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The Gymboree Corporation (NASDAQ:GYMB)

F2Q09 Earnings Call Transcript

August 19, 2009 4:30 pm ET

Executives

Jeff Harris – Vice President of Finance

Matthew McCauley –Chief Executive Officer

Kip Garcia – President

Blair Lambert – Chief Operating Officer and Chief Financial Officer

Analysts

Betty Chen – Wedbush Morgan

Linda Tsai – MKM Partners

John Zolidis – Buckingham Research

Tom Filandro – SIG

Adrienne Tennant – FBR

Rick Patel – Bank of America/Merrill Lynch

Margaret Whitfield – Sterne, Agee Capital

Janet Kloppenburg – JJK Research

Stacy Pak – SP Research

Dana Telsey – Telsey Advisory Group

Dorothy Lakner – Caris & Co.

Brian Tunick – JPMorgan

Lee Giordano – Imperial Capital

Analyst for John Morris – Bank of Montreal

Marni Shapiro – The Retail Tracker

Bill Dezellem – Tieton Capital Management

Operator

At this time, I would like to welcome everyone to the Gymboree Corporation second quarter 2009 earnings conference call. (Operator instructions)

Jeff Harris

Welcome to the Gymboree Corporation's second quarter 2009 earnings call. I'm Jeff Harris, Vice President of Finance for Gymboree.

On the call with me today are: Matthew McCauley, Chairman and CEO; Kip Garcia, President; and Blair Lambert, COO and CFO. Matt will start off with a few comments on the current state of business. Kip will then discuss product performance for the second quarter and our other merchandising initiatives. Blair will then follow with a few comments about our second quarter financial performance and plans for the third quarter of 2009. After everyone has completed their prepared remarks, we will all be happy to take your questions.

I want to point out that our presentation today contains forward-looking statements, including statements about trends and operations, future sales expectations and future financial performance. Actual results could differ materially from those forecast as a result of a number of factors, including those set forth in our Form 10-K for the year ended January 31, 2009, filed with the SEC.

I would also like to point out that we intend to continue to comply with the SEC regulation FD. As such, we will not be providing guidance or projections outside of public forums.

You should also be aware that your participation in the Q&A session constitutes your permission to transcribe and rebroadcast any comments you may make.

Now here's Matt McCauley.

Matthew McCauley

Thank you for joining us on our earnings call today. This quarter represents the most successful second quarter in our company's history so I want to start by thanking and acknowledging every one of our team members that have made sacrifices and delivered on seemingly impossible goals.

Sales grew 5%, operating income grew 35%, and EPS grew 52%, or 33% net of our tax benefits. Every team made significant progress on their goals this quarter. Their commitment and sacrifice not only drove growth in one of the most challenging economic environments we have seen, but also made it possible for us to continue laying the groundwork for long-term growth.

I would like to highlight a few of the goals and strategies that we are focusing on and the progress to date. I will start with our near-term strategies around marketing and promotions and then I will give an update on some of our longer-term strategies, including Crazy 8, Gymboree Boy, and International.

In the near term, our strategy continues to be focused on gaining market share through aggressive marketing and expanding our current branded events. Consumers are spending less so we simply have to get more of them in our doors. Consumers are also more value-conscious so we have to be more relevant and speak their language.

Starting with getting more customers in our doors—over the last four years we have implemented a broad-based marketing strategy that is driving new customers in our stores and onto our Web sites. The strategy includes broad-based advertising efforts such as our partnership with Proctor & Gambles' Tide brand to reach a wide array of customers.

More focused advertising, such as our ads with Parents magazines and prospecting direct mail campaigns that target specific demographic and psychographic criteria. And then even more focused direct mail campaigns aimed at reactivating prior customers.

And then once the customers are in our data base, we stay connected with them through regular email efforts, social networking sites, and later this year we will introduce a points-base loyalty program that rewards customers for their ongoing purchases on a regular basis.

We are also seeing great results from our efforts to expand our branded events. As customers focus more on value, we are messaging and offering compelling prices to a broader range of customers. We are doing this through our current branded events. Rather than adding more promotions, we are making our events bigger and more profitable.

In June we ran a very successful Fill-a-Bag promotion for eight days, replacing a Peel-a-Prize event that ran for twelve days last year. This year's event offered customers 30% off all goods they fit in our branded, reusable shopping bag. The event drove strong double-digit comps versus the prior year.

In July we ran one of the most successful Gymbucks events we've seen in several quarters. The July Gymbucks redemption was driven by a longer Gymbucks issuance period and for only the second time, issuance of Gymbucks in Gymboree factory outlet stores.

While the Gymbucks could only be redeemed in the full-price stores, this new approach helps increase average trends in outlets, results in more Gymbucks issues, and more transactions during the redemption period in our full-price stores.

With our aggressive marketing efforts and our enhanced promotional events, we have grown our total number of transactions, despite a negative 10% comp in Q1 and a negative 1% comp in Q2.

Now turning to our longer-term growth strategies, Crazy 8, our lower price point concept, continues to perform well. With improved color palettes, more outfits and easy to understand denim assortments, sales and margins exceeded our plans. In the first six months of the year, Crazy 8 cuts its loss from $0.09 to just $0.05. Our goal is to break even in Q3.

As I have said before, this is an ideal time to be expanding Crazy 8. This new concept caters to a value-conscious customer, our cost of goods reductions are driving higher margins, and we are assigning more favorable leases on all of our new stores.

Armed with the strong assortments, increasing IMUs and the growth in average store sales, we are now planning to open a total of 28 Crazy 8 stores in fiscal 2009, bringing the total store count to 66. We also plan to open a minimum of 50 new Crazy 8 stores in 2010.

We also continue to be excited about our growth opportunity in Gymboree Boy. We are making progress as Boy continues to lead the way in sales and margin growth year-over-year. Without increasing square footage, we believe we can ultimately grow the Boy business as much as a hundred million through increased marketing efforts, expanded assortments, and woven tops, bottoms, and graphic tees.

International is another growth opportunity that we are exploring. We had previously highlighted that there are three different ways to approach international markets: direct ownership; licensing; and/or joint venture.

At this point we are educating ourselves on the opportunities by country. Part of this education is a test we are conducting with the U.K. children's retailer, Adams Kids. Adam's owns and operates 109 stores in the U.K. and licenses 129 stores internationally. Our test with Adam's consists of selling Crazy 8 product in two London stores. We will assess the consumer demand for our product and styling over the next few months and determine what the next steps will be.

