Mickey Drexler Steps Down as Chief of J. Crew, Ending an EraSo many thoughts... First and foremost, it is a bad economic time to be a brick and mortar retailer. Malls are facing a lot of empty store fronts. Online consumerism is winning based on best prices. J.Crew faced that issue like all other B&M retailers.
By Vanessa Friedman and Julie Creswell
June 5, 2017
“As chairman and an owner of the company, it is my responsibility to focus on the future of J. Crew and find the right leadership to execute on our strategic plans,” Mr. Drexler, 72, said in a statement. “Jim has a proven track record of pushing for innovation.”
Same-store sales at J. Crew have fallen in 11 of the last 12 quarters, and the company shut its bridal business last year. In March, J. Crew, which is backed by the private equity firms TPG Capital and Leonard Green & Partners, said revenue fell 2 percent, to $695 million, during the three-month period that ended Jan. 28. In April, it announced plans to eliminate 150 full-time positions.
The retailing industry is now full of prominent brands that have struggled to adjust to consumers’ changing shopping patterns.
Several retailers have filed for bankruptcy this year, including Payless ShoeSource, The Limited, BCBG Max Azria and Wet Seal. Analysts are predicting many more will follow, and J. Crew, with its faltering sales and mountain of debt, has been dogged by speculation that it could file for bankruptcy.
Mr. Drexler was credited with creating the 1990s office uniform of a button-down shirt and khaki pants during his 18-year career at Gap. He saw that brand’s sales grow to $14 billion from $400 million and created Gap’s discount cousin, Old Navy. But he was fired in 2002 after 24 consecutive months of declines in same-store sales.
He joined J. Crew in 2003 and quickly lived up to his nickname, the Merchant Prince, as crisp tailored shirts and bright, springy ballet flats flew out the door. He was known for riding his bicycle around the office and using an intercom to communicate when struck by an idea. Robust sales set up J. Crew for a successful public offering in 2006 and a huge 700 percent return for the private-equity owners TPG.
In 2011, J. Crew was taken private again in a $3 billion deal, this time by TPG and private-equity firm Leonard Green & Partners. Mr. Drexler received $300 million in cash for the buyout but rolled $100 million back into the company for a significant equity stake.
Yet in recent years, J. Crew could not seem to get fashion right. The company was late to the athleisure party. Sometimes, the clothes were unflattering and boxy. Other times, they were oddly luxe — a $1,500 cashmere hoodie — for a customer base more attuned to paying $65 for a sweater.
The result was a very public fall from grace for the brand that was once a favorite of Michelle Obama, and that for almost a decade was a retail fairy tale, with Mr. Drexler as the hero and Ms. Lyons as the heroine.
“Mickey is one of those people I always looked to as a forward thinker,” said Steven Kolb, chief executive of the Council of Fashion Designers of America, a trade group. “So in a way it’s not surprising, given the changes in the business, that he recognized it was time for a change.”
The search for his successor had been underway for some time, said Ms. Fooshee, the J. Crew spokeswoman. The choice of Mr. Brett, who previously worked for brands like Urban Outfitters, Anthropologie and J. C. Penney, suggests that J. Crew may have decided to move further away from the flirtation with fashion instigated by Mr. Drexler and Ms. Lyons — like showing during New York Fashion Week — to retrench and concentrate on its more accessible styles and on online sales.
Since Mr. Brett, 48, was named president of West Elm, a modern furniture retailer that is part of Williams-Sonoma, it has reported strong growth. He established West Elm as a must-have favorite for millennials and was overseeing the brand’s push into boutique hotels in a handful of markets next year.
“Jim has a reputation as a terrific merchant,” said Joshua Schulman, the chief executive of Coach.
Aside from J. Crew, Mr. Brett will also be responsible for J. Crew’s hipper sibling brand, Madewell, which was created by Mr. Drexler and is the bright spot in the group’s portfolio.
However, J.Crew was the retail darling! So how could have it gone all so wrong in the past couple of years? JCAs know the answer to this. They moved away from "classics with a twist". Top it off with high prices and lower quality (cashmere you are afraid to hand-wash, tees that develop holes after a single wear).
Plus, Jenna Lyons and Mickey Drexler were very eager to cater to Fashion Week and the like. Yet, they forgot their core customer. They took them for granted or even worse, purposefully felt like they were not good enough and left them behind. By the time they realized the mistake, it was a little too late to save the financials.
(Take for example this blog. When it first appeared back in 2008, J.Crew ignored it. Often refusing to acknowledge it. They would not even send me public releases, despite many polite requests to be added. Then when they *would* contact me, it was to tell me to remove *public* information, which didn't sit well with me. By the time they truly embraced bloggers, I already felt shunned by the company. It was my love for their clothes and this community that made me blog. But the company did very little to foster that for me. Incidentally, I never asked J.Crew for trips, clothes, discounts, or anything free. In fact, because of my anonymity, I did not think of doing that. Notice this blog still has no ads! I just wanted to be kept in the loop to share with the community.)
Look, I am sad to see J.Crew in trouble. I have to admit that as of late they have been getting their act together. They are offering more of what I want to see. They are still my go-to for clothes, alongside Madewell. So I want to see them succeed. I sincerely hope Mr. Brett can turn things around.
As for Mickey Drexler... he was always a nice guy. He also made a lot of money from J.Crew so at the end of the day, he will be just fine. ;)
Thoughts on the article? Disagree or agree with Mr. Drexler's move to leave J.Crew?