J.Crew Stock: Should Buyers Be Worried?

There is an interesting article over at the Motley Fool (click here for the article in its entirety) about J.Crew's stock price and whether it's current value is a true representation of its worth.

Ditch This Overpriced Retail Stock
By Alyce Lomax
August 12, 2009

The market's recent rally has sent many retail stocks on a wild ride. But their lofty new heights have left many vastly overpriced, especially in a market full of fickle shoppers. As one of the priciest stocks in the retail sector, I think buyers should beware J.Crew (NYSE: JCG).

J.Crew's stock has skyrocketed more than 60% over the last six months. Perhaps investors have been heartened by first lady Michelle Obama's apparent fondness for J.Crew outfits. However nice that may be for the retailer's brand, it's still no reason for the stock to trade at a nosebleed-inducing 44 times earnings.

Though J.Crew has remained profitable, it hasn't been doing that well. Let's compare its actual performance with that of a few other mall-based retailers: (click here for chart).

As you can tell, J.Crew's trading at a major premium to the retail peers outlined above, especially given its declining profitability and staid single-digit revenue growth. The premium that investors have given J.Crew seems better suited to a gold-standard tech stock such as Amazon.com (Nasdaq: AMZN), which has proven its power to generate unprecedented levels of growth in online retail.

Remember, Hot Topic also traded at dizzying premiums not too long ago. Now that it's losing business momentum, its share price has cooled off considerably. Meanwhile, Buckle and Aeropostale look incredibly appetizing, with their relatively low P/E ratios and debt-free balance sheets.

J.Crew doesn't belong on a retail deathwatch, unlike some of the market's more debt-laden and struggling retailers. Still, the company's stock looks way too expensive when compared with bargain-priced retail rivals with impressively resilient performance.

If you think J.Crew's enough of a class act to warrant its crazy stock price, we'd like to hear your thesis. ...

It's worth noting that this article is just one person's opinion on J.Crew's current stock worth. :)

What are your thoughts on the article? Do you disagree or agree with the advice offered? Would you consider purchasing J.Crew stock? :)

J.Crew's Stock: It's Been A Tough Time Lately

Over at Barron's, the following was mentioned about J.Crew's current stock price (click here for link):

Restaurants Losing Gold Medal; Coal Rules; J Crew’s Tough Quarter
August 21, 2008
Looking Forward to J.Crew's Tough-Quarter Results-
Anytime a chief executive has to extend an apology to customers, a company has been going through a difficult period. That’s the state that J. Crew (JCG) finds itself in: the stock fell to a low for the year in Thursday’s trading at just under $25, but has bounced off the low, adding 3% intraday. Don’t take the recovery as some sign of an all-clear, though: heading into next week’s release of second-quarter earnings, analysts are worried that the results are going to look like some unholy alliance of stripes and plaids. Sales growth has been tough to come by, adding an anemic 0.2% for the first couple months of the quarter. Then came July. And things got worse. The retailer undertook a conversion of its Website support system - an initiative that didn’t go so well. Processing times slowed, delivery schedules stretched out, and the system had a tendency to orchestrate the odd anti-consumer initiative - such as throwing items out of the customer’s shopping bag. The downtime for direct sales stretched longer than anticipated, and costs mounted. The problems haven’t all be remedied, analysts said.

I am surprised to see the website issues being mentioned as a reason for the stock price sliding. I feel as though that issue gets barely mentioned, or left as a side note, in the reporting. I am hoping that J.Crew can recover nicely from this all (especially since I bought their stock when it was around $48-ish). :)

Are you surprised by the stock price's steep decline? Do you predict an upswing for the stock price? What are you recommendations to turn things around for J.Crew?

J.Crew Orders: Are You Getting Them? :)

"Thanks!" to Anonymous at 9:33 AM (in the "Seek & Find: Will you visit J.Crew this Weekend?" post) who came up with a great topic for a post. She suggested a discussion on how many older final sale items that we ordered actually get mailed to us.