Before I conclude, I want to highlight a few of our defensive strategies. Product cost reductions have continues to improve despite strong headwinds. In addition, our stores' organization, along with their counterparts, managed to not only leverage payroll with a negative comp, but also achieve the highest Q2 customer service scores to date. In short, this is a perfect example of a mission impossible accomplished.

These efforts, along with the numerous expense savings in all other areas, allowed us to leverage SG&A expense over 400 basis points during the second quarter.

I would now like to turn the time over to Kip to provide some more color on the brand and line performance.

Kip Garcia

As Matt said, Q2 was a strong quarter. We are excited about our product performance and the success of our strategic assortment objectives to drive sales and margins. Particularly successful was our effort to drive more wear-now sales for last minute summer purchases and our strategies to gain market share for back-to-school have been well received.

Starting with Gymboree, we finished the summer season on a high note with the success of our high summer watermelon theme collection for girls and surf-themed product for boys, which hit stores in June.

Traditionally, we have delivered a transitional wear-forward line at this time, however, our customers have been buying more wear-now and these lines were the right product with the right themes at the right time for what our customers were looking for. We also picked the right balance of the emotional fashion styles and key opening price point items for end of summer selling.

Turning to our current trend, back-to-school market share has been a focus at Gymboree with a goal to have Gymboree become top of mind for back-to-school shopping for moms of early-grade school kids.

At the category level, denim was a huge success. Washes, fits, details, finishes of fabrics, were all improved for this back-to-school season and the customer reaction has exceeded our expectations.

Additionally, back packs and uniforms were consistent performers as key back-to-school essentials.

Our fashion collections for back-to-school have also been strong performers, including our dinosaur theme collection for boys and our New York Girl collection for girls, which featured a cute Yorkie dog icon and perfect for back-to-school plaids and argyles.

And the initial reaction to our latest collections, targeted at maximizing later back-to-school priming, have been strong as well. For boys, our football team collection features classic prep styling in rich colors with masculine details. And for girls, it's all about rock and guitars featuring bright colors anchored in a rich, heather gray, in fun, girly silhouettes.

At the department level for Q2, Boy posted the strongest comps, which is in sync with our strategy to grow our Boy market share, and we are encouraged by the current positive trend in Girl.

And finally, with all the positive product performance news, we still feel that we have further opportunity to gain market share. Particularly, there is still significant market share opportunity for Gymboree Boy and we are continuing to focus on growing our new-born business.

Turning to Janie and Jack for Q2, comps continue to be challenging, however, sales improved throughout the quarter. Our recent soda fountain theme collection for Girl ended the quarter on a positive note. Highlights within the collection were whimsical cake prints, ribbon trims, and beautiful wear-now fine poplin dresses. For Boys, we also offered more wear-now product in June and our plaid shirt from our Treasurer Explorer collection was our top volume driver.

Our strongest comp for the quarter came from our new Signature Layette collection, which hit in June. Signature Layette was our ultimate shower gift collection, which includes precious, refined details and styling in ultra-soft soft knits and delicate woven fabrics for brand new babies.

New this season are tiny boat prints for boys and heart prints for Girls and based upon customer feedback, we brightened our color palettes, featuring deeper pinks and richer blues that could be both wear-now and wear-forward.

Looking to forward opportunity with Janie and Jack, we continue to focus on building our regular priced sales and improve the seasonality of our lines as the customer continues to purchase closer to need.

Turning to outlet, Boy was our strongest department driver for the quarter, followed by our baby departments. At the class level, shorts were key drivers. Plaids, patchworks, and novelty shorts for both boys and girls continued to be best sellers throughout the quarter.

And for back-to-school, outlet also created jean destinations in their stores and denim has been a key sales driver, particularly in Boy, which had an expanded jean shop this year.

Now for Crazy 8. With our eye on back-to-school market share and to better address our core customer, we made an adjustment to store product, particularly in Girl, to be more outfit-driven, offer more feminine—

[Interruption by operator due to communication/volume issue asking for adjustments/changing instruments.]

Sorry for the redundancy, but I'm going to start back with Janie and Jack.

[Operator interrupts again due to phone switching off. Dials back to executives.]

At the risk of being redundant, I'm going to start with Janie and Jack.

Turning to Janie and Jack for Q2, comps continue to be challenging, however, sales improved throughout the quarter. Our recent soda fountain theme collection for Girl ended the quarter on a positive note. Highlights within the collection were whimsical cake prints, ribbon trims, and beautiful wear-now fine poplin dresses. For Boys, we also offered more wear-now product in June and our plaid shirt from our Treasurer Explorer collection was our top volume driver.

Our strongest comp for the quarter came from our new Signature Layette collection, which hit in June. Signature Layette is our ultimate shower gift collection, which includes precious, refined details and styling in ultra-soft soft knits and delicate woven fabrics for brand new babies.

New this season are tiny boat prints for boys and heart prints for girls and based upon customer feedback, we brightened our color palettes, featuring deeper pinks and richer blues that could be both wear-now and wear-forward.

Looking to forward opportunity with Janie and Jack, we continue to focus on building our regular priced sales and improve the seasonality of our lines as the customer continues to purchase closer to need.

Turning to outlet, Boy was our strongest department driver for the quarter, followed by our baby departments. At the class level, shorts were key drivers. Plaids, patchworks, and novelty shorts for both boys and girls continued to be best sellers throughout the quarter.

And for back-to-school, outlet also created jean destinations in their stores and denim has been a key sales driver, particularly in Boy, which had an expanded jean shop this year.

Now for Crazy 8. With our eye on back-to-school market share and to better address our core customer, we made an adjustment to store product, particularly in Girl, to be more outfit-driven, offer more feminine styling and colors, and take a stand on key back-to-school categories. We are pleased that the customer reaction to these changes has been very favorable.

At the category level, our new and improved jean shops with both boys and girls are off to huge pluses. We improved our fabric, fit, finishes and details and presented them in a compelling shop format where customers could easily find their favorite fits and washes within a color-coded system. Our denim styles from our fashion lines were also best sellers, featuring skinny silhouettes for girls and slim, straight styles for boys. Fashion jean colors, like gray denim, for both boys and girls, were also strong sellers.

We are very pleased that our recent fashion collection, for both boys and girls, have been well received. For girls, our new collections are easy to outfit, our colors are bright and easily mix-and-match, and our styling is both trend-right and age-appropriate.

