J.Crew Struggles {Mickey Drexler Definitely Does Not!}

"Thanks!" to Stapelia N. who shared the following article from the Bloomberg (click here to read in its entirety & to watch a video).

CEO Drexler Amasses $350 Million as J.Crew Struggles
By Lindsey Rupp, Carol Hymowitz and David Carey
June 13, 2014

Mickey Drexler has amassed more than $350 million from the leveraged buyout of J.Crew Group Inc. even as he struggles to revive sales and restore the apparel chain’s fashion cachet. Three years after taking the retailer private with private-equity firms TPG Capital and Leonard Green & Partners LP, J.Crew’s chief executive officer is battling slowing sales as shoppers decamp to more affordable, trendier rivals. The challenges reduce the likelihood of an initial public offering this year and make J.Crew less appealing to a potential strategic buyer such as Japan’s Fast Retailing Co.

“Mickey has done very well for himself,” said Eric Beder, the managing director of equity research at Brean Capital LLC. “But J.Crew has to reinvent itself given the prevalence of fast fashion and a customer who isn’t paying up that much for basics, which is a large part of the brand.”

Drexler invested $11 million of his own money when he was named CEO in 2003. In the 2011 buyout, his stake was worth about $301 million -- he pocketed $202 million of that and rolled the rest into an 8 percent stake, according to company filings. He also got $55 million in dividends as part of the $681.5 million J. Crew has paid the owners since going private.

In all, Drexler, 69, has accrued about $380 million since becoming CEO, including options awards, salary and bonus, according to company filings and a Bloomberg News analysis. He and his private-equity partners have recouped over half their $1.23 billion investment.

Possible Sale
In February, two people with knowledge of the matter said J.Crew was in talks about a possible sale to Fast Retailing, which owns Uniqlo. Last month, Drexler said there were no immediate plans for an IPO or sale. The bonds J.Crew sold last year to finance the dividend are indicating diminished odds that the retailer will explore a stock sale anytime soon.

...Initially, Drexler was just what J.Crew needed. After the former Gap Inc. CEO joined in 2003, the chain quickly morphed into the go-to place for younger shoppers looking for stylish T-shirts and making investment purchases of cashmere sweaters; career women couldn’t seem to get enough of the pencil skirts and oversized blazers.

When First Lady Michelle Obama wore a J.Crew cardigan while gabbing on Jay Leno’s couch in 2008 and the first daughters donned Crewcuts, the children’s line, for President Barack Obama’s inauguration, J.Crew reaped fashion status comparable to superstars such as Ralph Lauren and Donna Karan.

Key Rationale
But by the time Drexler took the New York-based company private, it was starting to flag. A key rationale for the $3 billion buyout was giving Drexler an opportunity to work his magic again without Wall Street watching his every move.

It hasn’t happened. Though store mannequins are skillfully designed to prod shoppers into buying outfits for day and evening, there’s a sameness to the fashions, said Shaz Kahng, who advises private-equity and hedge-fund firms about retail and luxury goods. As prices have crept up, younger shoppers, once a mainstay, have fled to Uniqlo, H&M and Zara, she said.

Elleree Erdos, a 24-year-old associate at Craig F. Starr Gallery in New York, no longer gets her basics at J.Crew, as she did in college. “Their basics are a little pricey,” she said. “And their statement pieces are just so branded that if I got a dress at J.Crew five of my friends would say, ‘So-and-so has that dress,’ and that’s not what I want in clothes.”

HBO Hit
Creative director Jenna Lyons, a style icon who appeared on the hit HBO show “Girls” and is a walking advertisement for J.Crew, is under pressure to recapture her fashion mojo. She may be counting on the fall collection, which includes slim-fitted coats in an array of hues and wide cropped pants.

The company reported a first-quarter net loss of $30.1 million, compared with income of $29.3 million a year earlier. Revenue rose 4.9 percent to $592 million as gross margin slipped to 38.7 percent from 44.7 percent. J.Crew incurred a one-time refinancing loss of $36 million in the quarter.

Citigroup Inc. credit analyst Jenna Giannelli projects earnings before interest, taxes, depreciation and amortization of $294 million for the current fiscal year, down 21 percent from last year. If operating results continue to decline, the company said this month that it may write down the value of the business.

Boosted Debt
While J.Crew funded the first dividend with cash on hand, it boosted debt by half a billion dollars to $2.05 billion to pay the second one. Cash generation has shrunk, with free cash flow after interest falling to about $40 million in the 12 months ended May 3. The company had $128 million of working capital at the end of the first quarter and a $250 million credit line.

Like many U.S. apparel chains, J.Crew is looking abroad for growth. The company operates three stores in London, two in Hong Kong that opened in May, and 12 in Canada. In an interview in Hong Kong last month, Drexler said he’s targeting capital cities, including Paris, where the chain plans to open one or two locations by the end of 2015.

“The ambition is to go slow and do it well with great integrity, and not do it quickly and lose the quality control,” he said. “When we see the right location, we will take a shop. We’re not looking everywhere and anywhere.”

Beder said Drexler is smart to do the international push while the company is private because of the ramp-up costs. Capital spending has surged 35 percent since fiscal 2011. Still, because J.Crew is a “uniquely driven American product, we’ll have to wait and see if it resonates with Europeans and Asians,” Beder said.

New Markets
In a statement today, a J.Crew representative said: “We are very pleased with the performance of our initial stores in both the U.K. and Hong Kong which are exceeding expectations and rivaling some of our best stores here in the U.S. We’re also excited to explore new markets in both Europe and Asia to open additional stores where we find great locations.”

On a recent Saturday afternoon, J.Crew’s store on London’s fashionable Regent Street was a quiet oasis after the crowded street; none of the checkouts was permanently staffed.

