Restaurants Losing Gold Medal; Coal Rules; J Crew’s Tough Quarter
August 21, 2008
Looking Forward to J.Crew's Tough-Quarter Results-Anytime a chief executive has to extend an apology to customers, a company has been going through a difficult period. That’s the state that J. Crew (JCG) finds itself in: the stock fell to a low for the year in Thursday’s trading at just under $25, but has bounced off the low, adding 3% intraday. Don’t take the recovery as some sign of an all-clear, though: heading into next week’s release of second-quarter earnings, analysts are worried that the results are going to look like some unholy alliance of stripes and plaids. Sales growth has been tough to come by, adding an anemic 0.2% for the first couple months of the quarter. Then came July. And things got worse. The retailer undertook a conversion of its Website support system - an initiative that didn’t go so well. Processing times slowed, delivery schedules stretched out, and the system had a tendency to orchestrate the odd anti-consumer initiative - such as throwing items out of the customer’s shopping bag. The downtime for direct sales stretched longer than anticipated, and costs mounted. The problems haven’t all be remedied, analysts said.
I am surprised to see the website issues being mentioned as a reason for the stock price sliding. I feel as though that issue gets barely mentioned, or left as a side note, in the reporting. I am hoping that J.Crew can recover nicely from this all (especially since I bought their stock when it was around $48-ish). :)
Are you surprised by the stock price's steep decline? Do you predict an upswing for the stock price? What are you recommendations to turn things around for J.Crew?
Their stocks went up a bit about two days ago, and I purchased some. Hmm...does this mean I should sell now...
ReplyDeleteI think it will be very tough for them to come back. They barely rode out the last holiday season and with the economy this one will be even rougher. I dont forsee a comeback in the near future.
ReplyDeleteI'm not surprised at all that the stock went down. They have to be losing major $$$ in this website downgrade. Not only are sales not taking place correctly, people are being compensated for all the mistakes. That has to be lose-lose for the bottom line.
ReplyDeleteI don't predict a rebound for awhile. especially as the website madness continues!
I agree with blumre and kater...I think it will be awhile before a comeback, especially if they don't get the website working correctly before the Holiday season.
ReplyDeleteI think they will come back but it is going to take some time for the consumer to trust ordering from JC website.
ReplyDeleteThe consumer will end paying for this fiasco by having to pay fp, JC will, order less inventory, therefore there will be less sales.
Since jcrew has been such a PIA... I just got an email for Ann Taylor, 25% off purchase, on line, in stores, the loft included. I don't know how to post it but can email it to Alexis to post. We can throw our money elsewhere! I wish jcrew would give us such a nice token!! Usually you have to beg for a paltry 15% or set up an appt with some hard to reach PS!
ReplyDeleteAnd what if Madewell doesn't do as well as they are expecting it to, right? That's another thing to factor in...
ReplyDeleteCaw: not to mention that they've been flat out cancelling people's orders! That won't help in terms of their customer satisfaction, which will in turn affect future sales as well...
ReplyDeleteoh yea, the list goes on and on!!! I have been frustrated like all the others (save that for the other thread) So I figure why not help some othe retail company that's higher functioning! However, it's soooo hard b/c Jcrew has it's hold on me as I love their merch much better....
ReplyDeleteWith the American market having a very tough go lately this should not be a surprise. What seems to really 'do' J.Crew in was the infamous "downgrade" of the website.
ReplyDeleteI do feel J.Crew will pull this around and get back to where they should be; but it will take some serious time and work on their part.
Luckily their core customers are very loyal and want what J.Crew does and tends to do well. I expect by next summer this could be water under the bridge if and only if a few issues are resolved.
Shipping, the website and most importantly strong items the buyers want at full pop. If the good are such that we all wait for the mark downs they could be cooked for some time.
Of course it will come back eventually, and then we will read articles with headlines like "j.crew's stunning turnaround". Mark my words! Makes me want to buy their stock today.
ReplyDeleteI just got an email from Talbot's advertising an extra 25% off clearance items, and 25% off boots, to "kick start" my fall. It's tough times for everyone, I guess.
ReplyDeleteFFM
Glad to hear you are okay and surviving the storm!