And for boys, our customers are responding to our classic masculine styling, understandable, easy-to-outfit color guides, and fun graphics. We are also please with the performance of our uniform shops which start early in June, and our every-day value graphic tee tables continue to be consistent category drivers.

Finally, for Crazy 8, we are encouraged by the initial reaction to our product strategies for this brand and are looking forward to reporting on our future progress.

And now I would like to turn it over to Blair.

Blair Lambert

As reported in our press release, net sales from retail operations for the 13 weeks ended August 1, 2009, were $212.3 million, a 5% increase from $202.8 million in net sales from retail operations for the 13-week fiscal quarter last year.

Other revenue for the quarter, attributable to our Play & Music operation, was $3.1 million compared to $2.9 million in the prior year.

In total, net sales for the quarter were $215.4 million versus $205.7 million for the prior year, an increase of 5%.

As previously reported, comparable store sales for the second quarter decreased 1%.

During the quarter we saw an increase in the total number of transactions and units per transaction and decreased in average unit retails and transaction size.

The total number of stores open at the end of the quarter was 926, including 591 Gymboree stores in the U.S., 31 Gymboree stores in Canada, 2 Gymboree stores in Puerto Rico, 135 Gymboree outlet stores, 120 Janie and Jack shops, and 47 Crazy 8 stores.

During the quarter we opened a total of 25 new stores. Total square footage under management at the end of the quarter was 1.818 million square feet, with an average store size of roughly 19,060 square feet.

Turning now to gross profit, gross profit rates for the second fiscal quarter of 2009 decreased roughly 240 basis points to 43.3% compared to 45.7% for the same quarter the prior year.

The reduction was primarily due to lower merchandise margins of 200 basis points and negative occupancy expense leverage of roughly 80 basis points, partially offset by buying cost leverage of 40 basis points.

Let me now turn to SG&A expense. In the second quarter SG&A as a percentage of sales, decreased 420 basis points to 35.2% of sales compared to 39.4% in the prior year. The SG&A expense decreases were driven by lower corporate store and incentive compensation, lower marketing expense, lower operating supply expense, reduced stock-based compensation, and lower benefit costs.

The marketing savings of approximately 100 basis points reflects a shift in the timing of the expense rather than a permanent reduction. These savings were partially offset by an impairment charge of approximately $500,000 for two underperforming Gymboree stores.

Moving to income for the quarter, operating income was $17.4 million, or 8.1% of sales, compared to $12.9 million, or 6.3% of sales, in the prior year.

Net income was $12.2 million, or $0.41 per diluted share, compared to $0.27 per diluted share in the prior year.

Our tax rate for the quarter was 31%, down from 39.7% last year. The lower rate is primarily due to larger than anticipated benefits associated with our international tax planning efforts. As a result, we now anticipate a tax rate of 38% to 38.5% for the remainder of the year.

Let me now move on to the balance sheet. Cash and cash equivalents at the end of the quarter were roughly $165.0 million with no short- or long-term borrowings.

Inventory at the end of the quarter was at $129.3 million compared to $129.1 million in the prior year.

On a per-square-foot basis, inventories were down about 11% due to: one, better sell-throughs; two, lower average unit costs; and three, the growing number of stores in our value-priced outlet and Crazy 8 divisions.

On balance, average units per store are only down mid-single digits. These inventory levels were taken into account when we prepared our Q3 guidance for negative low-single digit comparable store sales.

Gross capital expenditures for the quarter were $10.2 million, depreciation expense for the quarter was about $9.2 million.

Let me now turn to speaking about our plans for the third quarter of fiscal 2009. As has been our practice, we have taken a cautious approach in developing our plans for the third quarter. We were planning for third quarter earnings to be in the range of $0.95 to $1.03 per diluted share.

Notably, we are planning for the Crazy 8 concept to break even in the third quarter versus a loss of $0.03 in the third quarter of the prior year.

Looking at sales, as previously mentioned, we are planning for negative comparable store sales in the range of low, single digits during the third quarter.

In terms of real estate, we plan to open 26 new stores during the third quarter consisting of 7 new Gymboree stores, 4 new Gymboree outlets, and 15 Crazy 8 stores. We also plan to remodel, expand, or relocate 10 Gymboree stores.

For the full year, we are planning for 72 new stores consisting of 18 Gymboree stores, 21 Gymboree outlets, 5 Janie and Jack shops, and 28 Crazy 8 stores.

Total capital expenditures for the third quarter are planned at $12.0 million. For the full year we are planning at turning capital expenditures at roughly $48.0 million. These expenditures will support new store openings, remodels and relocations, along with targeted investments in our distribution center and other information technology systems and infrastructure investments in support of various initiatives.

As a reminder, our new Gymboree store design is being implemented in all new Gymboree stores and in stores that are subject to lease-required remodels. The new format provides an appropriate upgrade to the store design at the same or lower cost than the prior format. While we have seen a modest pickup in sales after remodels, as we had expected, the increase does not justify remodeling stores prior to lease expiration.

Depreciation for the third quarter is planned at $9.4 million while full year depreciation is planned at $38.0 million.

In terms of gross margin, during the third quarter we are planning for reduction to roughly 200 basis points, including 100 basis points of deleverage related to occupancy.

SG&A is expected to leverage less than Q2 at 100 basis points to 200 basis points. More specifically, we are expecting higher marketing expenditures as a percent of sales and less compensation leverage in Q3 versus Q2.

Operating margins for Q3 are expected to be flat to slightly down versus the prior year. As previously mentioned, we are planning Q3 based on a tax rate of 38% to 38.5%.

Now let me turn it back over to Matt.

Matthew McCauley

In summary, our aggressive offense is making headway on customer acquisitions and our defense strategies are allowing us to continue to fund marketing as well as significant store growth. We have a very promising long-term growth vehicle in Crazy 8 that is more relevant today than ever before.

With our solid cash flow, a strong balance sheet, tremendous brand equity, and new brand growth ahead, we are optimistic about our ultimate vision of reaching every mom in America and driving substantial long-term growth for our shareholders.

Now we would be happy to answer any questions that you have.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question comes from Betty Chen – Wedbush Morgan.

Betty Chen – Wedbush Morgan

I was wondering if you can talk a little bit about the SG&A outlook that Blair just provided. I was curious on perhaps why we are looking for less of a leverage in Q3 and besides the marketing expense is there anything else that is coming incrementally and how we should think about that also, even for the holiday season.