David Anthony, a 46-year-old display manager at a chain of coffee shops, was among the handful of customers browsing the store. He found a cardigan he liked but wasn’t prepared to drop 248 pounds ($420). “Why should I pay that kind of money if I can get something not dissimilar at Zara or H&M?” he said.

This article and the article discussed in last week's "J.Crew's Got an Inventory Problem {no, really?}" post, showcase a store that is struggling to stay on top of their game. J.Crew is still doing well compared to other retailers- as the industry is struggling in general.

My unsolicited advice for J.Crew, to turn things around, has not changed:

1. Offer kill prices for sale items that are a year old. Seeing those items in the sale section, with the same high price point season after season, impacts how customers see the rest of the sale section. (For example, many of us don't bother checking the sale section because we are tired of seeing the same things.)
2. J.Crew needs to offer "classic with a twist" offerings again. For example, more perfect shirts with Liberty for London prints. ...And Summer maxi dresses that are fitted, as oppose to shapeless sacks. ...And bring back custom-prints like the one on the Veruschka Dress.
3. Hire a really good stylist. Treat the catalog, er style guide, like the store mannequins and make customers want to buy the whole outfit.

Trust when I say that I still buy my fair share at J.Crew because they still offer pieces I love. (Right now, it is the only store I buy clothes et al from.) My suggestions just come from a place where I want to see J.Crew back on top. :)

Other tidbits:

1. I thought it was interesting the article & the video associated with the article stated younger shoppers (those in their 20s) are turning away from J.Crew.
2. I am super excited about the Fall Collection. Slim fitting coats? Array of hues? I am in!
3. Dayum! Mickey got a great return on investment turning $11 million into $300 million in less than 10 years. If only I could get such a return on my savings... ;)

What are your thoughts on the article ? Do you think J.Crew will continue to perform well under Mickey Drexler? Any points caught your interest? :)

Fresh Flowers From J.Crew To You

If you are in the Vancouver or Toronto area and planning to shop at J.Crew today, you will be in for a special treat. According to J.Crew's Facebook page:

Say hello to spring: get free flowers with your purchase today at our Robson & Bloor St stores.

What a pretty gift with purchase! :)

Photos of J.Crew's Newest Vancouver Store Opening

"Thanks!" to Rose (in this post) who let us know that J.Crew has already opened their latest store in Vancouver. This is J.Crew's second location in the city.

Rose also shared a post from Straight (click here to check it out in its entirety) that has several images of the store. (All images in this post come from that post/ link.) According to the article, this location only carries Women's merchandise (sorry guys!) In particular, "clothing, accessories, costume jewellery, and shoes" for the aficionadas of the brand.

To stop by, the store is located at:

Pacific Centre

701 W Georgia Street
Vancouver, BC V7Y 1G5, Canada

I love seeing pictures of J.Crew's stores. There is something about the way merchandise is laid out- such eye-candy!

Are you excited about J.Crew's newest store in Canada? Have you already visited this location?

Canadian JCAs: 25% Off {plus 20% off for international orders}

A big "thanks!" to DaniBP (in this post) who let us know that inside Saturday's edition of Globe and Mail, was a special offer from J.Crew.

J.Crew is offer Canadian customers 25% off their purchase, plus free shipping and returns, with promo code GMCAN15. This offer expires Sunday June 30, 2013. The fine print includes:

To redeem online enter code GMCAN15 at checkout. Limit one promo code per order. Orders will be shipped via UPS... and returns will be honored in the form of reimbursement upon processing. Offer valid in Canada only.

This is a really great offer from J.Crew. Not only is it a great discount amount, but includes free shipping, and will be around for sometime. Congrats to our JCAs in Canada!

Also "thanks!" to shargey (in this post) who shared the following promotional codes for international orders: MAGALOG15 and FRIEND15 for 20% off purchases. These offers expire Sunday, June 30, 2013 as well. She also mentions:

Both will get you 20% off a purchase at jcrew.com. Valid May 3 to June 30, 2013. Shipping via DHL. Not valid in the U.S. Not sure if they are single-use or not - they don't look it, nor does the fine print indicate that they are.

I am not sure whether these codes are one time use either, so please let us know if they work for your online orders!

Will you be taking advantage of this promotion? What items do you plan on getting?

Three New J.Crew Store Openings in Canada

A big "thanks!" to Mandy who let us know that on the back of her recent catalog from J.Crew was a list of new store openings in Canada:

May 15, 2013 - Markville {Toronto}
May 22, 2013 - Pacific Center {Vancouver}
June 5, 2013 - Chinook Center {Calgary}

J.Crew had mentioned that they plan to open more stores in Canada this year. It's great to finally know when *and* where they will be popping up. Congrats to our JCAs in Canada!

Are you excited about J.Crew's newest stores in Canada? Do you know if these 3 up-coming stores will carry the full line or select items (like Women's only)? What other cities (in Canada) should J.Crew consider next?

Break Down of J.Crew Men’s Collection

The following is an interview with Frank Muytjens and Jenna Lyons, over at the Star (click here to read article in its entirety):

J.Crew men’s fashion goes for bold new looks
By Jeanne Beker
October 3, 2012

There’s something mixed up going on in men’s fashion. If you think you can handle it, has J.Crew got a collection for you.

Those enamoured with offbeat colours, rugged and clean pieces teamed together, and unexpected graphic print combos will delight in the news that the two new J.Crew stores opening in December — Eaton Centre on Oct. 3, and Fairview Mall at the end of October — will feature menswear for the first time in Toronto.

The popular men’s line includes classics like the famous Ludlow suit and shirt, Italian cashmere, and Japanese denim. But these days, even the most conservative men are pushing their personal style envelopes and having fun with fashion. It’s all about a play on irreverence which, next season, will result in an appetite for lavender and acid green jeans, mixing stripes and checks, and popping tuxedo jackets with denim work shirts.

