The Children’s Place named winning bidder in bankruptcy auction to acquire IP assets of Gymboree and Crazy 8
The Children’s Place, Inc. (TCP), pure-play children’s specialty apparel retailer in North America, recently announced that, as part of an auction held in connection with Gymboree’s bankruptcy proceeding, a wholly-owned subsidiary of the Company has entered into an Asset Purchase Agreement with Gymboree Group, Inc. and related entities to acquire intellectual property and related assets of Gymboree and Crazy 8 (the “Gymboree Assets”) for $76 million in cash. The Gymboree Assets include the worldwide rights to the names “Gymboree” and “Crazy 8” and other intellectual property, including trademarks, domain names, design rights, and customer databases. The acquisition of the Gymboree Assets is subject to the approval of the United States Bankruptcy Court for the Eastern District of Virginia at a hearing scheduled later today and other standard closing conditions.
The purchase price is expected to be funded by cash on hand and borrowings under the Company’s revolving credit facility. The acquisition is anticipated to be accretive to Adjusted EPS beginning in Fiscal Year 2020 following low teens percentage dilution to Fiscal Year 2019 Adjusted EPS as the Company makes incremental investments to support the strategic opportunities provided by the Gymboree Assets.
Jane Elfers, President and CEO said, “Gymboree’s recent bankruptcy announcement and our agreement to acquire the Gymboree Assets significantly strengthens our long-term position. Control of the Gymboree brand and IP will now allow us to meaningfully expand our previously targeted market share opportunity. The acquisition will be an attractive vehicle to expand our business across price and channel. It will provide us with a path to revitalize the Gymboree brand across various channels, including e-commerce, TCP stores, wholesale, and international.”
Elfers concluded, “We have always had a great deal of respect for the loyal Gymboree customer. We heard her passionate response to Gymboree’s merchandising changes loudly and clearly and we are prepared for the opportunity to fill the void for this product in the marketplace. Importantly, the Gymboree customer, like our customer, is digitally savvy, and our accelerated investment in digital capabilities in 2018 puts us in a stronger position to be able to bring these new customers into our omni-channel ecosystem. We look forward to maximizing the multiple opportunities that this acquisition will provide to create value for our shareholders.”
The Children’s Place is one of the largest pure-play children’s specialty apparel retailer in North America. As of February 2, 2019, the Company operated 972 stores in the United States, Canada and Puerto Rico, an online store at www.childrensplace.com, and had 217 international points of distribution open and operated by its eight franchise partners in 20 countries.
Source: The Children’s Place Secaucus, New Jersey, United StatesNews Retail US