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Exhibit 99.1
Analyst Contact:
Jordan Goldstein
(650) 696-2933 8:00 am Eastern
Gymboree Reports April Sales,
Credit and Financing Arrangements
Burlingame, CA, May 4, 2000. The Gymboree Corporation (Nasdaq: GYMB) reported
sales for the four-week period ended April 29, 2000, of $43.5 million, an
increase of 23% from sales of $35.4 million for the same period last year.
Comparable store sales for the four week period increased 19% compared to the
same period last year, driven largely by the pre-Easter promotional event held
in the second half of the month.
Net sales for the first fiscal quarter ended April 29, 2000, were $100.6
million, a decrease of 20% from sales of $125.7 million for the same period last
year. Comparable store sales for the thirteen-week period decreased 24%.
Gymboree also announced that it has extended its credit facility to July 31,
2000. The company expects to replace its current credit facility with a new
three-year, $60 million secured facility. The new credit facility is subject to
the bank's final approval and execution of definitive agreements.
In addition, Gymboree announced that it has entered into an agreement to sell
approximately 2.5 million common shares to a group of investors which includes
Stuart Moldaw, the company's Chairman and Chief Executive Officer, for a
purchase price of $2.97 per share. The shares will be restricted from sale for
six months from the issue date. The company expects to close this sale within
the next two weeks. The company is considering raising additional funds to
cushion the second quarter if necessary.
"We are raising capital at this time to ensure that we have the resources needed
to drive positive comp sales and profitability in the third and fourth quarters.
Specific steps include re-introducing our classic outfit orientation and
rebuilding our inventory, which is approximately 30% below year-ago levels,"
said Mr. Moldaw. "Because we are an integrated retailer, it is not possible to
alter our inventory significantly, either in terms of amount or content, until
the third-quarter deliveries. We believe we will see a turn in our business
beginning in the third quarter."
"We took high markdowns in April to maximize cash return on our inventory during
the high-traffic shopping period before Easter. This sale event, combined with
the comp store losses of February and March, indicates that our first quarter
results will fall in a range between a loss of $(0.56) and a loss of $(0.59).
We believe cash on hand at the end of the quarter totals
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approximately $25 million," said Mr. Moldaw. "The anticipated results for the
second quarter of this year could be in a similar range, adjusted for the shares
outstanding," he added.
The Gymboree Corporation designs, manufactures and retails unique, high-quality
apparel and accessories for children. As of April 29, Gymboree operated 605
stores, including 554 stores in the United States, 20 stores in Canada and 31 in
Europe, as well as an online store at www.gymboree.com. The company also offers
directed parent-child developmental play programs at more than 420 franchised
and company-operated centers in the United States and 14 other countries.
The foregoing sales figures for April are unaudited and subject to
quarter-end adjustment and could differ materially from those indicated. The
foregoing paragraphs contain forward-looking statements within the meaning of
the Federal Securities laws which reflect our current view of future events
and financial performance, including statements about executing a new three-
year, $60 million credit agreement, issuing new equity shares, raising
additional funds, returning to our outfit orientation, customer acceptance of
future merchandise deliveries, future comparable store sales performance and
anticipated quarterly earnings. Actual results could differ materially as a
result of a number of factors, including bank approval of the new credit line
and execution of the final agreements, the market price of our stock, our
success in issuing shares, our success in turning our business in the third
quarter, our ability to achieve positive comp store sales, our success in
delivering appropriate merchandise inventory levels, general economic
conditions, competitive market conditions, and consumer acceptance of our
products. Other factors that may cause actual results to differ materially
include those set forth in the reports that we file from time to time with
the Securities and Exchange Commission.
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