I took in the J.Crew men’s collection for spring at New York Fashion Week recently, and was wowed by its upbeat feel. The colour blocking inspired by American artist Ellsworth Kelly was especially striking. I spoke with J.Crew president and executive creative director Jenna Lyons, and menswear designer Frank Muytjens about the philosophy behind the optimistic collection.

Q: How eager do you think most men will be to embrace the label’s new mix or will it take a little coaxing?
A: Jenna: I think what I do appreciate about J.Crew is that there are a lot of avenues to find that look. We’re not expecting you to wear a print and a stripe. We would love it if you do, but if that feels too much for you, you can do a tonal look.

Frank: I think that guys want to be educated and all the social media makes it easy for them. They want to know about quality, they know about colour. They want to know where things are from and how they are made. It’s pretty interesting.

Q: I still remember the days when men were afraid to wear a pink shirt. Is that still an issue today?
A: Frank: Menswear is on a roll. Look at men now, they are ready for anything. It’s great.

Q: Are men and women on the same wavelength when it comes to self expression?
A: Jenna: I do think that a lot of what you see out there on blogs like The Sartorialist is saying that people are really interested in having personal style. It’s become cool. When I was growing up it was all about looking like everyone else. Now it’s about having your own personal style and being an individual and I think the men are getting just as much attention as the women, which I love.

Q: You’re encouraging the mixing of sensibilities, fabrications, even attitudes, all in the same look. Can you explain why?
A: Frank: I think that’s one of our signature things. We do it to try to explain to a guy how he can mix things from different areas within one look. And it might be something he has in his closet already, like a jean jacket he can wear under a sport coat — something he didn’t think of before.

Q: What do you say to people afraid of taking chances, of stepping outside their comfort zones?
A: Jenna: I think sometimes it’s about listening to when someone pays you a compliment. Maybe try that again and push it a little further. I think you just have to dive in.

Frank: We have a feature on our website called ‘Ask Jack’. And Jack is a guy who really exists and he gives great advice to guys who are a bit insecure. I would say just go for it and follow your instincts. It’s great to develop a personal style.

Q: But there’s always the danger of being victimized by trends. How does one guard against that?
A: Jenna: I think that’s the mistake that so many people make. They feel that, “Oh, I have to look like that person,” and do that trend. There are a lot of trends where you have to stand aside and say, “No, I cannot wear a bell-bottom jean.” It just doesn’t work for me. And that’s OK.

Frank: I think menswear is more about shifting little things here and there each season. It’s not about being trendy. We are in it for the long haul. We are in it for longevity and I think our guy appreciates that.

The interview is enjoyable- both Jenna and Frank share some great pieces of advice. With that said, a few things stuck out for me:

• Jenna mentions that people should not have to feel like they should look like someone else. Great point! She definitely has her own style that is recognizable (pair of black framed glasses anyone?) Yet, I could not help find the humor in that statement as J.Crew keeps trying to recreate her signature style. (Of course, referring to the Jenna drones that appear on J.Crew's runway and catalogs.)
• I think Frank's last sentence about it not being trendy but about longevity is something I both admire and am jealous of, when it comes to the Men's collection. J.Crew seem to "get that" when it comes to Men's, but not so much with the Women's Collection.
• As for the advice to wear a jean jacket under a sport coat... no. Has he actually tried this? Because I imagine it would be pretty difficult to get your arms into a sport coat while already wearing a jean jacket, let alone getting your arms down by one's side.

What are your thoughts on the interview? Do you like the direction that Frank is taking the Men's Collection at J.Crew?

J.Crew at Toronto Eaton Centre {finally open!}

J.Crew’s latest Women's store, as well as their first Men's Shop in Canada at Toronto Eaton Centre, is finally open for business.

"Thanks!" to Get Fresh Press who shared her observations of the new stores with us, which is laid out in bullet form for ease:

• ... the layout is slightly larger with a dedicated side room for suiting and Collection type pieces (Lots of Jules paisley dresses, ...)
• The fitting area for women is also better designed with proper doors versus the Yorkdale curtains, but the lighting is still dark and slightly greenish.
• Less of a security guard presence at front door than when Yorkdale opened.
• I actually liked the organization and styling in our first men's store, which is right next door but has to be entered separately, slightly more than the women's.
• My big annoyance was the continual small disparities between the regular online Canadian pricing and the in-store merchandise - always greater.  For example, the navy field jacket, which I did purchase, is $172 online but $178 in-store
• All of the past roll-out regular merchandise which is already discounted in US stores and online is still full price, which I guess is understandable for a new opening.  
• The if "while supplies last" if you spend $300 gift with purchase ...is apparently a "ladies" Timex watch
• My reco to other JC fans would be to do your online shopping before you go to make sure you are getting good value.
• And JC is also heavily promoting the opening of a third Toronto store at Fairview Mall in the North York area of the city end of this month.

"Thanks!" again to Get Fresh Press for her fantastic insights on the new stores!

Also, there is a post over at Sidewalk Hustle (click here to read in its entirety) that covers both stores, but also posts some gorgeous interior shots of the stores' merchandise (both Men and Women's). It is definitely worth checking out, especially for the eye candy! All the photos included in this post, come from Sidewalk Hustle's post too.

Have you checked out the new J.Crew store at Toronto Eaton Centre? If so, please let us know what you thought of it! :)

Something Special in the {Canadian?} Mail

"Thanks!" to DaniBP (in this post), who let us know that she found something extra in her mailbox...

This is OT but I received a card in the mail today from J Crew. This is what it says:

"Dear Cardmember,
Because your J. Crew Card is not yet available for use in our Canadian stores, we want to make it up to you...please enjoy FREE SHIPPING and 20% OFF YOUR PURCHASE..."

It expires on September 30th. Very nice! I wonder if all Canadian J Crew Cardholders will get this treat? ...

This is another pretty awesome offer from J.Crew. Especially nice since it is for Cardmembers (who historically do not get a lot of perks from our favorite retailer).

