Gymboree and Gene Simmons
I wouldn't short Gymboree or Gene Simmons!
We had Matt McCauley, the Boy King of Gymboree (GYMB) on Fast Money last night for a special one on five with me and the rest of the crew.
The take-aways from meeting the CEO of Gymboree:
- McCauley is a sharp guy. Quick on his feet, focused, in touch with his business. Considering he's only 33, he's the kind of guy who could really be annoying... if he wasn't quick on his feet, focused, etc.
- Gymboree is in transition. While I'm openly impressed with what he's done with Gymboree so far, I'm concerned about the stock making it through what seems to be a year of consolidation. Gymb is up against high-teens and 20 Same Store Sale comps in April and May and has guided to more or less flat comps for the quarter. That's dangerous, unless Matt is sandbagging the estimates.
- McCauley knows how to CEO. Since it's at least 1/5 my television show, and since the network actually sort of encourages me to behave however I want at this point, I asked Matt point-blank if he was "sandbagging the Street with this flat comp forecast... just between us" (I've always wanted to do that on live (to tape) television).
McCauley responded that he wasn't intentionally downplaying the sales forecast. For what it's worth, I still suspect he is, at least a little bit. He's a good CEO and that's what good CEO's should do.
- The Bottom Line: I'm still not a buyer of the stock but I could be convinced if 1) Same Store Sales can hold at +5% or more; 2) We see signs that the Play & Music division is generating synergy (rather than being a distraction); and 3) The expansion plans stay rational.
Watch March SSS. They are Gymboree's last easy comp for a while. Easter is "early" this year (April 8th) and it's a big holiday for kids' wear. If Gymboree's late 2006 swoon was just a hiccup we'll start to see it in the next few weeks.
Rockstar in the House
We also had Gene Simmons, the lead singer of legendary rock group Kiss, in the studio last night. His motivation was to promote the second season of "Gene Simmons' Family Jewels" on A&E. Our motivation was that he's Gene Freaking Simmons and he was willing to come on our television program.
Kiss was and remains a groundbreaking group in terms of promotion and merchandising. Their product is at least as much Aura as Music and the guy is an absolute wrecking ball of shamelessness about that fact and his mission to sell. I told him, on air, that I'd been a member of the Kiss Army since 1978 (or at least I was... I haven't paid my dues in 30 years but I haven't gotten any discharge notices, either). Gene responded by asking me if I had a Kiss Visa card.
I don't know how, or even if, I can get a Kiss Visa card but I know I want one.
Other takeaways from meeting the CEO of Kiss:
- Did I mention his focus? Here's a transcript from Gene's introduction to Gymboree's Matt McCauley:
McCauley's People (CEO's generally have "People," especially when doing TV): "Mr. Simmons, meet Matt McCauley. Matt's the CEO of Gymboree, a kids' clothing company that has a division teaching kids music..."
Gene Simmons Himself (Gene Simmons also has people but they don't seem to be allowed, or are at all required, to speak when Mr. Simmons is in the room): "I'm the CEO of a multi-million dollar company myself. Little organization called Kiss with a division called Gene Simmons!"
- Gene Simmons invests for the long-haul. "Your show is called Fast Money but that's a misnomer. You guys have made money investing so you know that. Good investments take time to work and you gotta stick with 'em."
- Gene Simmons does not break character. He's a rock star/business man. I didn't really know how those two would fit together until I saw him discuss his promotional schedule and financial deal for the A&E show while simultaneously inviting our make-up woman to dance on his lap.
He gets away with it because he's Gene Freaking Simmons. No offense was taken. Indeed, we all would have been vaguely disappointed had he not acted like a walking Id impulse. He's 100% rockstar but he's been so successful, over such a long period of time, that it's hardly a reach to say that we could all learn a little something from his example.
Gene Simmons: Built to Last
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