Many of us ordered items in the Final Sale awhile back, that were wait-listed. Now some of those items are reappearing on the website's sale section as "in stock". Have those items, already ordered, been fulfilled or have they been canceled? As an example, Anonymous at 9:33 AM mentioned her situation: "I added the paper poplin rain jacket, the katie sweater, the popover blouse, the martine pink hibiscus cardigan and many more items (yes, they have just sat there with no activity other than to have items drop off cancelled) BUT for instance--the katie is still showing in stock/OPEN as is the piper seaglass blouse. I wonder if I will get these items?!"

I should also add that I have noticed that J.Crew's sale section still shows items as "in stock" and ready to purchase when they are actually not. As a result, I have gotten into the habit of placing orders over the phone (to check the items true status). I must have called J.Crew's customer service at least ten times in the past week to verify if the "in stock" item online is available for me to order, and I would say that at least 90% of the time the CS told me that the item is not in stock. Although I am disappointed at not being able to order the item, I am grateful that I did not place an order only to have it cancel (or worse) on me later.

Have the items you ordered on "wait list" been sent to you already (or are you still waiting for them to be shipped)? Have you seen those items (that you have been waiting for) available in the sale section as "in stock"? In general, have you been able to order & receive your J.Crew online purchases in a timely manner and error free? ;)

J.Crew News: Stock Slides Further & Excess Inventory

"Thanks!" to Montrose who shared with us interesting (and sad) news about J.Crew's stock price.

J.Crew shares sink lower on downgrade
By Associated Press
Article Link
November 12, 2008

Shares of J.Crew Group Inc. continued to slump on Wednesday, after an analyst said the apparel company is discounting at levels that might harm results and downgraded it to "Sell."

J.Crew shares lost $2.26, or 16.3 percent, to $11.64, after earlier sinking to a new all-time low of $11.60. The stock has dropped to a new all-time low each day this week. Previously it traded in a 52-week range of $13.60 to $51.96.

Brean Murray, Carret & Co. analyst Eric Beder wrote in a note to investors Wednesday that J. Crew is being hurt by a weak economy and a customer base not shopping for J.Crew "bread and butter basics." He said surveys and store tours have shown J.Crew is becoming "more and more aggressive," to clear out inventory.

"We believe that it will not be until the first half of 2009 before the company has fully right-sized its inventory position, Beder wrote. "As such, even with J.Crew trading near all-time lows, we believe there remains significant risk in the story."

He downgraded the company to "Sell" from "Hold" and set a $12 price target on the stock. Beder also cut his 2008 earnings estimate to $1.24 from $1.49 and his 2009 earnings estimate to $1.28 from $1.92.

"We do not believe the J.Crew business model works at the current levels and depth of price cuts," he wrote.

In another article Montrose sent (click here), J.Crew was said to be "entering the third quarter with an additional $15 million in goods".

I did not think that some of the price cuts were that steep, although they have had a lot of sales recently (in their stores) that were at an additional 40-50% off (which my local stores had never carried before). I have also definitely noticed an increase in promotions (e.g. emails). However, some of those promotions were not always the most attractive offers. It will be interesting to see how J.Crew alleviates themselves from the excess inventory without damaging their brand perception. J.Crew, like most other retailers, will be facing some hard times this holiday season.

What do you think of the articles? Do you think J.Crew is discounting prices that will harm them? How do you think J.Crew should liquidate its excess inventory while preserving its brand image?

J.Crew Investors: Conference Call Today

According to J.Crew's press release on their website (click here for link to "Investors Relations"), they are having a conference call today "to review its second quarter fiscal 2008 financial results." The broadcast will be "live over the Internet on Tuesday, August 26, 2008 at 4:30 p.m. Eastern Time" and will be "available by clicking on the 'Investor Relations' section of the Company's website at www.jcrew.com."

The following image is the stock price so far. I am curious to see where the stock price is at the end of closing day today. :)
Will you be watching the conference call live today? Do you own J.Crew stock? Have you been pleased with their past performance over the last quarter? Would you recommend buying J.Crew stock now?