Now I am not sure if it's just Canadian cardmembers who will be receiving this mailer/promotion, or all cardmembers.

Double-check your mailbox to see if you got a special offer too! :)

J.Crew News on Vancouver Store

The Vancouver Sun has a short video and article (click here to read in its entirety and to see video) about J.Crew's recent opening of their Vancouver store:

Success is in the details for J.Crew CEO (with video)
By Darah Hansen
May 15, 2012

Minutes before a cocktail party celebrating the opening of the new J.Crew store on Robson Street set to begin, CEO and chairman Millard “Mickey” Drexler was still putting the final touches to the overall look of the space.

With Drexler, the Bronx-born businessman who’s been called the “Steve Jobs of retail”, success is all in the details.

“Can someone please cover her stomach,” he called to a sea of staff members busying themselves around the gleaming 5,953 sq. ft., two-storey shop in reference to a faceless mannequin set up at the front doors.

Drexler had earlier asked that the clothing on the same mannequin be changed. Her initial outfit, selected from the New York-based retail company’s new spring and summer collection, was beautiful, but too trendy.

Vancouver calls for a more relaxed vibe — a look, eventually achieved with a pair of pink toothpick jeans and poppy-coloured silk blouse, that says “Come into my home,” he said.

Drexler’s brief visit to the West Coast this week was timed to coincide with the launch of his company’s latest expansion into Canada’s thriving retail market.

The Robson location officially opened its doors to the public Wednesday morning, offering its classic clothing line and accessories to both men and women.

The Vancouver store is the only the second to open in Canada after Toronto in August 2011. Plans to launch a third location in West Edmonton Mall are scheduled to go ahead next month. ...

Drexler — who, in his previous career as CEO of The Gap, oversaw that company’s growth from $400 million to $14 billion in sales — said J.Crew has long been eyeing the Vancouver region for cross-border expansion, attracted by the city’s international flair and sense of sophistication.

“It’s very hard to explain, but when you see it you know,” Drexler said of his unique decision-making style on site selection. “It’s a science and an art that gets backed up by demand.”

On a broader note, he said Canada is an “obvious market” for the J.Crew brand. “In hindsight, we could probably could have done it (the expansion) earlier.”

The company has, for years, recorded steady traffic from online and catalogue shoppers north of the border. An abundance of Canadian licence plates on cars parked outside its retail locations in neighbouring cities like Seattle and Buffalo has also not gone unnoticed.

The Vancouver store, in keeping with J.Crew’s carefully groomed image, is designed to provoke a comfortable, inviting and unintimidating reaction from customers. Tucked among the clothing and accessories, beautifully displayed across stylish wooden tables and rails, are paintings by local artists Jeff Depner and Dougal Graham, a book about Audrey Hepburn and, in a nod to the brand’s increasingly broad international appeal, a stylish globe.

“Good taste and good style, I think, plays well everywhere in the world,” said Drexler.

Smerdon said J.Crew’s choice to locate its flagship store downtown is “a great sign for Robson Street that it is still the pre-eminent shopping street in the city and the region.”

Drexler confirmed his company is also eyeing other potential locations in Metro Vancouver, including West Vancouver. ...

There is another article over at Straight.com (click here) that has additional images of the Vancouver J.Crew store that is worth checking out.

I always love looking at the interior of their stores! There is something about seeing the merchandise on the tables, and the clothes on the mannequins- loves it!

Have you stopped by the new Vancouver location? What are your thoughts on the latest store in Canada? Please share! :)

J.Crew Store Opening Soon in Vancouver {Canada!}

A big "thanks!" to Rose (of the fantastic "1 More Shopping Blog" blog) who shared the following news with us:

Vancouver JCAs, the Robson store will be opening on April 25. YAY!

For those JCAs in Canada, mark you calendars!

What are your thoughts on this latest locations for a store opening? Do you think you be stopping by?

More J.Crew Stores Coming to Canada!

"Thanks!" to so many of you, including JCrew Guy In Canada, as well as C, who shared the following news with us: J.Crew has new stores opening in Canada! There are several articles about their expansion (thanks JCAs for sharing them!), the following is from the Globe and Mail (click here to read in its entirety):

J.Crew announces Edmonton and Vancouver stores
By Maggie Wrobel
February 23, 2012

Edmonton and Vancouver will get a dose of Americana chic this spring, as iconic retailer J. Crew is set to open two new stores in the Canadian cities.

Following on the heels of the brand’s first Canadian store – which opened to much fanfare in Toronto’s Yorkdale Mall last August – a two-floor, 5,953-square-foot Vancouver outpost is planned for Robson Street, while the single-floor, 5,657-square-foot Edmonton store will be located in the West Edmonton Mall. (A second Toronto location is planned for this fall, to be housed in the Eaton Centre.)

Calling the Canadian response to J. Crew “absolutely electric,” president and creative director Jenna Lyons added that all three new stores will also offer, for the first time in Canada, the coveted men’s collection.

The brand’s arrival in Canada last year received a mixed reaction, as initial excitement turned to letdown over elevated prices, which were about 15 per cent higher in the Canadian store and on the Canadian e-commerce site compared with those at U.S. outlets. Following a consumer outcry, the company reverted to allowing Canadians to shop the U.S. site in American currency.

So many stores opening in Canada, including Menswear- exciting news indeed!

What are your thoughts on this latest locations for a store opening? Do you think the locations are a good fit with J.Crew? Will you be stopping by?

Coming Soon to Toronto, Canada {another J.Crew!}

A big "thanks!" to Cynthia (of the fantastic "Delectably chic" blog), who let us know in her post here that J.Crew is coming to the Toronto Eaton Centre (click here) in Canada.

Last August, in the "J.Crew Spreads Its Wings Abroad" post, we learned that J.Crew was scouting Toronto’s Eaton Centre as a high priority location. It is great to see that it has been confirmed. Now we just need to find out when it officially opens!

