J.Crew's Sales Picked Up Last QuarterOver at MarketWatch (click here), they share:
After a whole lot of markdowns, J.Crew says it has a better handle on its inventory levels.
By Eliza Brooke
September 5, 2014
While J.Crew's creative team is busy preparing for the brand's Fashion Week presentation on Tuesday, its business execs had some pleasant news to report on Thursday afternoon. Sales picked up for the brand in the second quarter of the year, with revenue increasing 12 percent to $627.2 million — this after a season of markdowns that wound up damaging J.Crew's business. Overall, the first half of the year saw 9 percent revenue growth.
On the company's earnings call, execs said that while inventory is still higher than they would like it to be, the percentage of spring and summer product still in stores is lower than it was at this point last year. So, according to them, inventory composition is "healthy."
As might be expected, direct sales are growing at a faster clip than in-store sales — that would be 14 percent ($173.6 million for the second quarter) and 11 percent ($443.5 million), respectively. Comparable company sales also improved over the course of the first half, up 1 percent for the half following a 4 percent rise in the second quarter.
J.Crew Group profit declines 38%
September 4, 2014
J.Crew Group Inc. said its second-quarter profit fell 38% as the privately held retailer posted higher revenue amid increased expenses. The retailer... said same-store sales rose 4%.
For the quarter ended Aug. 2, the company posted a profit of $10.8 million, compared with net of $17.5 million a year earlier. Revenue rose 12% to $627.2 million. The company saw an increase in the cost of goods sold as well as in general and administrative expenses. ...
Well mixed news for J.Crew but at least they are getting a handle on their inventory. I know we have talked a lot about this topic before (click here). It's good to see J.Crew taking the right steps necessary. I am also curious to see how well they manage the Spring and Summer inventory now that we are transitioning to Fall and Winter.
Speaking of which, I thought Teacups (in this post), had an interesting take on the situation:
I probably haven't been around the JCA community long enough to recognize if this lull or inactivity is from a collective "crewed out" experience or if it is part of a cycle. For me personally, I would say the current malaise is largely a result of the depressing feeling of visiting the jcrew website. I recognize that they are not the only retail clothing manufacturer who has gotten caught with far too much inventory, but there has to be a better way of managing it than letting items sit in the sale section for the rest of eternity. There has to be some time limit. I don't know if the magic number is 4 months, six months or whatever. I do know that looking at the sale section hovering at about 2000 items makes me not want to even begin to look through it. When you find items you have sitting in your closet languishing month after month, you are less likely to want to wear it or purchase more items which are likely similar. And I love a sale. I just feel like they Jcrew needs to take the hit and move on before all of the joy is gone and I become less interested in the site and the store. I have not given up yet but they need to hurry.I love J.Crew sales! It is always exciting to see that coveted item get marked down, and make its way to the home closet. However, there is an abundance of merchandise sitting in the sale section from last year. Just lingering a lot longer than usual, without any additional mark down. As a result, I have been finding myself checking out the sale section less frequently too.
What are your thoughts on J.Crew's performance? What do you predict will happen with their inventory issues moving forward? Do you think J.Crew can reverse their issues?