Dive Brief:

• Gymboree, which went in and out of Chapter 11 bankruptcy last year, is trying to revive its business through a new apparel line and rebrand, launched on Prime Day week, according to a press release.
• Tina Canales, senior vice president and general manager of Gymboree, described in a statement the new assortment of children's apparel as "fun, confident and optimistic, with a focus on quality and comfort." The collection includes jeans redesigned by "denim expert" Carl Chiara. Other items include graphic tees, outerwear, basics and accessories.
• The retailer has also remodeled some of its stores with new designs, point-of-sale features and a "community table." The company has also launched a customer-made interactive mobile app that includes a layer of augmented reality. "We have spent the past year building the team and laying the foundation to meet the expectations of the modern parent and to begin providing a relevant experience in today's retail environment," Gymboree President and CEO Daniel Griesemer said in a statement.

Dive Insight:

This time last year found Gymboree in Chapter 11, driven there by an unsustainable debt load (leftover from its leveraged buyout by Bain Capital) and falling sales. The company was one of 2017's retail bankruptcy success stories, if such a thing is possible. It went in with a plan and exited a few months later, shed of a good chunk of its store footprint and hundreds of millions of dollars in debt.

But Gymboree's long-term challenges are steep, and a tweaked assortment and rebrand will likely only get the company so far. Consider one of its most fearsome rivals in the sector, The Children's Place. That company didn't sit back on its heels while Gymboree closed more than 300 stores last year. Rather, the retailer developed digital marketing tools to specifically target customers in areas where Gymboree ceded stores. And the tools appear to have worked.  

By the third quarter last year, CEO Jane Elfers said that 135 Children's Place stores that were located in the same malls where a Gymboree closed "outperformed the fleet" as a whole, according to a Seeking Alpha transcript of the call. Elfers has said more than once that she anticipates her stores making $150,000 in annual sales volume in locations near closed Gymboree stores, with those stores doing 2% better than the fleet as a whole.

To watch the performance of Children's Place and Gymboree is to witness two retailers on seemingly opposite trajectories as they fight for their piece of the $35 billion children's apparel market. One undertook a massive turnaround to focus its operations and brand, and to prepare for the next era of retail. The other — burdened with debt — fell behind in e-commerce, tried to put a foot in every sub-market and was forced into bankruptcy as interest burdens caught up with sagging sales.

The Children's Place has continuously rationalized its store portfolio and methodically pushed into digital sales, including through Amazon. Susan Anderson, analyst and senior vice president with FBR, told Retail Dive earlier this year that when Elfers arrived, Children's place was "running spreadsheets" to manage its inventory. "They didn't even know what was at the stores." Along with upgrading IT systems and developing tools to determine their inventory needs, the retailer got smarter about inventory. Where merchandise before was "piled high," now it's "lean and clean," Anderson said. "It's night and day at the stores."

Along with Children's Place, Gymboree also has to compete with Target, which has introduced new children's private label lines, as well as Walmart and Amazon, among many others. Observers and analysts have said that the company has been trying to do too many things, and has cannibalized its own business through its discount chain Crazy 8.

Marshal Cohen, chief industry advisor with the NPD Group, told Retail Dive this spring that Gymboree needs to make some "keen shifts to become more competitive again. They have some work to do to introduce themselves to the new wave of moms…which is a challenge and a blessing."