What are your thoughts on this latest location for a store opening? Do you know when it will open? Will you be stopping by?

J.Crew Celebrates Boxing Day in Canada!

Sorry this news is {way} late today (I have been out at the mall doing some post-Holiday shopping!) A big "thanks!" to Anya who let us know the following:

...Jcrew is being nice to Canadians as they celebrate their first boxing day in Canada with am extra 50% off sale items in store only but only for Boxing day (Dec 26). I wonder if they'll carry on this tradition as they grow in Canada...

Happy shopping to all the Canadian JCAs!!!

On a semi-related note... As many of you have already mentioned, J.Crew stores in the United States are running an additional 30% off sale items. However, it does make it Final Sale now.

J. Crew Opening New Store in Canada & UK

"Thanks!" to T and Rose (in this post) who let us know about the following news and article from VanCityBuzz (click here to read in its entirety):

J.Crew Coming to Robson Street Vancouver
Posted by Vancity Buzz
November 23, 2011

The Robson Street you see today will be vastly different in the next year or so as changes are coming. One of those changes is the closure of Tommy Hilfiger. It will be replaced by J.Crew. This was reported by an anonymous source to Business in Vancouver. The block between Burrard and Thurlow will be quite busy with many new retailers such as Forever 21 and a rumoured Apple Store moving in. ...

Here is the excerpt from Business in Vancouver:
Another source, who similarly did not want to be identified, said that J.Crew Group Inc. (NYSE:JCG) will soon replace the Tommy Hilfiger store across the street from the future Apple store.

We’ll have to wait to see what happens. If this is true, this will be the second J.Crew store opening up soon in Vancouver. The first one is a confirmed Pacific Centre location.

J.Crew has made comments in the past that they will be opening more stores in Canada next year. It's great to finally know where one will be popping up. My hope is that they will be offering their full line (not just Women's, but also Men and Crewcuts).

"Thanks!" to Bourbon & Pearls (in this post) who let us know the following news:

It's official, J Crew are opening a flagship on Regent St in London next year!

Mickey Drexler mentioned his interest in opening a store on Regent Street back in October (refer to the "Lunch With J. Crew Mickey Drexler? Sure!" post). Although he sounded confident about the location and even hired agents to scout a location, nothing was ever confirmed. So this is exciting news!

Congrats to our JCAs in Canada & England!

Are you excited about J.Crew's newest store in Canada & England? What other international cities should J.Crew open up a store in?

Everyone Loves Mickey Drexler!

A new article from CNN (click here or here to read in its entirety) about J.Crew's top talent, CEO Mickey Drexler:

CEO brings new life to J. Crew
By CNN
September 14, 2011

With bright colored clothing options and attention to quality, J.Crew has seen a revival in the last decade as an affordable luxury brand under the guidance of CEO Mickey Drexler.

"Do it, do it right, pay close attention to the product and over time, you will win," Drexler said, repeating the philosophy he runs the company by.

Once a catalog company for college kids, the all-American brand was recently named by First Lady Michelle Obama on The Tonight Show as a contributor to her fashion-forward wardrobe. This year also marked the first time the company showed its collection at Mercedes Benz Fashion Week in New York.

With a mantra of "no profit, no fun," Drexler came to J.Crew nine years ago after an abrupt split with the Gap.

"He wanted to talk about Italian cashmere, he wanted to talk about our Italian shoes, he wanted to talk about quality," Jenna Lyons, president of J.Crew, said. "We hadn't been having those conversations."

Since his arrival, Drexler has also created kids, bridal and jewelry lines for the stores. He is also credited with inventing "casual Fridays," as his brand has changed the way Americans dress.

"J.Crew has made itself into something magical," said Cindi Leive, editor in chief of Glamour Magazine. "I know women who could afford anything in the world, and they will literally go through the J.Crew catalog and just order those outfits right off the page."

Since the company picked up Drexler, it's seen its sales triple to $1.8 billion, a fact the CEO attributes to their bold use of color.

"When you buy something like this, you're competing with 50 other retailers and half of them have it on sale," he said as he looked over pairs of cargo shorts in colors ranging from the standard khaki to lime green and purple. "Color is a competitive advantage for us."

With 233 stores nationwide and more in Canada, the company has its sights set on expanding worldwide.

So I am on board the "Mickey Drexler is Great" train. Really, I am. He does a fantastic job of replying back to customers personally, or getting one of his team members to respond quickly to customers' issues.

With all that said, the thing that struck me about this article was on quality. There is no denying that J.Crew's quality has taken a dive in the past few years alone. I checked out the Hacking Jacket in Herringbone (Item 48263; $198.00) and I could immediately tell it was thinner than years' before. The buttons felt "light" too. (This is not to say that I don't think the jacket is darling. Chances are, I will be owning one by the end of the year.) I also developed holes under my Vintage Bateau Top (Item 24484; $42.50). (I should add, that I haven't worn it that much and wash with great care.) Then there is the crooked side seams I found on both of my Drapey Rêve Tees (Item 33579; $55.00). Where was quality control? (By the time I noticed the flaw on both tees, it was too late to return. I had already worn them, so I just kept as is. I want to add that I get a lot of compliments on them because they really are pretty.) Mini rant is over. My point is that I hope quality is still an important factor in J.Crew's merchandise. :)

The other thing I want to comment is about color. J.Crew is known for rich colors. So my message to them is to stick with it! Heather Dark Grapes and Decadent Reds are the way to go. Maybe that is why I am crushing hard on the Fall Collection. There are just to many beautiful colors to choose from. Just don't go crazy with the neons, J.Crew. ;)

What are your thoughts on the article? Any points that you found particularly interesting? If so, please share!