Sometimes I think jcrew waits to ship the items that people use the coupon codes for... to see if other people order the same items at full price first. All I know is whenever I order something at full price - I get it on time. The stuff I use the coupon codes for either ships very late (at which point most of the inventory is gone) or it never makes it. Maybe it's a coincidence.
ReplyDeleteAnnon 5:40...I was thinking the same thing. In an attempt to prove this conspiracy theory...I just re-ordered an item that got cancelled from an order I placed with the additonal discount last week. I'll be curious to see if it goes through this week without the additional discount.
ReplyDeleteMy prediction is Jcrew's stock will go down in the rest of year. In my opinion, both design and customer service of jcrew did not perform well and will not perform well for the rest of the year.
ReplyDeleteFall and winter are the most important seasons of a year. However, jcrew's design for this fall and winter are not creative. Most designs copied other familiar brand names' items from past seasons (banana republic and anthropologie).
Its information system update can not go any worse. Forget to charge, forget to ship, etc are usual. I guess soon there will be an academia article about jcrew IS failure. This is worse than the bigest IS failure in history, Denver Airport IS. Denver Airport eventually shut down its new system and went back to its old system. I would suggest Jcrew doing the same.
anonymous 5:40: I suspect the same. Therefore, I became smart. I did not use coupon until they shipped my items. I call back and tell them to apply the coupons. That seemed working.
ReplyDeleteOne thing I am still worried. If one item just has one available. Two person both checked out at almost the same time (I think jcrew system became better in this, but still can't prevent all). The order of the customer who place the order late, but order faster shipping, might has her order fulfilled first. The earlier order might get canceled. That is not fair.
This is OT. My friend is getting married in late September. I recommended Jcrew to her for bridesmaid dresses. She ordered her bridesmaid dresses from Jcrew about two months ago. One dress was supposed to ship later than the rest and when she didn't receive it at the time Jcrew specified - she called. Jcrew said it was delayed and that it would be shipping soon. Two weeks go by so she calls again. They say it's been overnighted to her. Two days later it still hasn't arrived. She calls back and waits 45 minutes on the phone for the special occasions department. They too say it has shipped. She then gets an email the next day saying the order has been canceled. She attempts to call back twice but the special occasions department hold time really long. Finally she gets someone on the phone and they re-order the dress for her but tell her it won't ship until the second week in September. So now she doesn't have a dress for one bridesmaid. She ordered them all together in the hopes of making sure she got all of them ahead of time. Absolutely ridiculous. I mean - we all know how bad the website has been and all the shipping problems but when it comes to a wedding you would think jcrew would be a little more on top of it. Why have a special occasions department if they don't understand that its a special occasion?
ReplyDeleteI think the only way they're going to come back is if they decrease their prices a bit. I've been buying J.Crew for 13 years and miss their $20 off an $80 order. They ought to bring it back. It's not the same to get a few bucks off of a $150 purchase.
ReplyDeleteIf JC continues to make major shipping errors (see website issues section), no quality control in their clothing or shipments, having little regard for shoppers personal info (cc, addresses etc), this company will go downhill like the GAP did.
ReplyDeleteElisabeth: I hope you are right. :) I am holding on to my J.Crew stock because I have a feeling that a few years from now, it will show to be a smart investment. :)
ReplyDeleteAnon at 5:56 PM: The Denver Airport situation was bad- really bad. I thought it was so funny that you compared J.Crew to that! ;) But in all seriousness, I agree with you that J.Crew should shut down the new system until its ready. :)
Anon at 6:12 PM: Your friends wedding situation sounds awful. Just awful. I can't believe they wouldn't try to track down the necessary bridesmaid dress after all the hassle she went through with them. :(
I agree with a lot of the comments of the previous posters. However, I do think there is a difference between the situation with Gap vs. J. Crew. While J. Crew certainly has issues with their customer service and website upgrade, these are tangible, specific issues that *can* be fixed (of course, the question of "when" is a different matter :)!). If Mickey and gang put their nose to the grindstone and hammered out the IT solutions, addressed the CS issues with the same bravado he works the media, JCrew will come back on track.
ReplyDeleteWhat I saw/see as the issue with the Gap is that they have kind of lost their way - they lack a cohesive vision of what they want their image to be and their "core customer". While some of us may not agree with the Ideal Customer JCrew has in mind, there is no doubt with me that they have a clear vision of who their customers are. I won't deny it, I'm not their demographic at all (40+, with two kids under 7 y.o.), but do I want to achieve a look similar to those effortlessly elegant gals and guys in their catalogs? You betcha! That's what JCrew sells, in addition to their clothing and accessories - a lifestyle.
