Madewell Store Opening & Article!

"Thanks!" to Sarah, as well as Hexicon (in this post), who not only let us know about a new Madewell store opening, but also shared a great article from the Seattle Times (click here to read in its entirety) with us.

J.Crew opens new Madewell store in University Village
By Amy Martinez and Melissa Allison
July 29, 2010

Millard "Mickey" Drexler puts a hand over his heart and sighs, "It's like giving birth." The chief executive of J.Crew Group then walks through double doors propped open by large, old-timey spools to check out the new Madewell store at University Village in Seattle.

"It feels really good," Drexler says, surveying the store's weathered wooden floors and exposed ceiling. "It's a great vibe."

J.Crew Group, a clothing company built on preppydom, now wants to sell trendy young women on Madewell, a funky denim brand that got its start as a New England workwear line during the Great Depression.

The new U-Village store marks the J.Crew offshoot's first Northwest location and 18th in the U.S. With 3,400 square feet of space previously occupied by Talbots, Madewell joins Apple and J.Crew along a stretch of stores that will soon include a new Free People clothing shop and Pandora jewelry boutique.

In town for Tuesday's opening, Drexler was pleased to learn the store's designers had used old lockerroom baskets from Garfield High to display white Bensimon sneakers. "That's what we do," he says, enthusiastically. "That's exciting to me. No detail is too small in our business."

A table near the front entrance was covered with slouchy denim shorts for $59, lace-up oxfords for $198 and straw fedoras for $40.

Madewell's arrival to the Northwest comes amid lingering fears of a double-dip recession. Rather than low prices, Madewell promises flattering fits and close attention to detail. It's a strategy better suited to an uncertain economy than might be apparent, according to retail consultant Paco Underhill, who has written a book titled "What Women Want: The Global Marketplace Turns Female Friendly." "We want fewer but better things," Underhill says. "Almost all of us have bought a bargain brand and found that it wasn't such a bargain after all," meaning it fell apart after a few washes or otherwise disappointed.

Drexler's ability to predict what people will want to wear in six months to a year has earned him the nickname "merchant prince" on Wall Street. He's credited with resurrecting Ann Taylor, turning Gap into a mega-chain, and making J.Crew hip again. His rise and fall at Gap is legendary: Drexler, 65, took the company from $400 million in annual sales to $14 billion and from 450 stores to more than 2,000 over 19 years before being abruptly fired in 2002.

A year later, private-equity firm Texas Pacific Group tapped him to fix J.Crew. Under Drexler, J.Crew has gone from an annual loss of about $40 million to a profit of more than $120 million and grown from 196 stores to nearly 330. Its footprint includes a new bridal shop in Manhattan and about 10 Crewcuts children's clothing stores.

J.Crew weathered the recession better than many competitors partly because of its popular layered look— worn-in chinos, embellished T-shirts and cardigan sweaters. (It also got a boost from Michelle Obama when she wore a J.Crew outfit on "The Tonight Show With Jay Leno" in October 2008.) The New York-based company made a profit of $123.4 million in 2009 after sales rose to $1.58 billion from $1.43 billion in 2008.

"I think most people have always been value-sensitive. Long-term, that's the way you survive," Drexler says. After expanding its number of full-price stores by 17 last year, J.Crew Group plans about 10 additional locations this year, including three new Madewell stores.

Drexler bought the Madewell name from a defunct New England clothing mill in 2002 and leased it to J.Crew for a dollar. When J.Crew opened the first Madewell store in Dallas four years ago, pundits compared it to Drexler's creation of Old Navy for Gap— the clothes were casual and priced 20 to 30 percent below J. Crew's.

Today, the Madewell brand is more vintagey in feel and similarly priced as J.Crew. The company plans to open as many as 15 new Madewell stores next year, ushering in a new era of growth for the denim-based offshoot— and perhaps a profitable one.

"When you're building a new business, you make an investment in the organization and structure," Drexler says. "And you need 'x' amount of stores to cover the overhead." Madewell lost $2.9 million on a pre-tax basis in the first fiscal quarter, a slight improvement from its year-ago loss of $3.8 million. "Usually, you don't see a concept become profitable until it hits about 100 stores," says Betty Chen, a retail analyst with Wedbush Morgan in San Francisco, who likes Madewell's chances for success.

"It's not another J.Crew," she says. "There's a lot of differentiation, and we're not worried about cannibalization between the two brands."

During his walk-thru of the Seattle store, Drexler watched as a young woman tried on a blue blazer over her white summer dress. "She's adorable," he says, flanked by a team of merchandisers, designers and salespeople, all of them nodding in agreement. "See how cool she looks."

Later, Claire Driscoll, 19, of Seattle, left Madewell with two bags full of merchandise, including the $168 blazer that Drexler saw her try on. Among her other purchases was an $89.50 pair of dark-wash skinny jeans. "I've been a big J.Crew fan, but I really like Madewell because it's fun and current," she says. "And it's good quality, so you don't have to worry about it falling apart."

It's nice to see in print what most of us knew— that Madewell is *not* a lower priced version of J.Crew. Madewell really does have its own unique vibe, that translates into a different style than J.Crew. I will admit, a few pieces from Madewell's collection catches my eye (especially some of their blazers). However, nothing grabs my heart like J.Crew!

And how cool is it that Mickey showed up for the walk-through!?! Not a lot of CEOs are as hands-on like Mr. Drexler and show up for a store opening.

What are your thoughts on the article? Disagree or agree with any of the points made? How do you see Madewell?