J.Crew & Latest Quarter Results

A big "thanks!" to Jessica who kindly shared the following article from WWD with us (click here to read in its entirety) that gives us a more in-depth explanation:

J.Crew Logs Q2 Loss on Buyout Costs as Sales Rise
By Arnold J. Karr
with contributions from Jean E. Palmieri
September 1, 2011

Costs related to its March acquisition by TPG Capital and Leonard Green & Partners led J.Crew Group Inc. to a $10.5 million net loss in the second quarter while net, comparable and same-store sales registered gains in the period.

The company disclosed in its Form 10-Q, filed with the Securities and Exchange Commission Thursday, that it had settled a series of shareholder claims regarding the pricing of its acquisition by adding $6 million to the $10 million settlement agreed upon in January. The company said that it “or its insurers” and the two acquiring parties would make a one-time settlement payment of $16 million to be distributed on a pro-rated basis among members of the class who challenged the purchase in Delaware Chancery Court and other state and federal courts. J.Crew recorded a $10 million litigation settlement expense in last year’s fourth quarter and expensed the remaining $6 million in the second quarter.

During the three months ended July 30, the New York-based specialty retailer recorded a net loss of $10.5 million compared to net income of $34.9 million during the prior-year period. Stripping out costs and amortization related to the acquisition as well as interest, taxes, depreciation and amortization, adjusted EBITDA fell 7.6 percent to $64.2 million from the predecessor company’s year-ago level of $69.5 million.

Overall revenues in the quarter rose 6.7 percent to $435 million, from $407.5 million, with store sales up 5.4 percent to $311 million and direct sales up 13.1 percent to $116 million. Comparable-store sales were up 1 percent and comparable sales, which include direct marketing revenues, rose 12 percent. Gross margin declined to 36.5 percent of sales from 44.6 percent with acquisition-related costs, including $23 million in store lease amortization costs related to its acquisition.

On the firm’s quarterly earnings call, James Scully, chief financial and administrative officer, said that the women’s business improved during the second quarter versus the first quarter while there was sustained strength in men’s, accessories and its Crewcuts division. He said the company made “more significant adjustments” to the women’s assortment in the second half, “and we are beginning to see the benefit of those adjustments.”

A company spokeswoman said women’s pants, schoolboy blazers, cashmere, shoes and handbags were among the bestsellers in the period.

Scully also said J.Crew is “moving forward on a number of key strategic initiatives,” including growth internationally, in the direct channel, as well as in the full-line and factory outlet stores. The Madewell division is seen as an expansion vehicle.

The first women’s-only store outside the U.S. opened in Toronto on Aug. 18 and Scully said the company was “really pleased with the results in customer feedback so far.”

He said the firm will open nine new retail stores this year, including one Crewcuts unit. A men’s-only store will open at Columbus Circle in the fourth quarter. Eleven new outlet stores are planned for 2011.

“Our long-term plans remain to grow our factory square footage by approximately 10 percent a year over a three- to five-year horizon through a combination of new units and expansions in existing centers where we see potential upside,” Scully said.

It is interesting to see the repercussions of the acquisition negatively impact J.Crew's latest quarter. Although I doubt it will hurt them in the long run (especially since they will be privately held).

I love that J.Crew was able to turn things around for their Women's collection. If they only had listened to us JCAs from the beginning! ;)

I also love the quote about Canadian shoppers' feedback. Um? Did you read all of them? Because I am pretty sure most were disgruntled about the pricing structure before it got fixed. ;)

What are your thoughts on this latest news? Any points you found interesting?

J.Crew Makes Changes to International Commerce Sites

"Thanks!" to many of you, including T.J., Laura & DaniBP (in this post), who shared the following update to J.Crew's online sites for international customers.

J.Crew's Canadian site had a few changes this morning: (1) prices are shown in U.S. Dollars; (2) shipping at a flat rate of USD 9.95; (3) an image titled "Canada News Updated Shopping Experience", with a link, on the upper right hand corner announcing:

What will the duties and taxes on my order be?
No additional duties will be applied at checkout or upon delivery. For purchases made in Canada, we collect GST and PST where applicable.

I am happy to see that J.Crew changed their double charge policy. I am also impressed by how quickly they handled it. (Honestly, I am. Do you remember how long it took them to fix upgrade their website back in 2008? The reaction time for this seems very quick in comparison.)

J.Crew Expected to Change International Pricing {yey!}

"Thanks!" to West Coast Crew'ner (in this post) who let us know about the following article from Money (click here to read it in its entirety):

J. Crew scraps duties after CDN price war spreads to Europe
By Stefania Moretti
August 24, 2011

J.Crew is expected to remove duties on all items purchased through its new Canadian online store after a bitter price war erupted in Canada, eventually reaching as far as Europe.

... J.Crew president Jenna Lyons first responded to irate shoppers earlier this week with a letter explaining, “the change in cost for merchandise purchased in our stores and online was necessary to keep pricing consistent with our new - and expanding - retail operations in Canada."

The letter did little to calm infuriated shoppers, including Fraser, forcing J.Crew to scrap duties from its Canadian website altogether, according to reports.

The higher base prices on goods sold in Canada however are expected to remain. J.Crew did not return QMI Agency’s repeated requests for comment.

Stories like Fraser's made waves as far Europe. ...

"Thanks!" also to GetFresh (in this post) who let us know about the following article from the Globe and Mail (click here to read it in its entirety):

J.Crew backtracks on higher Canadian prices
By Marina Strauss
August 24, 2011

...J.Crew Group Inc. has backed down in the face of a backlash from customers angry about higher prices at its newly opened Canadian store and website.

Starting on Thursday, it is reversing its decision to charge its e-commerce customers in Canada for duties, which raised the final price to as much as 50 per cent above those at its U.S. stores and on its U.S. website.

Still, J.Crew will continue to charge an average of about 15 per cent more in Canada than at its U.S. outlets and website. But to ease the e-pricing pain, it offers a flat $9.95 shipping fee.