J.Crew's Outlook Takes a Hit

The following is an article from Market Watch (click here to read in its entirety) about J.Crew's most recent performance:

J. Crew, industry darling, hit on outlook
By Andria Cheng
August 27, 2010

J.Crew Group Inc., which has had a streak of growth that outpaced its rivals and exceeded Wall Street expectations, saw its shares hit on Friday after the company lowered its outlook for the year and its third-quarter outlook also fell short.

"The continued economic uncertainty that we are all seeing is leading us to take a more conservative outlook for the back half of the year," Chief Executive Mickey Drexler said on a conference call late Thursday. "The customer is more selective with their purchases. More than ever, they are focused on newness. The headline is 'They're deferring. They're waiting. They're comparison shopping and people are a little nervous."'

J.Crew shares fell 7.3% to $31 in early afternoon trading, their biggest percentage decline in at least a year.

The clothing retailer cut its full-year outlook to a range of $2.25 to $2.35 a share from a previous projection of as much as $2.45 a share. The company forecast third-quarter profit of 55 cents to 60 cents a share. Both projections fell short of analysts' estimates.

Economic impact aside, analysts said some of J.Crew's fall merchandise also has been too edgy and not resonated as well with its customers. The company also may have been hurt by increased competition from rivals from Ann Taylor Stores Corp. to Talbots Inc. that have also offered embellished tops and other looks that are similar to J. Crew's offerings, analysts said.

Still, Wall Street likes the stock. Among 20 analysts tracked by FactSet, more rated the stock a buy than a hold with only one underweight rating.

"Weak guidance was attributed to weaker spending trends, but we suspect some fashion missteps may have played a role, too," said analyst Linda Tsai of MKM Partners in a report. "This is not completely unusual and a bit reassuring, as we think (J.Crew) can correct this for Holiday. (We) still think stock is attractive."

Regarding the company outlook, analysts said a 10% increase in inventory growth per square foot at the end of the second quarter may likely translate to some profit-eroding discounts if demand falters.

"Given that (J. Crew) does not have strong ability to cut orders, we expect accelerated promotional activity resulting in margin pressure," said analyst Pamela Quintiliano at Oppenheimer & Co.

To lift growth, the company for the first time is bringing its factory outlet products online for sale. It also has opened its first wedding store and is opened more locations just for men as well as its Crewcuts for kids.

The warnings came after the company reported second-quarter profit surged a better-than-expected 88% to $34.9 million, or 53 cents a share on an 11% comparable store sales gain. Analysts surveyed by FactSet Research had forecast earnings of 45 cents a share.

Interesting what is going on with J.Crew! I hope they are able to get things back on {fashion} track with the Holiday roll-out. :)

What is your take on the article? Would you consider purchasing J.Crew stock? Do you think J.Crew will perform better in its next quarter?

J.Crew Stock is on the Rise {oh yeah!}

There is an interesting article over at Forbes (click here) about J.Crew's stock price and its recent positive trend.

J.Crew climbs as analyst lifts to 'Outperform'
By Associated Press
August 18, 2009

Shares of J.Crew Group Inc. surged Tuesday, getting a boost from a ratings upgrade and price target increase.

BMO Capital Markets analyst John Morris lifted the retailer to "Outperform" from "Market Perform" and raised his share price target to $35 from $25.

In a client note, Morris said the New York-based company is laying the groundwork for a strong long-term performance partly on signs that its fall merchandise is off to a good start.

"Our sources close to the company also confirm that not only is the merchandise trend-right, but it is differentiated to the competition - a major positive," the analyst wrote.

The recession and budget-conscious shoppers have also led many department stores to play it safe, giving J.Crew a chance to eat into market share, Morris explained.

"We think J.Crew is getting the benefit of shoppers veering away from the ultra luxe high-end department stores in favor of J.Crew's more affordable wares in this environment," he said.

Morris raised his second-quarter earnings estimate to 20 cents per share from 12 cents per share. Analysts surveyed by Thomson Reuters, whose estimates normally exclude one-time items, predict profit of 14 cents per share.

