J.Crew Invests $125M CapEx in Supply Chain and IT EnhancementsI know this article is a bit on the boring side, but there are a lot of tidbits to be read. First, it is very impressive how much their sales have increased. Great job J.Crew! Second, I am all for upgrading IT services that will enhance the customer's shopping experience.
By Adam Blair
June 3, 2012
J.Crew will invest its $125-$135 million in 2012 CapEx on supply chain infrastructure, including an expanded direct sales distribution center, and IT enhancements that include enabling international shipping for online sales. Both international and direct sales are experiencing rapid growth at J.Crew: direct sales increased 19% during the first quarter of 2012 compared to the same period the previous year. Total revenues for J.Crew increased 23%, reaching $503.5 million.
J.Crew executives see long-term benefits in improving its international e-commerce capabilities. "We're now shipping to 106 countries, and obviously, that is giving us a lot of information in terms of where the demand is coming from," said CFO James Scully during a recent conference call discussing J.Crew's Q1 financial results. "Previously this was anecdotal information, and we're turning it into good analytical information."
The retailer also revealed that it is able to share inventory between its brick-and-mortar and direct channels. "We do use sort of a seamless inventory strategy, where we do share inventory," said EVP of retail and factory Libby Wadle. "But we do buy a separate inventory pool for our direct business and our retail business and then manage in-between as the business demands," she added.
In addition to its supply chain and IT investments, J.Crew will use its 2012 CapEx on 42 new brick-and-mortar stores, store renovations and corporate office expansion. The retailer has already spent $37 million of its CapEx during Q1, which ended April 28, 2012.
Lastly, I found the quote from Libby Wadle super interesting- how J.Crew can share inventory among their channels (brick & mortar and online). So does that mean that prices will match up? Not just sale prices, but regular retail prices too. For example, the Perfect Shirt in Chambray Polka Dot (Item 89276) is currently $88 online and $78 in stores.
What are your thoughts on the IT upgrade at J.Crew? Do you think you will see the improvements? What are your thoughts on J.Crew's ability to match up inventory among their various distribution channels?