New York-based J.Crew’s about-face came after The Globe and Mail reported on Monday the reaction to the higher prices in Canada following the retailer’s much-anticipated opening of its first store in this country – in Toronto’s Yorkdale Mall – four days earlier. At the same time, it had launched a separate Canadian website with higher base prices as well as an added duty folded into the taxes.

The price increases sparked a quick and angry response from J.Crew’s long-time customers, who were familiar with its prices from shopping through its U.S. website or stores.

“We have to deal with what we didn’t do right,” Mickey Drexler, chief executive officer of J.Crew, said in an interview late Tuesday. “We’re fixing that now … If we didn’t do anything about it – guaranteed, we would see a deterioration” in business.

As it was, J.Crew’s sales in the first six days of operations in Canada weren’t noticeably pinched by the controversy, he said. In fact, all the publicity about the pricing probably drew more people than otherwise to the store, he said.

“A lot of our loyal customers got hugely upset about it,” Mr. Drexler said. “I would have, too. … If it happened to me personally, I’d feel the same way … The lesson I learned: We were doing a lot to get the store opened. I imagine we should have done it better. We didn’t follow, perhaps, the details as well as we should have.”

Nevertheless, J. rew’s decision to drop duty fees wasn’t enough to appease all its infuriated customers. Suzanne Dugard, who returned $600 of clothes at the Toronto store this week after buying them on Thursday, was still disappointed about the higher base prices.

“We still end up paying more than before,” said Ms. Dugard, 42, who spent thousands of dollars at J. Crew last year alone but has decided to no longer shop there because of the pricing. “Not all Canadian shoppers are going to swallow that.”

Mr. Drexler countered that the 15-per-cent higher prices cover the increased cost of doing business in Canada, adding that other U.S. retailers charge a premium. “We are looking at what others do … The fact is, prices are higher in Canada than they are in America.”

J.Crew officials said while duties vary, the online rate change will scale back prices by between 10 and 20 per cent – bringing them to virtually the same amount as in the U.S. Although base prices are about 15 per cent higher, J.Crew is absorbing the duties and has introduced a lower, $9.95 shipping rate, they said.

On Thursday, J.Crew is sending a message to its customers explaining the changes, refunding any duty paid on purchases since Aug. 18 and offering a $25 e-gift card.

“We have received many messages like yours in the past few days and appreciate that you took the time to reach out,” the CEO says in the letter, signed “Mickey.”

“We have taken these concerns very seriously. When we opened our first Canadian store in Toronto last week, we aligned our store, online and catalogue prices to be consistent. In the days following the launch of our updated website, we quickly realized that we could have done things better for our online shoppers. And now we are making it right,” the letter says.

...The Canada-U.S. price gap reflects different dynamics in each of the markets. The U.S. retail landscape is hugely competitive, resulting in prices that are frequently lower than in the rest of the world, according to Douglas Porter, deputy chief economist at Bank of Montreal, which conducted last spring’s price survey. ...

...Canada provides fewer economies of scale, resulting in higher costs to distribute products, she has said.

I am so happy to hear that J.Crew is quickly changing their shipping policy! I am also impressed by how they are giving customers a $25 gift card, and refunding the difference to past purchases. Classy J.Crew, nice move. Mickey Drexler also gave a lot of great quotes recognizing their mistake and willing to make it right. Yey!

What are your thoughts on the article? Any points you found interesting? Do you think the change will occur, and if so, how quickly?

J.Crew in the News: International Price Wars

"Thanks!" to laura (in this post) who let us know about the following article from the Toronto Sun (click here to read it in its entirety):

J.Crew's Canadian price war spreads to Europe
By Stefania Moretti
August 24, 2011

The cross-border price war that's erupted over sticker shock at J.Crew's new Canadian outlets has reached as far as Europe, QMI Agency has learned.

U.S.-based J. Crew ...opened the doors to its first Canadian location in Toronto last week with throngs of shoppers and media in tow. The retail honeymoon didn't last long, however, as complaints poured in over the company's Canadian pricing strategy, and now that of its U.K. stores.

Like many J.Crew loyals, Laura Fraser, 26, of Toronto, was excited to visit the new Yorkdale Mall location. When the store sold out of two items she liked - a set of pumps and a blazer - she went online to make her purchases instead.

After the initial sticker shock subsided, she did a little comparison shopping. Buying the goods from the U.S. website and shipping them to her granny's home stateside would have cost her $419.

The same items bought off J.Crew's new Canadian online store and shipped to her downtown Toronto address would have cost $623. That's a difference of 48%. But what really got fashionistas like Fraser rioting on Twitter and in other forums is that until a week ago, many Canadians shopped on J. Crew's U.S. website, where they were used to paying up to 25% more to cover duties, taxes and shipping.

As of last week, however, Canadians must now order from the new Canadian website, which charges duty, tax and shipping on top of already higher base prices. Before duties, taxes and shipping fees, Fraser's bag of goodies cost 16% more on the Canadian website (US$230 for each the jacket and the shoes, as opposed to US$198).

"It makes me feel like they think Canadians are lesser than Americans, because they are charging us a significant amount more," Fraser said. "I think as Canadians we are used to being charged more for things, but this is a significant increase in price."

Fraser, along with other disgruntled Canadian shoppers, received a letter from J.Crew president Jenna Lyons. "The change in cost for merchandise purchased in our stores and online was necessary to keep pricing consistent with our new - and expanding - retail operations in Canada," Lyons wrote, adding that duties, taxes and shipping are separate.

The letter infuriated Fraser even more because, she said, it backs up her theory that the price increases have nothing to do with exchange rates, duties, taxes and shipping. "I think they've priced me out is what they've really done."

Stories like Fraser's made waves as far Europe. Cristiana Senni has been following the price saga from Italy and is concerned since J.Crew is expected to launch more European websites this fall. The new U.K. online store opened the same day as Canada's with even more inflated prices, Senni said.