J.Crew's stock gained $1.84, or 6.5 percent, to $29.97 in afternoon trading. The shares have traded in a range of $8.02 to $38 over the last year.

This is wonderful news for J.Crew's stockholders (including myself). I am happy to hear that J.Crew is still outshining its competitors through its "trend-right" merchandise. Yey!

What are your thoughts on the article? Do you disagree or agree with the comments about J.Crew, including their ability to differentiate themselves well? Do you think other retailers are playing it "too safe"? Would you consider purchasing J.Crew stock? :)

Retailers {+ J.Crew} Learn from the Recession

The recession has changed the way retailers do business. The following Associated Press article takes a look at how some retailers (including J.Crew) have addressed their methods of operation. (Click here to read it in its entirety.)

Lessons of recession resonate with retailers.
Thin small. Cut prices. Emphasize Value.
By Anne D'Innocenzio
September 12, 2009

The "Great Recession" and Americans' retreat into thriftiness are teaching retailers a new lesson: how to survive when consumers are focused on "needs" rather than "wants."

For years, shoppers splurged on everything from $5 lattes to $200 jeans, and retailers responded by opening more stores and offering more choices. Now, beset by high unemployment and limited access to credit, shoppers are limiting most of their purchases only to essentials or the best deals.

Retailers' first response to the sudden and sharp pullback in spending last fall was to offer deep discounts and more coupons to keep merchandise moving. But to survive over the long haul, the watchword for stores and product makers is "small." ...

The changes are likely to last for years. Americans are also getting used to their newly adopted frugal habits of saving more and spending less. "I don't think we are going to go back to business as usual," said Steve Sadove, chairman and CEO of Saks Inc., operator of Saks Fifth Avenue.

As companies woo buyers, shoppers are finding they're in control. And they're driving hard bargains. ...

Less is more
For retailers, the changes need not be devastating. In fact, those that survive will be leaner and more efficient.

"There's nothing like a good old-fashioned recession to make you run a better business," Millard Drexler, J.Crew Group chairman and CEO, said recently.

To stay in business, stores find they can't take big chances with what they put on the shelves and how much they stock of each item.

Merchants are now keeping less stock on hand and delivering goods into the store more frequently to keep stores looking fresh. Retailers hope that strategy will help cut down on discounting.

Apparel companies also are focusing on the most popular colors instead of oddball hues.

Power of lower prices
Manufacturers and retailers that held firm on pricing a year ago to try to protect their brands have felt the sting. ...

Price cuts are painful, so manufacturers and retailers maneuver to avoid them by identifying goods with strong demand. If they must cut prices, they cut costs, too, to maintain profit margins.

... Stores are putting more stock in store-label products, which cost less for consumers and tend to be more profitable. This year, 37.5 percent of business is expected to be from store brands, according to a National Retail Federation survey. Two years ago, that figure was 26 percent. That could go to 50 percent in the next few years, says C. Britt Beemer, America's Research Group chairman.

Marketing value
Consumers' focus on value and saving money has shaped how products are marketed as well. Sellers are becoming more sympathetic to consumers' woes in their ad campaigns.

In the past, "retailers had a hard time acknowledging (in ads) when things were bad," says Ellen Davis, a spokesman at NRF. They feared it would make business worse.

Now, higher-priced products like Hefty's odor-blocking trash bags are advertised as money savers because the garbage won't get so smelly that it has to be changed before the bag is full.

Consumers aren't going to be "hyped" to buy merchandise anymore, says Konheim of Nicole Miller. They want to be convinced that they're getting more value.

Even though this article shares a lot of information that we already know, I thought it was still quite informative. In particular, I have found myself cutting back from shopping this year. Moreover, the value of an item matters more to me now.

J.Crew's current strategy is to focus on reducing their inventory levels while selling unique goods at full retail price. They are not offering those amazing deals and sales, like we saw last Winter. What's interesting about this is that their competitors are still offering amazing deals left and right. Despite this heavy competition, J.Crew is outperforming them (& investors expectations)- so they are doing something very right.

