US SMALL/MIDCAPS-Gymboree lifts apparel stocks

Gymboree Corp (GYMB.O) was a stand out in an otherwise thinly traded small and mid cap market on Monday after the specialty apparel company said it would sell itself to buyout firm Bain Capital Partners.

The $1.8 billion deal drove interest in the specialty retail sector as investors bet other deals may be in the pipeline. Gymboree's shares rose 22.4 percent to $64.83 and the S&P small cap apparel index .6GSPRETA gained 3.8 percent.

"Specialty apparel companies usually have a lot of cash-flow and the brand equity is also something that is quite difficult to start from scratch," said Betty Chen, who covers specialty apparel companies at Wedbush Securities. "If you buy a strong brand like Gymboree, that is compelling."

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- Posted: 2010-10-11 17:17:41

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