J. Crew Blames Software for Its Bad QuarterI apologize about posting another article about their current financial situation. ;) This post was more to let members know that our comments and concerns about J.Crew are being seen and noticed- and I just thought that was pretty cool. :)
By Ben Worthen
August 27, 2008
Most retailers are blaming a slowing economy for their fiscal shortcomings. J. Crew is blaming a botched system upgrade.
The clothing company Tuesday announced that income for the quarter was down 12% from the year-ago quarter to $18.1 million. J. Crew also lowered its per-share earnings guidance for the year to $1.44 to $1.54 from $1.70 to $1.75. The culprit was a project to upgrade the software it uses to process orders from its Web site that went astray, the company said.
The new system went live on June 28, the problems began almost immediately. “We experienced issues related to the site performance, order fulfillment, and call center performance,” Jim Scully, the company’s CFO said on a call with analysts.
Just what did he mean by issues? The site has been down periodically since June, costing the company untold sales and frustrating customers, at least the customers who post on blogs and message boards. And we’ve read reports about botched orders and returns: In one case, a man was charged $9,200 for shipping and handling for three baby-sized shirts – he had ordered men’s medium – and then couldn’t get the Web site to process his attempt to return the goods, according to the man’s blog.
J. Crew said it spent about $3 million in the just-completed quarter to fix the problem, and made numerous public apologies, which J. Crew fan blogs have been tracking pretty closely.
There was a wave of businesses blaming poor results on tech-projects-gone-bad in the early part of the decade. We haven’t seen it much lately, though.
One difference: Nike, Hershey and others that had problems in the past went out of their way to blame the tech vendor. J. Crew never once tried to pass the buck. The company didn’t respond to our requests for comment, which also means we don’t know which company sold the offending technology. You can search the Web for “J. Crew” and “systems” and find the names of several companies J. Crew buys software from, but there’s not enough evidence for us to point a finger.
Wednesday, August 27, 2008
WSJ Article Mentions The J.Crew Aficionada Blog! :)
There is an interesting article over at Wall Street Journal (click here for link) that discusses J.Crew's financial situation in relation to its system upgrade. Among the discussion, there is a link to this blog- how exciting! :)