Blair Lambert

Part of it is just the size of the number. You have a bigger quarter in Q3 so the same dollar savings that we may have incurred in corporate compensation, 401k expense, and incentive compensation, will provide less percentage relief as SG&A leverage as a percent of sales. It is as simple as that.

In addition to that, as you say, the marketing piece is really a push from Q2 into Q3. It's really a timing of one of the mailings. And in addition to that, the spend in the quarter is a little bit higher than in the prior year. Over and above that one item that's being pushed.

Betty Chen – Wedbush Morgan

If we could spend a minute on Crazy 8. It definitely sounds like during the second quarter we saw some very nice improvements on top of the progress we saw in Q1. What is changing with the story in Q3 that we can now expect break-even, other than the fact that I think, Matt, you have mentioned that sales and margins have exceeded expectations. Are we also starting to reach a position where we have enough scale and volume in the business that we could see it break-even in Q3 and profitability in Q4.

Matthew McCauley

There are really three things impacting it. The first is the scale. Yes, we are going to have more stores than we did in Q2 and on the year the average store volume will be higher and our margins are coming up, just naturally. As our purchases were growing last year for sales this year, our initial margins went up and we are seeing that translate to our net margins. So those things are really impacting the third quarter for us.

Betty Chen – Wedbush Morgan

Is it fair for us to think at this point that Crazy 8 could be accretive in 2010?

Matthew McCauley

When we guide 2010 we will comment on that but certainly we're on the right trajectory.

Operator

Your next question comes from Linda Tsai – MKM Partners.

Linda Tsai – MKM Partners

Relative to inventories being down 11% and then your units being down in the mid-single digits, how are you planning those two metrics as you look out to Q3 and the rest of the year?

Matthew McCauley

We're insisting our inventories will build a little bit as we go through the fourth quarter. They will be pretty similar as we go into the fourth quarter, similar to how we started the third quarter but they will build as we go through the fourth quarter.

Linda Tsai – MKM Partners

And then how about units per store?

Matthew McCauley

They will both build. It will be a similar track.

Linda Tsai – MKM Partners

How is Crazy 8's back-to-school outfitting strategy panning out and how do you make sure you strike the right balance between replicating the unique outfitting strength of Gymboree at Crazy 8 but making sure it doesn't lure away Gymboree customers?

Matthew McCauley

I will just comment on a couple of things. I'm not sure what pieces you missed on the Crazy 8 section but we are seeing very nice results in the back-to-school time period especially.

Outfitting is really key here. The whole strategy with Crazy 8 was to fill a space that we thought was a void in the market, which was cute hold from outfits outprice. And so that is the strategy and it is unique to its competitors. And so that's competitive advantage there.

As to your question on how we make sure that it stays unique from Gymboree, I just want to comment on the cannibalization there. In general, we had anticipated a pretty decent cannibalization number there and reality is we're just not seeing it. In fact, we're seeing average store sales in the same malls where we share Gymboree and Crazy 8, they're actually up slightly. Over time we will see where that goes, but to date we're seeing positive correlation.

And what we're really trying to focus on is making sure that Crazy 8 is unique and has a competitive advantage to its competitors because we definitely see this as a very different customer than Gymboree.

Linda Tsai – MKM Partners

So do you think you're taking share more from the discount department stores?

Matthew McCauley

When we talk to our customers there is some kind of three big buckets that they tell us that they also shop. You know, how much share we're taking from them is a good question. We don't have a lot of stores out there yet but the three major places that they're shopping is Target, Children's Place, and Old Navy. Pretty much in that order.

Operator

Your next question comes from John Zolidis – Buckingham Research.

John Zolidis – Buckingham Research

I am going to continue the theme here talking about Crazy 8 and specifically the 60 store openings for next year?

Matthew McCauley

We have 66 stores open by the end of this year, opening a grand total of 28 this year and we're opening a minimum of 50 next year.

John Zolidis – Buckingham Research

Okay, so that will take you to approximately 90 to 100 by midyear, depending on the cadence of the openings. And I guess in my experience with some other new concepts, typically 90 to 100 stores is where you need to get to have similar merchandise margins from a volume/purchasing standpoint to a larger store chain. So I was wondering, do you anticipate that to be the case for Crazy 8 and if not, how many stores do you think you need to have before you can get the same volume discounts that you are getting at the core business?

Matthew McCauley

That's typically the case. We've seen the same thing happen as we opened Janie and Jack and as we did the same with our outlet business. And so we're forecasting very similar trends. I wouldn't say that it would be completely normalized but it would be significantly better than where we are today.

So, our expectations are very, very high on the margins here and so we will be making progress. We will be higher than where we are today. It definitely is kind of one of those big hurdles that you have to overcome and it makes a big difference on the costing. But it won't be at our peak IMUs at that time.

John Zolidis – Buckingham Research

One other question on this Adams Kids in London, can you talk a little more about your reason for pursuing that strategic alliance and what other thoughts you might have about international markets.

Matthew McCauley

We basically kind of have taken a much broader approach and said let's look around the world and see where the opportunities exist and try to educate ourselves. And looking at different countries, obviously there are different ways to enter those markets. We are in the process of kind of educating ourselves and seeing all these other opportunities worldwide.

We established a relationship with the owner at Adams Kids and we worked out an arrangement where we decided we would try to test our product there. At the end of the day if the product works then it opens up a lot of opportunities. If it doesn't, then it's a very inexpensive way for us to find out. And so that's really kind of the thought behind it.

We have a very inexpensive, quick way to get a read on how the customer responds to our product. And so that's what we're doing.

Operator

Your next question comes from Tom Filandro – SIG.

Tom Filandro – SIG

A follow up to the Adams question. Why not just Gymboree product as well?

Matthew McCauley

Well, it's a good point. What we're testing is actually our product under their label, under their store front, and so at this stage that's kind of our first step. We want to see how they respond to our styling. That brand has actually been there for about 70 years and so we're really leveraging that brand awareness there and testing the responsiveness to our styling.

And we already know how Gymboree does there. We were there in '97 until 2004 roughly, so we have a pretty good read on how our product sells there.

I will just comment on that. When we were there, there were two things that caused us some challenges. One was the rents were too high, and two, our initial margins were too low. Since that time both of those things have changed. Rents have come down and our initial margins are significantly higher than they were before. So we're taking that information into account as we're assessing the opportunities worldwide.

