Joan Barnes wanted to meet new moms and that was the inspiration for a place for moms to hang out with other moms.

Dave Young:

Welcome to the Empire Builders Podcast, teaching business owners the not-so-secret techniques that took famous businesses from mom and pop to major brands. Stephen Semple is a marketing consultant, story collector, and storyteller. I’m Stephen’s sidekick and business partner, Dave Young.

Before we get into today’s episode, a word from our sponsor, which is… Well, it’s us, but we’re highlighting ads we’ve written and produced for our clients. Here’s one of those.

[Tommy Cool Plumbing, Cooling & Heating Ad]

Dave Young:

Welcome back to the Empire Builders Podcast, Dave Young here with Stephen Semple, and we’re talking about empires. Stephen just whispered the name of the topic into my headphones, and I recognize it, but I don’t recognize it. I don’t have any direct experience with this other than when I was a little kid watching Romper Room, but I don’t think it’s the same thing. The topic is Gymboree, but it sounds like it’s probably related, but I doubt that it is.

Stephen Semple:

Gymboree is not big any longer. There’s a bit of a sad story on that.

Dave Young:

It was a place though, wasn’t it?

Stephen Semple:

Right, it was, and it was huge at one point. It was part of the culture and it was mentioned in movies. It was a really, really big deal at one point.

Dave Young:

Yeah, here’s the issue. Here’s why I don’t remember it. I didn’t grow up in a place. It wasn’t the kind of place it would have a thing. I think I told you I drove 100 miles on our first date to go to Starbucks at a Barnes and Noble.

Stephen Semple:

It wasn’t even a real Starbucks.

Dave Young:

No, it wasn’t even a standalone Starbucks.

Stephen Semple:

Well, to give you an idea how big it got in 2010, Bain bought the company for $1.8 billion, 1.8 billion, and seven years later it went bankrupt.

Dave Young:

Oh, boy. That’s a bigger story than Gymboree if we wanted to go there. But let’s go go with building the empire.

Stephen Semple:

Let’s go with the building of the empire.

Dave Young:

How many buyout people does it take to ruin a company? Not many.

Stephen Semple:

But here’s the thing that’s interesting about this story. We often talk about this whole idea of unleveraged assets, and unleveraged assets becomes a very, very big part of this story. It’s very, very cool.

The business was founded by Joan Barnes in 1976. She grew up outside of Chicago, studied dance and English in college, and got married. They moved to the West Coast. She’s this new mom in this new area looking for connections, and she started to host these get togethers with parents and kids at a local Jewish center. Joe Barnes, her husband, was a journalist. This journalist background becomes important a little bit later. As I mentioned, they grew up outside of Chicago and they picked up and moved and landed in San Francisco, where he got a job. And then they moved out to a suburb in 1973.

She was basically lonely. 1973 was actually one of the lowest birth years in a long time, and so she was looking for people who had kids. Both of their families, both her family and his family, were back on the East Coast, and so she wanted to meet other moms. At this point, this whole idea of play groups didn’t exist. It was this new idea. And so she was in this dance company and had a friend in the company, and this friend had been offered a job to run activities for kids in a local community center. She was nervous to do it. Joan suggests, “Why don’t we share this idea?”

And so it was a preschool after school programs. Joan went to a local YMCA that had this gym that they had set up called Kindergym, and she went and she checked it out. Everything there was this full-sized gym equipment and they modified how it was being used, but it was like full sized trampolines and full sized this and full sized that. As soon as she saw it, she had this vision of what it could be.

Dave Young:

I mean, there’s nothing funnier than a five-year-old on the uneven bars.

Stephen Semple:

Yeah, there you go.

Dave Young:

I’m just saying.

But go ahead.

Stephen Semple:

So she had this vision: scale down the equipment, make it colorful, add music, lively teacher. This could be something really special, and maybe this is what could be done at the Jewish center. Now, some of the things were available it turns out she found out for special needs kids and the rest needed to be built, so she started to do that.

But here’s the other thing. She knew how to get press to promote this. She had learned from her husband. She created a story of what the plan would be like, and she managed to get this big full page feature article in the local newspaper. In 1976, they opened this Kindergym in the JCC, and it’s immediately this huge success. It’s oversold. They hire preschool teachers to run the program. The goal was for the kids to have fun and let moms connect with other moms. That was the goal.

It’s so successful they open another one...

#245: Gymboree – A 1.8 Billion Dollar Empire