San Francisco, Calif., December 15, 2008 -- The Gymboree Corporation (Nasdaq: GYMB) announced that at the request of management, the Compensation Committee of the Board of Directors has approved immediate salary reductions for senior management of ten to fifteen percent. In addition, effective January 4, 2009, the Company will implement broad-based salary reductions of up to ten percent for the senior field management and corporate staff.
"Our management group prides itself on being aggressive, being prepared and holding ourselves accountable," said Matthew McCauley, Chairman and Chief Executive Officer. "While the financial position of the Company remains strong with over $100 million in cash and no debt, the salary reductions we are implementing are just a piece of a broader strategy to be prepared for next year and position ourselves to come out of the current downturn an even stronger Company than we are today. Our current sales trends are in the range of our previous guidance, but there is clearly weakness in the consumer sector and we expect further deterioration in the consumer markets. While it is too early to provide formal guidance for fiscal 2009, based on our expectation of continued weakness in consumer spending, we believe that our 2009 earnings will be below 2008 levels even after implementing our expense reduction strategies."
About The Gymboree Corporation
The Gymboree Corporation's specialty retail brands offer unique, high-quality products delivered with personalized customer service. As of November 29, 2008, the Company operated a total of 884 retail stores: 617 Gymboree® stores (588 in the United States and 29 in Canada), 117 Gymboree Outlet stores, 113 Janie and Jack® shops and 37 Crazy 8® stores in the United States. The Company also operates online stores at www.gymboree.com, www.janieandjack.com, and www.crazy8.com. The Company also offers directed parent-child developmental play programs at 594 franchised and Company-operated centers in the United States and 30 other countries.
The foregoing paragraphs contain forward-looking statements relating to anticipated sales and future financial performance. These are forward-looking statements for purposes of the safe harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results could differ materially as a result of a number of factors, including increasing levels of unemployment and consumer debt, extreme volatility in the financial markets, current recessionary economic conditions, customer reactions to new merchandise, service levels and new concepts, success in meeting our delivery targets, the level of our promotional activity, our gross margin achievement, our ability to appropriately manage inventory, general economic conditions and effects of future embargos from countries used to source product. 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, including our annual report on Form 10-K for the year-ended February 2, 2008. These forward-looking statements reflect The Gymboree Corporation's expectations as of December 15, 2008. The Gymboree Corporation undertakes no obligation to update the information provided herein.
Gymboree, Janie and Jack and Crazy 8 are registered trademarks of The Gymboree Corporation.