Tom Filandro – SIG

So am I hearing this correctly is that potentially if it is successful this could be a wholesale strategy as opposed to a strict retail strategy, meaning your brand—I'm not really sure I'm following this.

Matthew McCauley

We haven't ruled out any of those possibilities right now. Right now we're really just trying to figure out how does the customer respond to our styling and our product. And as I said before, that kind of opens up a lot of opportunities. If there is demand for our product there. And it could come in the form of a lot of different structures.

Tom Filandro – SIG

I want to focus on Crazy 8. I have a specific question about can you help us understand the cross marketing strategies that you currently have in place? The reason I ask specifically is I have witnessed in Gymboree stores customers receiving Crazy 8 coupons and of course we're seeing it in magazines and some other areas, so can you give us an overall understanding of the marketing strategy as it relates to Crazy 8 and how you are using Gymboree to build the Crazy 8 business.

Matthew McCauley

We have leveraged Gymboree more than we did when we launched Janie and Jack, so we launched Janie and Jack, we leveraged the Gymboree email list a few times a year, and actually we continue to do that. We found that that helps increase awareness, even though we know that the customer is not 100% overlap there, we knew that it would increase brand awareness.

We have taken a few more steps in Crazy 8 and you will notice that in our stores where we don't share Gymboree locations in the mall, we will actually save Crazy 8 and buy Gymboree. We feel like that has helped increase awareness.

In our direct mail we have also communicated in a lot of our prospecting that this Gymboree's newest concept. So we feel like that helps add credibility and awareness.

We have also done the same thing that we did with Janie and Jack and we've done emails to the email list of Gymboree, introducing them to the brand.

We know that we have a lot of customers that reach very different spend on children's clothes and so we've also introduced our Play & Music customers with our welcome kits to all of our brands, knowing that that is a large population that spends at different levels on their children's clothes. So we're reaching in with Janie and Jack, Crazy 8, and Gymboree as a welcome kit in the Play & Musics.

We have also done some co-branding ads in some of the magazines and that's really kind of the big focus for us, is the top of store, the direct store, and email. Those are kind of the biggest ones that have really helped us.

And then of course, when shoppers are in our stores, customers are in the stores, if they happen to be, if we're out of a size or something that they know they can find in Crazy 8 or vice versa, our sales associates are openly encouraging them to go to the competition of Crazy 8 and vice versa back to Gymboree.

Tom Filandro – SIG

Blair, the AUR spending pattern that's been around now for a while, can you give us a sense of when you think you will begin to cycle against that lower AUR spending pattern and will potentially see a leveling off of that metric?

Blair Lambert

If you look at merchandise margin reduction in this next quarter, we actually said it was only going to be about 100 basis points was left over after [inaudible] occupancy leverage, so a little bit better merchandise margin.

So you start seeing a leveling showing up as we go into that third quarter, essentially, but the trend has been going on for a little while. Now, keep in mind that it is going to be somewhat driven by what happens in the economy.

The big events that drove it this quarter were the successful Fill-a-Bag promotion and the success of the Gymbucks promotion, supported by Gymbucks being issued in the factory outlets.

So as long as we need to be speaking to value we are going to continue to speak to value and that's going to put a little bit of pressure on averaging retails.

Matthew McCauley

Just one other thing that I would throw out there. It's actually pretty interesting, is that our average unit retail in our promo sales is actually up to last year. We're more profitable in those promos but because they're a larger percentage of the total sales, it's bringing the total average unit retail down.

So it's coming from mix, but those promo sales actually have a higher AUR than last year and are more profitable.

Tom Filandro – SIG

Kip, it does appear that although you've given credit to the denim success at Gymboree, it appears that what we witness out there in stores has been hugely successful and a lot of stores are actually very light on the denim inventory. Is that, broadly speaking, the case and can you get into that category more aggressively for the balance of this year? Or is it more of a 2010 opportunity?

Kip Garcia

We think [inaudible] first because we did increase our ownership in denim in back-to-school. We had more clothes than the customer reaction, was going to be very modest, so we definitely oversold. And I think that's where several of you on the call have probably seen the Gymboree store, we got blown out way too early.

We were able to get reorders that will be coming in, in November. For the basic denim that's in the denim mall so at least we will be able to continue the momentum for back-to-school in the fourth quarter.

However, we also took a stand on fashion denim and so denim is going to be coming in the fall with our regular line so it's not like we're going to be out of denim, it's just that those basic walls that were so fantastic are going to take a break for a little while and we'll come back in the fourth quarter.

In Crazy 8, on the other hand, we actually planned reorders throughout the season because we are planning that to be a perennial in-stock, everyday program. So Crazy 8 is in a lot better shape. We may be breaking in a couple of special [inaudible] but we will be able to get back into those with our planned reorders.

And so I feel really good about our stock position in Crazy 8 and then Gymboree, we will be seeing that stuff back in around Thanksgiving.

Operator

Your next question comes from Adrienne Tennant – FBR.

Adrienne Tennant – FBR

My question is on the loyalty program. Can you talk about when the launch is going to happen, what format it might take?

Matthew McCauley

First of all, starting with the launch, we'll be testing here in the next few weeks in a small way and anticipate rolling out sometime in the third quarter, possibly in the fourth quarter but goal is in the third quarter.

And the way that we see this is we've got a fantastic loyalty program already with our Gymbucks so this loyalty program will actually enhance. We will be able to automate Gymbucks, we will be able to track and associate names with those transactions, see better frequency. At the same time we will have a point system that will allow us to enhance the benefits and rewards for all the customers that participate in the program.

Adrienne Tennant – FBR

Is it truly a loyalty program that has monetary rewards? Some of these programs have first look at product and they fill pretty quickly, but is it primarily intended to give her financial benefit?

Matthew McCauley

It will be both. There will be soft benefits as well as monetary benefits.

Adrienne Tennant – FBR

And can you also talk about the co-marketing that you are doing with Tide? How are you gauging how successful that is and do you have any other creative marketing for the back half of the year?

Matthew McCauley

The big picture here is we are looking for brand-appropriate partnerships. This particular one made a lot of sense with them launching a new stain release product that really fits well with kids and staining clothes. So first, anecdotally, we are getting a lot of positive feedback from our customers that are appreciating the beautiful gift packaging and gift of that product in the stores.

