Gymboree Bonds Fall as Chief Financial Officer ResignsAdam Janofsky
Gymboree Corp.’s bonds dropped to their lowest level in more than a month after the company’s chief financial officer resigned.
The company’s $346 million of 9.125 percent notes due December 2018 fell 2.9 cents to 63.5 cents on the dollar for a yield of 22.7 percent at 11:52 a.m. in New York, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.
CFO Evan Price’s resignation will take effect July 24, according to a filing today with the U.S. Securities and Exchange Commission. Lynda Gustafson, a senior adviser to the children’s program provider and apparel retailer and a former corporate controller, will serve as the interim CFO, a position she also held from January 2012 to January 2013.
Price is leaving San Francisco-based Gymboree to “pursue another opportunity,” according to the filing.
Allison Malkin, a senior managing director at ICR Inc. In Norwalk, Connecticut, which handles Gymboree’s investor relations, declined to comment on the move, saying the company does not discuss personnel matters.
The bonds dropped to record lows this year, bottoming out at 61.8 cents on the dollar on May 22. Gains made in June, fueled by first-quarter results that surpassed analysts’ forecasts and the company’s announcement that it would have sufficient liquidity to service its debt in fiscal year 2014, have almost entirely eroded.
The company has also been struggling with online competition, falling traffic at the shopping malls where most of its stores are based, and a U.S. birth rate at record lows.
Gymboree’s senior unsecured notes are rated Caa3 by Moody’s Investors Service, a grade that denotes “very high credit risk.” The company has $1.1 billion of bonds and loans outstanding, according to data compiled by Bloomberg.