1. Go to the next room: The thief will run away and you'll find yourself in the next room.
2. Talk to the gym trainers: There are two trainers in this room. Talk to them to challenge them to a battle.
3. Defeat the trainers: Once you defeat the two trainers, the door to the next room will open.
4. Reach Misty: The next room is where you'll find Misty, the gym leader, and you can finally challenge her for the Cascade Badge.
Important Note: The thief is not a crucial part of the game's progression and doesn't actually steal anything. His appearance is simply a minor distraction before the main battle with Misty.