What are your thoughts on the article? Do you disagree or agree with any of the points made? Do you find your shopping totals has been reduced or stayed the same level since last year? :)

WSJ Declares Drexler as "The Retail Therapist"

As mentioned in Thursday's "J.Crew CEO Mickey Drexler Is On Top" post, the Wall Street Journal has an in-depth article on J.Crew's Mickey Drexler.

A big "thanks!" again to Raina for letting us know about it on Thursday & for sharing the video below from Racked (click here). Another big "thanks!" to Suzy (in this post) who let us know that the article is available online today! :) The following is an excerpt of the article (click here to read it in its entirety).

Mickey Drexler: Retail Therapist
By Tina Gaudoin
June 10, 2010

It was Steve Jobs who informed Millard “Mickey” Drexler that he was about to be fired from Gap, a company he had taken from $400 million in annual revenues to $14 billion and from 450 stores to more than 2,000 in the span of 19 years. “Steve, who was on the board, called and told me the night before,” Drexler says, recalling their May 2002 conversation. He knew it was coming. Although he’d been celebrated in the media for years as the “merchant prince”—the man who had the answer to the curious riddle of retail (just how do you get a customer to buy more than one pair of jeans?)—Gap’s growth had stalled in the two and a half years leading up to his firing: Same-store sales had dropped by double digits every quarter between 2000 and 2002 and the stock had plummeted 75 percent.

...The Wasp privilege–meets-street-smart-kid vibe has become Drexler’s calling card. At Gap he turned the wearing of khakis into an art form (who can forget the Ernest Hemingway wears khakis campaign?), and now at J. Crew he is spinning sequins, combat pants and cashmere into a raging success story. In 2005, the company turned its first profit in five years, and between 2003 and 2008 revenues rose 107 percent. In 2006, Drexler presided over a very successful IPO. In 2009, revenues ($1.57 billion) exceeded pre-recession levels and same-store sales climbed 11 percent. Profits jumped 40 percent. When Drexler took up the reins in 2003, J. Crew had $609 million in debt and 196 stores. Today, it has 321 stores, less than $50 million in debt and $298 million cash on hand.

The first family are fans: All four wore the brand during last year’s inauguration festivities. Though he won’t discuss his most famous customers (“We respect their privacy”), he does admit to checking sales figures after Oprah wore, and waxed lyrical about, the company’s shoes this spring during a segment with executive creative director Jenna Lyons. He was also pretty happy when the Queen of Media admitted to her 5.6 million viewers: “When I saw the first lady, even before she became first lady, wearing J. Crew—full disclosure here—I bought some J. Crew stock. And that was a very good decision.” (The stock has risen 119 percent since Michelle Obama appeared on “The Tonight Show” in a yellow J. Crew ensemble in fall 2008 and 132 percent since Drexler took the company public.)

So what drives Mickey Drexler? A man so obsessed and passionate about his job, the customer and the product that he personally answers shoppers’ emails and telephone calls, makes split-second decisions about entire lines based on “a gut feel,” talks to his 695-strong team constantly via an elaborate intercom system and treats routine store visits (of which he makes at least five per week) as a holiday: “They don’t count as work.”

...“Whether you have wealth or not is irrelevant when it comes to appreciating quality—even if you can’t afford it, you can respect it,” Drexler says to an assembled team of designers, buyers and merchants before they begin their fall 2010 holiday presentation for “the boss,” who, coincidentally, is a disciple of The Boss and quotes from him often, telling everyone today, “We practice every day, as Bruce says.” The atmosphere at J. Crew’s headquarters in downtown New York is a heady mix of adrenaline and nervous anticipation. Fake snow flutters behind fake cabin windows and somewhere a vague cinnamon scent emanates, desperately evoking the spirit of December on this unseasonably warm spring day in April. ...