So I'm thinking that we haven't seen the lowest of the lows yet, but there will be a turnaround of sorts. (I'm asking my dad, who is a stock watcher, to keep an eye on JCG ;)!)
In response to what I have personally seen, their online system worked about 50% of the time in terms of workable codes, loading my shopping basket etc. They did seem to get my last order out and it should be here tomorrow. I've been billed once (so far LOL!). We'll see how accurate the order is.
BTW, thank you Alexis for giving us a venue to share our love of JCrew, to vent, and to bargain-hunt. This site is truly addicting! :)
I think they'll eventually come back. The website fiasco has gone on WAY too long. Another clothing site I like to visit just had their site change with NO problems.
ReplyDeleteDuring this time, I have placed an order with a PS and had no problems with it. I JUST got it (the skinny patent leather belt in deep peony, great color and belt!) and the charges have not hit. I guess there could be a problem there but hoping there isn't.
I know this thread is not about it, but does anyone find a different between the summerweight and regular cashmere? Is the summer LOTS thinner or just a bit? My store is small and doesn't carry any cashmere except for a scarf or 2. :-(
(OT, but I just got back from J.Crew and I'm reporting on new items.)
ReplyDeleteAround 75% of my local store (Woodcliff Lake) was items from the August catalog.
Some thing I saw in different variations that I never saw online:
-dream herringbone cardi in caramel
-dream herringbone with shiny diamond buttons
New items (that I saw):
-Black classic peacoat
-Peacoat-length coat with one row of buttons
-black and salmon color
-Longer coat, in black, with weird cuffs (tulip?) I remember I saw it last year
-A 3/4 sleeve sweater dress in black
-A short, sleeveless wool dress with a slight empire waist with two buttons (black)
-A gray short sleeved sheath dress
-A chain/circle print silk dress (navy with gold)
-a bunch of graphic tees
-Felted wool minskirts with two buttons on top
-camel, white, black
-A sweater that looked like the Cheshire jacket, open with a neck tie (camel color)
Sale section:
-a bunch of the boatneck dresses in all colors, $60 plus 30%
-waffle tee shirts (fall)- henley, fleur de lis $30 plus 30%
-knee length skirt with the flower pin, $70 plus 30%
-those new tie-neck tees from fall (gigantic! The small would be swimming on anyone.)
Oh, and I also saw the patent tote that Gigiofca described on her blog - it's ADORABLE.
It comes in black, gold, yellow, green, and a really pretty blue. It's $150, so I didn't buy it on the spot,
but I'm strongly considering getting it.
We sort of kept the store open - I don't think the SA's wanted to tell us they were closing.
They were still helpful even though we were the only ones left. One of them was buying a bunch of clothes,
and the other mentioned that whenever they get something new they feel like they "have to buy it out of excitement."
And, they didn't have the new fall catalog - only the August one =(
Anonymous at 8:26 PM: Thanks for the nice words for the blog. I think this site is a bit addicting too! :) I really learned alot from everyone here. :) Also, I agree with you that the issues the Gap was facing is different than the issues J.Crew is facing right now.
ReplyDeleteGap had some serious inventory/styling issues. For awhile in the early 2000's, the Gap would stock too much of the wrong items and not enough of the hot-sellers- causing them to have those incredibly marked down sales. They also opened too many stores.
Where as J.Crew seemed to really fumble (and stumble hard) with its new system/website. The move in the luxe market has yet to be determined whether it is a good or bad move. :)
Sorry, the tulip coat isn't an new item. But now I'm remembering something else - a silky top in that turquoise print (the one that's in a skirt and suiting dress).
ReplyDeleteTo katherined: I saw that tote today too, I am pretty sure! I was trying to look inside the bags for the tags but it was all caught up in the paper in the bag. If it's $150.00 that is a pretty good deal! I wonder if it was leather or not? (again could not find the tag!)
ReplyDeleteOn gigiofca's site she said it was 100% leather, and I think she bought the actual bag.
ReplyDeleteWhat color did you like/see?
katherined - you are correct...the bag is 100% leather and I purchased black. Loving it! :-)
ReplyDelete