New Formats on J. Crew Agenda
By David Moin
Friday, June 06, 2008
NEW YORK — J. Crew Group wants to discover what's cool and unique and break out new formats for selling the goods, Millard "Mickey" Drexler, chairman and chief executive officer, told shareholders Thursday.
"We are trying to be world curators, in a sense," Drexler said during the firm's annual meeting at the Gramercy Park Hotel here. "Our goal is not to be the biggest. It's to be the best. But as we get bigger, we spend more time on smaller things. Whatever we do is for the long term, although we get measured quarter to quarter."
Drexler outlined a 2008 agenda that includes:
- The first J. Crew freestanding men's store at 235 West Broadway in SoHo opening in mid-summer. The 1,200-square-foot space has a two-year lease, and J. Crew is searching for a bigger and more permanent site in lower Manhattan. It will be followed by a unit in Garden State Plaza in Paramus, N.J.
- The first women's Collection store on 79th Street and Madison Avenue is to open in August.
- The "Just Ask" program for enhanced service is being rolled out. It started at the Rockefeller Center store three weeks ago and offers experts trained to help customers with everything from arranging alterations or appointments with personal shoppers, to getting fabric swatches for bridesmaid dresses.
J. Crew features a growing assortment of brands and exclusives from around the globe, without the J. Crew label, which for about the past year have been appearing in the retailer's catalogues, online and in the stores. Red Wing men's boots from Minnesota made its debut at J. Crew last winter. Globe Trotter luggage from London appeared in the June catalogue and exclusively designed Selima sunglasses launched this spring.
Vintage Timex watches made exclusively for J. Crew will launch in August, and in the past, Land Cruisers and Jorg and Olif bicycles could be purchased by special order direct from the manufacturer.
"Whether it be special luggage, vintage watches, old cars, vintage work boots, very cool straw hats — when something strikes our fancy as 'wow,' or as very cool, and there's not a lot of it around, we just think it's fun to include in the assortments," Drexler told WWD. In addition, the company conducted its first trunk show this week, a two-day event for the Crewcuts kids' division held in an Upper East Side town house. Future trunk shows for Crewcuts or other categories are possible.
Drexler also updated progress at the two-year-old Madewell division, which he considers a work in progress. Madewell will launch e-commerce in July and soon open two stores on Boston's Newbury Street and on Greenwich Avenue in Greenwich, Conn. Six are up and running.
The $1.4 billion J. Crew has a strategy to go after the designer customer, with quality comparable to designer goods, prices that are much lower and with styles and items that are scarce. Drexler wouldn't put a figure on how much volume the company does with products bearing labels that aren't J. Crew. It is a small but growing percentage.
"To be cool today, you don't really have to spend a fortune," he said. "As importantly, the world is always looking for scarcity. As designers get bigger and bigger, they get less special."
"We are seeing a lessening of what we consider special and unique, people are constantly on the hunt for special. If you don't create or innovate, you basically move backwards" Drexler said. "We're getting behind what we think is cool."
The retailer last month reported first-quarter net income up 23.7 percent to $30.5 million, or 48 cents a diluted share, compared with $24.6 million, or 39 cents, in the first quarter of fiscal 2007. However, due to concerns about the economy, some slowing of comp-store sales gains and resistance to summer shorts and T-shirts, the company now projects diluted earnings per share in the range of $1.70 to $1.75, compared with its previous guidance range of $1.85 to $1.87.