J. Crew's No. 2 pencil skirt in double serge wool comes with a price tag of 110,17 pounds, or US$181.80, before duties, taxes and shipping. On the American website the same skirt sells for US$120.

"This increase has no justification whatsoever. There are no J.Crew stores in Europe and none of the U.S. retailers shipping to Europe have ever increased their prices to this level," Senni wrote in an e-mail to QMI Agency. "I can't say how the sales will go in Canada, but if they keep the current prices for Europe I am quite sure that they will sell very little, as we can find much better quality clothing for less and J.Crew is almost totally unknown in Europe," she said.

QMI Agency is awaiting comment from J.Crew on its European pricing.

RETAIL RIPPLE EFFECT
The backlash has raised questions about how other U.S. retailers headed north will tackle their Canadian pricing strategies.

"Price is key no matter where we are," Target spokeswoman Amy Reilly said. "We're still working out the overall pricing strategy for the Canada market, but we are definitely aware that it is a critical part of our guests' shopping decision and we intend to have very competitively priced products in Canada," she said.

First, it is clear that the media is taking notice of J.Crew's international pricing strategy. Second, this article does a good job explaining the double charge for online shopping. Third, I am happy attention is being given to the U.K. shoppers and their high prices. J.Crew's U.K. site even removed the sale section! :(

Lastly, a big "thanks!" to laura who did a great job in her interview! :) She clearly articulated the issue with J.Crew's new pricing policy.

What are your thoughts on the article? Any points you found interesting?

Another Q&A With J.Crew's Jenna

The following article is from the National Post (click here to read in its entirety):

Q&A: Jenna Lyons, creative director of J.Crew
By Nathalie Atkinson
August 20, 2011

When the venerable American retailer J.Crew was born as a catalogue business in 1983, it was an ultra-preppy brand. Who could have imagined their signature look would evolve to include both madras stripe and saucy leopard print? Jenna Lyons started as an assistant designer in 1990, and as she ascended to become the company’s president and executive creative director, J.Crew’s glamour quotient grew accordingly. The opening of the retailer’s first Canadian store in Toronto on Thursday (with more stores to come in key cities across Canada) coincides with the launch of a new Canadian catalogue and website. Lyons and her much-admired personal style were in attendance, bringing with her the clinking of bracelets and an arresting Astroturf-green sequined pencil skirt paired with gauzy Breton-stripe sweater. Nathalie Atkinson sat down with Lyons to talk value, colour and feathers.

Q Styling plays an important role in the brand, both in merchandising the store and in the catalogue.
A And there’s a lot of personalization here [in Canada], which I love. That works really well for us because so much of what we do is about that, making things your own. We try to show a similar item in many different ways. One of the nice things about having a catalogue is that every month we’re able to show maybe the same sweater but completely differently. One month it might be with little shorts and ballet flats and really casual, the next a pencil skirt, more jewellery and more tailored, and the next might be with a slouchy men’s trouser. We also might be giving you a way to wear it that you hadn’t thought of, that moment of ‘I already own that sweater, maybe I’ll buy those pants.’ Or, oh gosh, you’d forgotten about a piece and pull it out and wear it a different way. That’s so important — that people feel that they’re getting value and quality out of something and not just style. I think everyone works really hard — we know what it means to part with your cash and want you to feel good about what you’ve bought. And also that there’s a quality of timelessness so that you’re not shelving it three months later and feeling just, ugh.

Q Since 2008, there’s been a monthly feature called Jenna’s Picks, singling out non-J.Crew products that you love. This seems to be a time, not just at J.Crew, but places like Net-a-Porter, when retailers are edging more and more into creating editorial for their customers.
A I think there is a need to make things feel a little more intimate and exciting and people are looking for a level of integrity, and a different level of interest, in something. For instance, we’ve been selling branded products that we buy like Sperry, Alden Shoes and Lulu Frost jewellery. One of the things of having that curated element and things feeling a bit more, to your point, editorialized is that it’s not all about us. It’s about our point of view on all kinds of things. I think people want that — most people don’t have the time to really shop and find things on their own, so being able to have something curated for someone well, nine times out of 10 you’re interested in the same things your friends are interested in. That’s how it works, right? So if you like the group of people who are making the clothes, chances are very good that you’re going to like some of the other things we’re looking at, whether it’s the best lipstick we think is out there or the right nail polish, the book, the sunscreen, the perfume or the record.

Q The approach to women’s collaborations seems a bit different from the mens heritage brands like Red Wing or Thomas Mason.
A There’s also for us, I think, a generosity of spirit to talk about somebody who’s maybe a young and unknown designer and give them some exposure that maybe they didn’t have. That is important to us, the idea of being generous, supporting those who don’t have the same voice, audience and exposure that we do. We mail three million catalogues a month so there’s a lot of people who get to see your name if you’re on a page! And that’s a nice thing to be able to do.

Q On the runways and in designer fashion, colour is the new neutral. J.Crew went heavy on colour this fall, too. How do you know when the core customer is ready for that trend, to make fuchsia pants the new basic?
A When we think about it too much, I think we stumble. We do what we think is right and there is a pulse that we feel inside the office. Do I think that [customers] were as ready for the fuchsia pant and the blue or red pant as we thought? They were actually so ready for it that we don’t have any more stock in it, which is kind of a bummer! I think we can under-estimate in some cases what the customer is ready for.

Jenna is so pretty in that photo! Onto the article... (1) It's great that J.Crew puts effort into producing catalogs. It is also great that they recognize how important it is as a styling tool. Then who came up with the stupid decision to remove it from their online website? (2) The quotes about customers wanting quality and timeless pieces really resonated with me. It is why I am drawn to J.Crew. But I have to be honest, the last few years, J.Crew has stepped away from this concept. So I am happy to hear there will be a return to it.

What are your thoughts on the article? Any points you found particularly interesting?