The following are excerpts of an article from Business Week (there is a lot of good stuff, click here to read in its entirety):
The J.Crew InvasionI thought this article covered a lot of great topics. Some that made the top of my list: (1) That J.Crew stands by its product and nothing falls apart. HA! Yet, in the same breath they will gladly replace items that do. HA! HA! (2) Jenna does not design for herself. I respectfully disagree with that one. Did they forget the Jenna-clones for the models used at Fashion Week (and even the MasterCard commercial)?
By Emma Rosenblum
November 27, 2013
Dozens of shivering British fashion bloggers, TV personalities, and socialites snake down London’s Regent Street, waiting patiently to get into the Nov. 6 opening night party for the J.Crew flagship store. ...
...Lyons says there was talk of tweaking the collection to be more British “for maybe five seconds,” but “we have a point of view. We felt good about exporting what we were currently doing.” That includes everything from hair elastics to hand-knit Fair Isle sweaters to $1,800 embellished jackets. The vibe is casually stylish, cool yet cheerful. Perfectly American. ...
Back in the store the next day, Drexler, sitting on a couch in the women’s shoe area, is thrilled to talk about the transformation of his company from sweater catalog to the kind of international brand that draws A-listers on a chilly London night. “The party was below-the-radar cool,” says Drexler. “They all looked good. Oh my God, if we could look like that!”
Drexler, 69 ... is constantly doing his own market research and pauses to greet some VIP shoppers. “How do you like the new store?” he asks. (Everyone loves everything, which seems to disappoint him.) “The interesting thing about apparel and clothes is that it’s emotional,” he continues. “People’s emotions can change quickly. And the advantage we have in coming to London now is that it’s not J.Crew how it used to be. It’s J.Crew. It’s brand new. Oh my God!”
...With prices hovering above fast-fashion chains such as Zara (ITX:SM) and H&M (HMB:SS) but below designer lines such as Alexander Wang and Thom Browne, J.Crew has found a lucrative niche as an aspirational destination for younger shoppers and the go-to store for wealthy customers seeking wardrobe staples. “I don’t want to risk being arrogant, but I think a lot of what we’ve done has connected emotionally with America,” says Drexler.
...The words that Drexler and the president of the J.Crew brand, Libby Wadle (who heads merchandising and buying), use to describe the company’s international strategy are “thoughtful” and “careful.”
J.Crew rolled out shipping for online purchases in more than 100 countries last year, but the U.K. stores are its first physical outlets overseas under Drexler. He’s planning two stores in Hong Kong next spring. In addition to the Regent Street flagship, there’s a women’s boutique in the upscale shopping area of Brompton Cross, selling the higher-priced J.Crew Collection, and a men’s shop on Lambs Conduit Street that specializes in suiting. “We’re not flooding the markets. We’re not out to become a mass brand,” says Wadle, 40, who worked with Drexler at Gap and has been at J.Crew since 2004. “And so we’re putting a lot of pressure on the stores we are doing to succeed.”
...Lyons has made it less so. “Style is for everyone,” she says. “We don’t talk down to our customers.” The ethos of J.Crew is design plus value; the cashmere is made in Italian mills, but costs less than at Bloomingdale’s. Nothing falls apart. (If it does, the salespeople will happily replace it.) The post-2008 demand for value coincided with a resurgence in buying made-in-the-USA products and supporting local manufacturing. J.Crew smartly began beefing up its In Good Company offerings, which include American heritage brands ...
...Lyons’s influence is everywhere. Sitting at a large table in her office, which is white and airy and piled with sketches, she talks about her role at the company. “At the end of the day, all I really want is for people to be excited about clothes,” she says. ... Lyons is J.Crew the way Diane von Furstenberg is DVF; her own image is so intertwined with the clothes she creates that it’s hard to separate the two. Yet she says she’s not necessarily designing for herself. “You want to love what you make,” she says. “I don’t wear shorts, but we design lots of shorts. I can have a really robust dialogue about shorts!”
...“This is not a store for college kids anymore. That woman over there—look,” Drexler says, pointing at a middle-aged shopper in the shoe section of the Regent Street flagship. “She’s buying three pairs of £375 leather ankle boots. They’re made in Italy, and designed by us. We take it from our costs directly, so there isn’t a double markup. These would be twice as much at a department store,” he says. The gray boots, with their sleek shape and pointed toe, do look a lot like a Manolo Blahnik version that sells at Barneys New York for $1,055. But to buy the same J.Crew shoes in America, customers pay only $375. Many items in the Regent store and on the U.K. website are priced the same in pounds as in U.S. dollars. With the exchange rate at $1.60 to the pound, cute ballet flats cost 40 percent more in the U.K.
Drexler has gotten some flak for the jacked-up British prices: “Shoppers shocked as Michelle Obama’s favourite brand J.Crew lands in UK … at double the price!” read a Nov. 8 headline in the Daily Mail. “Prices are different from country to country. I’ve been coming to Europe for decades, and it’s always been that way,” says Drexler. The bad press doesn’t bother him. “Opening international stores enormously helps your domestic business. Because then customers will buy even more when they come to America, because it’s cheaper,” he says.
...J.Crew is deep into its leasing negotiations for the two planned Hong Kong stores. The brand has some experience in the city—last year, it began a collaboration with upscale department store Lane Crawford, displaying J.Crew merchandise in a store-within-a-store format. Drexler says that venture “did really well, though I can’t tell you the numbers, ’cause then you’d have to report them.” His executives, however, seem more measured about J.Crew’s move into Asia.
(3) J.Crew has moved away from college students: I could not agree more. They do offer a student discount, but I don't know too many college students who can afford J.Crew today. In all fairness, they have done a great job differentiating themselves in terms of offering "classics with a twist". Yeah, they stray away with some questionable pieces, or some head-scratching company moves, but for the most part they offer styles I am interested in.
(4) I am glad they addressed the international price mark ups. It is amazing to see such an increase in prices, but offering an explanation (the reasoning behind it) helps a bit. Plus, I could not agree more that it helps domestic sales.
What are your thoughts? Do you agree or disagree with any of the points made in this article?