The other way that we are really measuring it is, with this partnership we were able to get incentives from Gymboree into many print magazines that we normally wouldn't have benefit in. We were able to get some of the things, partnerships with some of our other brands that we wouldn't have been able to get into.

And so we are able to measure the response of all these coupons that are coming back in and measure that against what our investment is and so far it's been a great relationship.

Adrienne Tennant – FBR

It's a great idea. How long will that marketing be out there in the marketplace?

Matthew McCauley

It will go all the way through Q3 and a little bit into the fourth quarter, but mostly in the third quarter.

Operator

Your next question comes from Rick Patel – Bank of America/Merrill Lynch.

Rick Patel – Bank of America/Merrill Lynch

Could you tell us how far you've purchased your inventory at this point and is there any way to quantify how you're seeing product cost trend in the back half of the year and early 2010?

Matthew McCauley

We have purchased all the way through the rest of this year and up through mid-June and we are continuing to see the cost of goods trend to what we guided to and what our expectations were.

So we continue to make progress. Our cost of goods are coming down still.

Rick Patel – Bank of America/Merrill Lynch

And on your promotional strategy, just given the success you've had with your creative promotions at Gymboree and outlet, have you considered expanding your promotional efforts in the Janie and Jack and Crazy 8 fringe?

Matthew McCauley

Let me just kind of talk through our strategy on each of the brands.

Janie and Jack, we're really, really trying to protect the integrity of that content but at the same time we need to make sure that we're relevant in speaking the language that consumers are focused on right now, which is value.

So we have actually increased our messaging of value and more of a messaging about sort of mark-downs than we have in the past.

With Crazy 8, our focus is really about everyday low prices and so we have really messaged through price points in the store through emails, through our windows, great every day low prices, or category price points. And that seems to be working very well for us.

And the same thing in outlet. We are doing the same strategy as in Crazy 8, where it's all about great, everyday low prices and specific key categories at compelling price points.

Operator

Your next question comes from Margaret Whitfield – Sterne, Agee Capital.

Margaret Whitfield – Sterne, Agee Capital

I wondered, if you goal is to grow market share, if you have any recent statistics on how you are faring in that regard, in the children's apparel market.

Matthew McCauley

We used to have a partnership and track the total market share and percent. We haven't done that lately. We have been able to measure, obviously, our total transactions increasing and we're looking at our growth in the Boy business and comparing that to what we're hearing about the competition.

So we can't tell you a specific percent market share but we have a long, long ways to go in terms of the total market share. I think about a $31.0 billion market and we have a very small percentage of that as a company and we have a lot to gain.

We do plan on actually getting those services again so we will speak more specifically to the total percent market share that we are gaining. We are seeing growth in Boy.

Margaret Whitfield – Sterne, Agee Capital

You mentioned a $100.0 million additional opportunity in Boy. Over what time period do you think you could capture that additional volume?

Matthew McCauley

We haven't said that specifically. We have very aggressive goals for ourselves and what you are going to see over the next year or so is an increased emphasis on marketing. Boy-specific marketing, targeting that customers, increasing the wallet share of our existing customers, and more importantly, going after new customers. And you will see a more gender-specific aggressive marketing on that.

Margaret Whitfield – Sterne, Agee Capital

And you mentioned several ways to approach the international market and you're studying it by country. Are there any other countries that you're interested in pursuing, using one of these vehicles to penetrate?

Matthew McCauley

Actually we have been in several countries. We have been in discussions with a lot of potential partners but at this stage we are really educating ourselves and we will talk more about it as we get more information and as we feel more comfortable with our knowledge base.

Margaret Whitfield – Sterne, Agee Capital

Finally, your back-to-school sales seem to have gone awfully well, and apart from denim, I have noticed some other out-of-stocks. Can you comment as to whether or not you've seen some shortages besides denim?

Matthew McCauley

We have seen a nice response across both Boy as well as Girl. Are you talking specifically about Crazy 8?

Margaret Whitfield – Sterne, Agee Capital

I'm talking Gymboree.

Matthew McCauley

We haven't seen major categories where we've been out. So you may see a specific store where we're light in inventory in a category, but in general there hasn't been a major category that we've been light on across the company. And the good news is that every two or three weeks we've got the new lines coming in that really replenishes almost every category.

Operator

Your next question comes from Janet Kloppenburg – JJK Research.

Janet Kloppenburg – JJK Research

I was interested in something you said, Matt, about the Crazy 8 margins. I think you said a very high margin there. Is that business model out at a margin similar to your Gymboree business?

Matthew McCauley

Kind of going back when we launched this concept, as we said the first thing we had to do was launch outlets so that we could demonstrate to ourselves that we could produce high-quality product at fabulous prices. And so that's really what we're patterning concept after in terms of our costing and quality and construction. So we've got a great track record of it, we know what the potential is and that's what we're looking towards.

Janet Kloppenburg – JJK Research

So it's going to be a very high margin business if it unfolds the way you envision?

Matthew McCauley

Yes, that's our goal. We like to do high margin businesses.

Janet Kloppenburg – JJK Research

It sounds like expansion [inaudible] the company could have [inaudible] next year, given the number of store openings you announced for Crazy 8. I am wondering if you could give us a feel as to whether you could expand [inaudible] to get a double-digit rate next year?

Matthew McCauley

For Crazy 8?

Janet Kloppenburg – JJK Research

For the entire corporation.

Matthew McCauley

We haven't really talked about the other store openings. We felt like it was important to talk about Crazy 8 at this point because we're buying inventory and we're communicating to factories and so forth so we felt like it was important to communicate that at this stage. But we haven't commented on other stores.

The real question is can we accelerate the store openings for Crazy 8 more than 50. We set a minimum and at this stage and at this stage that's what we're comfortable with, with what we've seen. The things that we take into account obviously are can we get the right leases, can we get in the right malls and the right locations within the malls, and as long as we continue to hit our sales trends and the margins stay on track, really we are going to be kind of focused on making sure we can find the right deals, the right leases and we're going to make sure that we can get enough of those.

Janet Kloppenburg – JJK Research

Kip, I think you said that you had a positive trend in girls in August. Did you make a comment at all about comp store sales trends as a whole in August?

Kip Garcia

Not specifically by brand. We are seeing really positive results in Girl. In both Gymboree and Crazy 8, with their most recent lines, going into back-to-school.

Janet Kloppenburg – JJK Research

And then my question on the jeans being out of stock, is that something that could be [inaudible] as we go through the next couple of months here?