...“The customer can tell you a lot,” Drexler says. “They can give you feedback on fit and specs on operational issues even, but they can’t tell you what’s coming down the road. For that, you are always listening and learning, but when it comes to the fashion part, it’s having a certain creativity; it’s getting a sense of how the world changes.” It’s also having keen business acumen, something TPG Capital co-founder James Coulter, who joined J. Crew’s board at the time of his firm’s acquisition, sees as being overlooked in Drexler. “So much is written about him as a merchant. Rarely does anyone write about the power of him as a businessman. He has to lead all the way from the drawing of the piece of clothing to the checkout of it at the store.” ...

Love, love, love this article! It is super fascinating to read about Mickey Drexler's story with J.Crew and all the events leading up to their recent success. And the video is just as awesome!

What are your thoughts on the article & video? Do you like Mickey Drexler more or less after reading this article? Any points you found particularly interesting or note-worthy? If so, please share! :)

J.Crew's CEO Drexler In the News

"Thanks!" to Lynn who let us know about some recent J.Crew news over at Barron's (click here). According to Fly On the Wall (a site that recapped the Barron's article, click here to read):

J.Crew CEO sold half a million shares
Barron's reports from September 1-3, the CEO if J.Crew Group Millard Drexler, sold 500,000 shares for $16.2M, an average of $32.58 a share. The sales were made indirectly through trusts, through which he continues to own 2.9M shares. He also owns 110,000 shares directly.

In the last 12 months the stock gained 12.7%, while peers tracked by the Dow Jones Apparel Retailers Index tumbled 7.3% and the overall market slumped 21%. Most of the rise is attributed J.Crew's thrust into the spotlight during the 2008 presidential election, when style icon Michelle Obama wore the brand.

Drexler's sales came just after J.Crew reported better-than-expected Q2 profits on August 27. Lon Juricic, president of StreetInsider.com, notes that he's "not concerned" about the sale, given Drexler's record of accomplishment during the recession. However, Juricic notes that for those wondering if the stock is range-bound after rallying so significantly, Drexler's move doesn't indicate more upside.

Also, there was another article (click here for the article in its entirety) that mentioned the following:

InvestorSoup.com issues Technical Trading Outlook for J.Crew Group Inc.
By emailwire.com
September 08, 2009

...J.Crew Group Inc. (JCG) is an apparel and accessories retailer. The Company promotes itself as embracing a high standard of style, craftsmanship and quality. JCG identifies its customer base as primarily affluent, college-educated and professional and fashion conscious women and men. As of August 27, 2009, the Company operated 242 retail stores (including 216 J.Crew retail stores, nine crewcuts stores and 17 Madewell stores), the J.Crew catalog business, jcrew.com and 78 factory outlet stores.

In the report, the analyst notes:

“Many U.S. retailers have reported concern over the health of the 2009 back-to-school shopping season (mid-July to mid-September) as consumer spending remains low due to continued concerns over the economy and job security. Retail apparel sales figures for July were sluggish as consumers funneled their spending on necessities, and lower inventories across the industry led to fewer markdowns. However, on August 18, 2009, BMO Capital Markets analyst John Morris reported that JCG is positioned to capture market share from department stores during the season. Morris noted that JCG’s business for the season was off to a strong start because it managed to differentiate itself from the competition and offer ‘trend-right’ merchandise.

“When discussing the Company’s outlook for the three months ending November 1, 2009, Millard Drexler, JCG’s CEO, said that the current strategy was to build its product rather than cut costs in response to market conditions. Drexler said that selling unique goods was the Company’s prime objective as consumers continued to purchase products that they liked at full price." ...

Some very interesting tidbits from both articles!

What are your thoughts on Drexler's recent sale of stock? Any of the points made in the article (e.g. who the target customers are, how they are differentiating themselves, etc.) that you found interesting? Do you think that J.Crew is properly executing the strategy of building product to sell unique goods? :)

J.Crew Stock Upgraded to "Hold" :)

The following is an article found on Business Week Online (click here for the link):

Analyst upgrades J. Crew as sales seen improving

NEW YORK | July 7, 2008

An analyst on Thursday upgraded J. Crew Group Inc. to "Hold" from "Sell" and said the apparel retailer has likely issued overly cautious second-quarter guidance. Since its first-quarter earning report on May 29, shares have fallen 32 percent, partly due to a disappointing second-quarter outlook.

