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Non-Tech : Gymboree "GYMB" -- Ignore unavailable to you. Want to Upgrade?

To: Quaddad who wrote (67)	11/16/1997 12:23:00 AM
From: JAG	Respond to of 189

Thanks very much for the informative post. Yes, Gymboree is very expensive clothing. I remember (and owned) stock in Gap and Abercrombie when they were also good fundemental buys. You can now purhcase Gap at three times the price that I owned the stock for in August 1995. You can purchase Abercrombie at twice the price I paid in April 1997. Gymboree is one of the most profitable retailers in the United States. Payback on the intial store opening cost, including fixtures and inventory is something like 9 months. Sales per square foot lead the industry. I believe the brand image can be extended to niche overseas markets, and top line growth will continue at 20%. Compare the valuation on this stock to Gap, Abercrombe, and others. The Company deserves a multiple at least equal to 20x earnings, i.e. the growth rate. Buy a certificate of deposit at 5% and you get a PE ratio of 20x without any earnings growth. Valued at 20x this years earnings ending 1/98, then you have a value of $30. Assuming growth of 20% for FYE 1/99 and a 20 PE, the value is $36.