Kip Garcia

What was the question about? You were breaking up there.

Janet Kloppenburg – JJK Research

The question is about the jeans business at Gymboree. It sounds like you're broken there and you won't be back in stock until the fourth quarter. The question is that something that was not anticipated and could that drag down your comp results?

Kip Garcia

We [inaudible] through the back-to-school season but we actually don't comp. We did the averaging in fourth quarter last year. Getting back into this program in the fourth quarter is actually an opportunity. And when we built the guidance that's out there right now, we already knew exactly where those inventories were.

Janet Kloppenburg – JJK Research

Blair, did you speak any comments on your plans for incentive bonus accrual this year in the back half versus last year in the back half?

Blair Lambert

No. We will deal with that quarter by quarter.

Janet Kloppenburg – JJK Research

Will there be a higher bonus accrual this year than last year?

Blair Lambert

We're still performance based, so it's all going to be based on the performance that comes in.

Matthew McCauley

There is a performance plan in place for the rest of the company so the only thing that we've said is that the top four, regardless of performance, there won't be an incentive bonus. That's what we have said about the bonus there. But for the rest of the company, yes, there is a bonus plan. And it based on performance and basically we will pay the shareholders first and then the bonus will be paid after that.

Operator

Your next question comes from Stacy Pak – SP Research.

Stacy Pak – SP Research

I was hoping you could comment on the improved transactions in the Janie and Jack business. And just kind of talk about how you're reading that, do you think that customer is getting better or how do you read the improved transactions there?

Matthew McCauley

Our comments on transactions have been about the total company. Janie and Jack, we've seen some positive trends in revenues, towards the tail end of the second quarter going into the third quarter.

It continues to be under the most pressure of all of the brands and we would like to see the regular price business grow more. We are seeing a lot more growth come from the mark-downs. And so our focus is really how can we continue to protect this brand and grow the regular price business. And we are comfortable not pushing too hard on Janie and Jack as it is a higher-end price point, higher-end brand, that we really want to try to protect.

Stacy Pak – SP Research

I thought in the July call you called that out but maybe I'm wrong.

Blair Lambert

We called out that the business was faring better.

Matthew McCauley

We might have called it a trend, towards the end of Q2, so in July going into August, we were seeing nice positive trends there but we haven't commented on their specific number of transactions there.

Stacy Pak – SP Research

And so what you're saying is it's not really transactions then? I'm just trying to understand the customer.

Blair Lambert

We're just trying to say we didn't comment on it.

Matthew McCauley

So the comment on Janie and Jack is that we are seeing positive top line sales trends there. Unfortunately, some of it's coming from the mark-down business. That's where the growth is and we want to focus it more on the regular price business.

Stacy Pak – SP Research

And then on the IMU, where can that go, in terms of benefits? How far along are you? I don't know if you want to quantify it, but just sort of give us a sense of how much more opportunity there is in IMU going forward here. And not the Crazy 8 piece, I understand that.

Matthew McCauley

The opportunity in Gymboree, we are into our fifth year of this, where we've seen steady and nice reductions in cost of goods. Our philosophy is that we're never done so we'll always continue to focus on that. The opportunities for Gymboree are new countries.

Actually, leveraging purchasing power with other brands and looking at fabric opportunities and so there are always going to be opportunities. So we are never done.

But the improvements are going to be more modest for Gymboree. We have purchased through the middle of next year and are comfortable that we've been hitting our targets and they are continuing to reduce. But it's going to be more modest going forward on Gymboree.

Stacy Pak – SP Research

You don't do things right now like buying together, buying your brands together and things like that?

Kip Garcia

There's not a lot of that. And for Gymboree and Gymboree outlet, yes, we will be in similar factories and we can do some leveraging there. But there will be opportunities as the brands grow to look at their buying power being able to leverage within factories, within fabric purchases, all of those things that can actually move the needle for all brands.

Stacy Pak – SP Research

And then the shift in marketing that you talked about from Q2 into Q3, is there an event that is associated with that and if so, what is it and should we expect some sort of a sales impact?

And if the rents are down and the IMU is so much better, why not take Gymboree international now?

Matthew McCauley

So your first question is about the calendar in the third quarter. The calendar is very similar to last year. The only thing that is different in the Gymbucks that we've talked about is increasing the number of coupons issued through Gymboree outlet.

Blair Lambert

There's also a direct mail that last year and this year, the coupon is redeemable in Q3 but the timing of the expense is going into Q3 this year versus last year when the expense happened to hit in Q2.

Matthew McCauley

And on your question about international, we have definitely seen those two big hurdles, that we can overcome those. Right now we really want to take a very holistic approach on our international plan and there are opportunities in lots of countries and with our focus on Crazy 8, our largest growth opportunity, we want to make sure that we move judiciously and just make sure that we have really flushed out what the biggest bang for our buck is going to be, in terms of the timing.

And so right now we are 100% focused on our Crazy 8 and growing that and making sure we're on track, at the same time educating ourselves on the opportunities internationally and when we're prepared to take that next step we will make sure that we've really thought it through and are really prepared to do that.

Operator

Your next question comes from Dana Telsey – Telsey Advisory Group.

Dana Telsey – Telsey Advisory Group

You're one of the only retailers who's expanding lately. Is there an occupancy difference, whether it's in outlet malls or malls versus in the past, and so are you reaching break-even in profitability quicker with lower occupancy costs and is that what we should see going forward?

Matthew McCauley

On average, yes, we're seeing improved rates on occupancy. In general, you will still see the higher traffic mall, the higher volume malls, and less negotiating power there because the demand is still very high in those locations. But on average, yes, we're seeing improvements in occupancy and lease rates.

And so we have mentioned a couple of times that that's one of the reasons we feel so strongly about this is such a great time to be opening Crazy 8. If you happen to be in a position where you've got cash and positive sale trends, you sure want to open as many stores as you can profitably. So the answer to the question is yes.

Operator

Your next question comes from Dorothy Lakner – Caris & Co.

Dorothy Lakner – Caris & Co.

I wanted to circle back about the synergies you seem to be getting between the outlets and Gymboree, having tried this idea of using Gymbucks to draw outlet customers to Gymboree. Are you concerned at all about cannibalization there, or how are you thinking about this as you move forward?

Matthew McCauley

It's interesting. When we first opened up outlet we were concerned about cannibalizing Gymboree retail stores and didn't really see that happening. And so this idea of starting to distribute coupons in the outlet stores and then drive the redemptions in the retail stores, we're watching it closely.

