"Thanks!" to Lynn who let us know about some recent J.Crew news over at Barron's (click here). According to Fly On the Wall (a site that recapped the Barron's article, click here to read):
J.Crew CEO sold half a million sharesBarron's reports from September 1-3, the CEO if J.Crew Group Millard Drexler, sold 500,000 shares for $16.2M, an average of $32.58 a share. The sales were made indirectly through trusts, through which he continues to own 2.9M shares. He also owns 110,000 shares directly.
In the last 12 months the stock gained 12.7%, while peers tracked by the Dow Jones Apparel Retailers Index tumbled 7.3% and the overall market slumped 21%. Most of the rise is attributed J.Crew's thrust into the spotlight during the 2008 presidential election, when style icon Michelle Obama wore the brand.
Drexler's sales came just after J.Crew reported better-than-expected Q2 profits on August 27. Lon Juricic, president of StreetInsider.com, notes that he's "not concerned" about the sale, given Drexler's record of accomplishment during the recession. However, Juricic notes that for those wondering if the stock is range-bound after rallying so significantly, Drexler's move doesn't indicate more upside.
Also, there was another article (click here for the article in its entirety) that mentioned the following:
InvestorSoup.com issues Technical Trading Outlook for J.Crew Group Inc.By emailwire.com
September 08, 2009
...J.Crew Group Inc. (JCG) is an apparel and accessories retailer. The Company promotes itself as embracing a high standard of style, craftsmanship and quality. JCG identifies its customer base as primarily affluent, college-educated and professional and fashion conscious women and men. As of August 27, 2009, the Company operated 242 retail stores (including 216 J.Crew retail stores, nine crewcuts stores and 17 Madewell stores), the J.Crew catalog business, jcrew.com and 78 factory outlet stores.
In the report, the analyst notes:
“Many U.S. retailers have reported concern over the health of the 2009 back-to-school shopping season (mid-July to mid-September) as consumer spending remains low due to continued concerns over the economy and job security. Retail apparel sales figures for July were sluggish as consumers funneled their spending on necessities, and lower inventories across the industry led to fewer markdowns. However, on August 18, 2009, BMO Capital Markets analyst John Morris reported that JCG is positioned to capture market share from department stores during the season. Morris noted that JCG’s business for the season was off to a strong start because it managed to differentiate itself from the competition and offer ‘trend-right’ merchandise.
“When discussing the Company’s outlook for the three months ending November 1, 2009, Millard Drexler, JCG’s CEO, said that the current strategy was to build its product rather than cut costs in response to market conditions. Drexler said that selling unique goods was the Company’s prime objective as consumers continued to purchase products that they liked at full price." ...
Some very interesting tidbits from both articles!
What are your thoughts on Drexler's recent sale of stock? Any of the points made in the article (e.g. who the target customers are, how they are differentiating themselves, etc.) that you found interesting? Do you think that J.Crew is properly executing the strategy of building product to sell unique goods? :)
J Crew has to fix their declining quality problem, and make sizing more consistent, if not it will come back at bit them in the a_s!
ReplyDeleteI agree with casual-crew. I am constantly amazed when I see J.Crew items IRL...I just cannot honestly believe the prices they are charging for some of them. Definitely not worth it, IMO...especially since there are so many other retailers offering similar styles at better prices.
ReplyDeleteI agree with the previous posters...and I also think that in addition to JC's quality declining in some items, they have lost some of their edge in staying slightly ahead of the trend. So when I see another company picking up on what JC had done so successfully in the past (the ruffled collar, the cashmere in bright colors, the tailored "boy" items, etc.) for less money, higher quality, and with better customer service policies, I go to the other company.
ReplyDeleteAnd even if I don't buy 1. I know styles will be readily available somewhere else, so it lessens the pressure to buy from JC 2. I think twice before plunking down money at a place that doesn't seem to care as much about the customer in this economy. Shake up the designs/fabric/colors a bit; add some purchasing incentives and maybe we can get excited again!
Some seasons I get pretty excited about J.Crew product offerings but lately that isn't the case. As some have mentioned, other retailers are offering similar styles at better prices and the quality is comparable. J.Crew has had a distinct decline in quality and trying to "train" people to purchase at FP is not going to work as we see a number of recent releases already in FS. If they offered a promo on FP merch then maybe there wouldn't be so much of it in FS.
ReplyDeleteJ Crew already trained me to watch for the promotions, and I guess I am too old to be retrained.
ReplyDeleteAlthough they have had several items recently that I love, I have managed to get equivalent items from other stores that are better quality and in some cases more edgy at a better price.
I will pick up a couple of must haves at J Crew (at full price, if necessary), but they won't be my primary store if their quality doesn't improve to justify the price.
When J Crew decides to let go of ruffles a bit, then we'll talk about being 'trend right.' They've been on ruffles for quite some time now...not just this past year. I've been so irritated with them in the past few days. I may end up on the ban wagon for the rest of the month.
ReplyDeleteThe mens line continues to be strong and consistent; at least in my opinion. Female friends complain of the sizing issues and some of the quality problems.
ReplyDeleteAfter being disappointed in cashmere I've had my cashmere fix elsewhere where the quality is much better. Other items have been great, but just not the cashmere.