Lima-Guinehut, brand president, said in a statement. “The new Gymboree space is brimming with joy, holiday magic and styles families have come to know and love. Our hope is to bring this beloved brand back in a stronger, more dynamic way.”
The Children's Place declined to comment. But in its announcement, it described the Gymboree opening as an "iconic brand" making "a celebrated return to brick-and-mortar, embracing a new era." The company has also said it is renewing its focus on stores.
Several retailers whose store fleets were shut down as part of Chapter 11 bankruptcy liquidations have mounted comebacks, rolling out physical locations under their new ownership. New York-based WHP Global has resurrected both Toys R Us and Babies R Us, with stores in places such as the American Dream megamall in East Rutherford, New Jersey. Utah-based Beyond has struck a deal with Kirkland's for that home goods chain to open standalone Bed Bath & Beyond stores.
But not every attempt at a revival has succeeded. The company that reopened nearly a dozen buybuy Baby stores last month announced it was pulling the plug on those brick-and-mortar sites at the end of the year. And at least one retail analyst warned that competition among kids' clothing retailers is fierce.
2019 retail Armageddon
The demise of the Gymboree chain was part of a slew of store closings and bankruptcies in 2019. In March of that year, The Children's Place, the biggest pure-play children's specialty apparel retailer in North America, paid $76 million to acquire the intellectual property and related assets — including trademarks, domain names, design rights and customer databases — of Gymboree and its sister company Crazy 8. There had been a liquidation of roughly 800 Gymboree and Crazy 8 stores.
In January 2020, The Children's Place relaunched Gymboree, with its own website and "store-in-store" areas within some Children's Place brick-and-mortar locations. Children's Pace has been significantly downsizing its fleet and now has roughly 500 namesake stores, which occupy 2.5 million square feet, in the United States and Canada.
"The Gymboree stores were highly sought out by malls in the 1980s, 1990s and throughout the 2000s. Then in 2010, Bain Capital acquired the chain and tried to expand them throughout Australia, Asia and Latin America. I think the company had almost 1,300 locations before trouble set in. The chain started closing stores, and in 2017 filed for bankruptcy," Rudolph Milian, president and CEO of retail consultant Woodcliff Realty Advisors, said in an email to CoStar News
The second Chapter 11 filing came in January 2019.
Fewer US children
"I think that reviving the Gymboree branded store is a good idea, and if the company expands the brand selectively at good locations, it will do well," Milian added. "However, the company has to be very selective in planning the growth of the brand because there in no boom in the children population this decade."
At 73.1 million, the number of U.S. children in 2020 was 1.1 million fewer than in 2010, when the number of children was 74.2 million, according to Milian, citing census figures. But he noted that won't be Gymboree's only challenge.
"Today, there is great competition for children’s apparel, as many parents buy online without the need to try out the clothing at brick-and-mortar locations as adults tend to do," he said. "So the children’s apparel category does not have to be sold at physical locations to thrive. I’m saying this only to suggest that Gymboree-branded stores can open successfully but not to the extent of store locations it [previously] operated."
In advance of the Gymboree store debut, earlier this month The Children's Place appointed Philip Ende as its head of real estate. He joins the retailer from the real estate consulting firm Ende Real Estate Advisors, where he was founder and president. Before that, Ende worked for over 27 years at giant mall landlord Simon Property Group, eventually holding the position of senior vice president, leasing premium outlets.
"We are excited for Philip to lead the real estate team and leverage his decades of experience in the real estate industry to assist the company in strengthening our relationships with landlords and driving our continued investment in our real estate portfolio," Muhammad Umair, Children's Place president and interim CEO, said in a statement on the hire. "This is another step in the company’s renewed focus on stores as a critical piece of our omnichannel strategy.”
Ende posted about the Gymboree Paramus store opening on LinkedIn: "Looking forward to more stores to come."
The Children's Place has had a series of financial woes, seeking financing earlier this year. In the fiscal second quarter, net sales decreased 7.5%, to $319.7 million, compared with $345.6 million in the prior-year period. Comparable retail sales dropped 7.2% for the quarter.