But the benefits that obviously we seem to be able to help the average trend, while we're discount in the outlets. And then another added benefit is we're getting customers in the retail stores that might not have typically shopped there.

Dorothy Lakner – Caris & Co.

In Gymboree you mean?

Matthew McCauley

That's right. In the Gymboree retail stores, full-price stores. And so we think that overall we're increasing brand awareness, overall we're increasing the benefits for our customers and it's early to say whether or not that's cannibalizing outlet. We feel like net, we're increasing the total sales for both.

We will watch closely but right now it seems to be working very well, to drive average trends on the discount and significantly improve redemptions on the Gymbucks redemption.

Dorothy Lakner – Caris & Co.

And a great way to introduce the outlet customers to Gymboree, if they've been sort of intimidated about going there.

Matthew McCauley

That's right and it’s a perfect way to do because they are value-conscious and if you're shopping with a Gymbuck it's pretty much 50% off.

Dorothy Lakner – Caris & Co.

Obviously you've got a lot on your plate with everything that is going on in the economy but also being able to expand Crazy 8 and now international. But you have talked in the past, also, about wanting to increase the business at Play & Music and there are obviously synergies there with Gymboree, so I just wondered if you could speak to that a little bit.

Matthew McCauley

Just to comment on all the things we have on our plate. Our philosophy has always been to focus on the big opportunities, at the same time we want to be testing things and making sure that we are ready for the next big opportunity, as we feel like our bandwidth opens up. And so that's really what we're doing. We're doing the same thing that we've been doing the last few years, which is focus on the biggest opportunities, keep testing lots of different things to be prepared for the next big one. So that's what we're doing with international, just to comment on that. That's part of education.

And so with the Play & Music, the opportunity there is not just domestic, but also worldwide. We're seeing great growth in China there. Some of the downward pressure is on Play & Music. Obviously selling sites is a little tougher with people unable to get financing. Our focus has been international growth there. Like I said, China is very healthy.

And then the leveraging here. We've still continued to see nice results with our welcome kits, introducing new customers and playing music to all of our retail brands. And then vice versa, using our email list in the Gymboree retail list to notify, communicate new classes, new programs, and new things going on in Play & Music. And we've seen great results and actually seen positive trends in Play & Music despite the challenging headwinds.

Operator

Your next question comes from Brian Tunick – JPMorgan.

Brian Tunick – JPMorgan

Obviously you are in a difficult environment here and a lot of pricing issues, but do you see the core Gymboree returning to the full-price business again at some point and how do you think about what is the right level of difference between pricing at the outlet and that Crazy 8 versus core Gymboree?

Matthew McCauley

The first question about moving more toward regular price. Gymboree has always been more promotional in general with our big events. We have tried to focus our promotions around big events, and that's what we're doing now and just trying to make them bigger.

But certainly, over time, we would like to see the customers come back and not feel like they only have to shop on promotions. But that said, we have found that we have been very successful at driving margin and new customers through our events. Our customers love them and over time I feel like that's become a core strength of ours, to identify things that resonate with the customers and drive traffic.

So yes, over time we would like to see a little bit less promotion and more regular price and I think that will come when the consumer confidence builds up.

But price differentiation between Gymboree and Gymboree outlet, we still target 25% to 30% difference, variance there, and that will continue.

Brian Tunick – JPMorgan

And did you comment about any regional differences you saw in the quarter?

Matthew McCauley

Our strongest regions were starting with the South, the strongest, and Great Lakes, followed by Midwest, South Central, and Mid Atlantic. Some of the tougher areas were Northeast, Southwest and the Northwest.

Operator

Your next question comes from Lee Giordano – Imperial Capital.

Lee Giordano – Imperial Capital

Can you talk more about the opportunity in the newborn business at Gymboree and what do you feel might move the needle more there in terms of sales revenue?

Kip Garcia

We launched a program called Brand New last year and that's targeted at [inaudible] and to create [inaudible] as a destination for gift purchases where in the past it was really a self-purchase for their own kids. And we have really gotten traction on that category and it's an excellent opportunity for us to continue to grow. Both its real estate with stores and on the Web.

The place where I think we have the biggest opportunity in terms of product in newborn is our fashion product in newborn is always at the risk of how strong our baby assortments are. So we are spending a lot of time right now making sure we are clearly differentiating our fashion newborn collections with our baby fashion collections. And we have had some good results, as we've been doing that recently and so we will continue going forward.

Operator

Your next question comes from Analyst for John Morris – Bank of Montreal.

Analyst for John Morris – Bank of Montreal

Could you talk a little more about the learnings from the real estate strategy with respect to new Crazy 8 stores? Specifically, do they still work best in malls where the Gymborees are located as opposed to strip centers.

Matthew McCauley

We have seen a range of success there. We are seeing nice results where we have a Gymboree but typically those are higher volume malls, anyway. But that said, we have seen really nice positive four walls in off-mall locations, because the rents are a little bit lower.

So in general, we are seeing what we expect in terms of the mall traffic, with a few exceptions. It is a lower price point reaching typically a broader demographic, a lower household income. And so we have had a few surprises, but in general it follows what you would expect at the mall level.

Operator

Your next question comes from Marni Shapiro – The Retail Tracker.

Marni Shapiro – The Retail Tracker

You must be so tired of answering these questions so I think I'm going to say congratulations and take everything off line and I hope you give me a call back early.

Operator

Your final question comes from Bill Dezellem – Tieton Capital Management.

Bill Dezellem – Tieton Capital Management

SG&A grew in the second quarter versus the first quarter even though sales were down slightly sequentially. Would you help us understand what the dynamics were behind that?

Blair Lambert

The gross quarter-over-quarter was really only about $1.0 million, I think. It was not particularly large. There are a certain amount of base costs that we incur because we have new stores so you have all those store expenses related to new stores. There is also some incentive compensation that was higher in Q2 versus Q1. And marketing costs were higher in Q2 versus Q1, a carry-over from Q1.

Operator

There are no further questions in the queue.

Jeff Harris

Thanks everyone for participating on the call. Sorry about the communication issues. Any other questions, you can call 415-278-7933. Thank you.

Operator

This concludes today’s conference call.

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Source: The Gymboree Corporation F2Q09 (Qtr End 08/01/09) Earnings Call Transcript
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