However, Citi Investment Research analyst Kimberly Greenberger said there is upside potential to the guidance."We believe management's guidance is overly cautious and the second quarter is likely running inline to slightly better than expected," Greenberger wrote in a note to investors.

June sales likely improved from April and May, she added. "If improving June sales continues into July, we believe there could be upside to management's cautious second-quarter earnings per share guidance," she wrote.

She upgraded the New York company to "Hold" from "Sell." Shares rose 58 cents to $32.67 during midday trading.

This article paints a positive outlook for J.Crew's immediate future (and as a stock holder, I am thrilled about that!) However, I have to wonder if the recent (and unforeseen) system upgrade/ website fiasco is going to impact J.Crew's sales enough to hurt their stock price...

The First Family Helps J.Crew Stock {wahoo!}

As {almost} everyone is aware of by now, the Obama's each wore an item from J.Crew at some point during the inauguration. The {great} image above, which comes from Racked (click here for post), illustrates this point beautifully. :)

As many of you mentioned, J.Crew's shares jumped more than 10% as a result of the increased exposure. As someone who owns their stock, I am t-h-r-i-l-l-e-d. My only hope is that this positive trend can and will continue. ;)

Shares Jump More Than 10 Percent In Trading
January 22, 2009
Click here for post link

Shares of J.Crew Group Inc. jumped after news spread that the first family donned items from the retailer during this week's inauguration.

President Barack Obama wore a J.Crew white satin bow tie to all the Inaugural Balls Tuesday night. First lady Michelle Obama wore J.Crew gloves, a sweater and skirt from the company to different events. And daughters Malia and Sasha wore coats, dresses and other items from the retailer to various occasions celebrating their father's inauguration.

While the items were made specifically for the Obamas, J.Crew said customers can see highlights or similar items in upcoming seasons. Shares of J.Crew jumped 96 cents, more than 10 percent, in trading Wednesday to close at $9.99.

What do you think of the jump in J.Crew's stock price? Do you think this will have a long term, positive effect on J.Crew? In order to capitalize on the recognition, do you think this will finally prompt J.Crew to fix that website of theirs? ;)

J.Crew Stock Holding Its Own {& more!}

J.Crew's stock is performing well and the financial analysts are loving it! Over at TheStreet (click here), they share the following insight:

Southwest, J.Crew Lead High-Flying Stocks
By Jake Lynch
December 14, 2009

J.Crew Group(JCG Quote) rose 2% to $45.07. The clothing retailer's shares climbed on news that November retail sales increased 1.3%, twice as much as expected.

Snapshot: Third-quarter profit more than doubled to $44 million, or 67 cents a share, as revenue increased 14% to $414 million. J.Crew's gross margin widened from 45% to 48%, and its operating margin doubled from 9% to 18%. The company has $247 million of cash and $99 million of debt. Over a three-year period, J.Crew has grown earnings per share 84% annually, on average.

Our take: We rate J.Crew "buy." J.Crew outmaneuvered competitors during the recession and took steps to improve its balance sheet, evident in its $147 million of net cash. The stock has climbed 30% during the past three months. It's more expensive than the average specialty retailer based on all of our valuation measures. The premium is justified by growth expectations.

What are your thoughts on the article? Disagree or agree with any of the points made? Do you think J.Crew should be rated as a "buy"? Do you think J.Crew has "outmaneuvered competitors"?

J.Crew's 8th Sample Sale {starts today!}

As mentioned previously (refer to the March 4th "J.Crew's 8th Sample Sale Coming Soon {didn't see that coming, did you?}" post) ClothingLine (click here) will be hosting yet another J.Crew sample sale in NYC. This sale starts today! For the event's days/hours, view the image below (click here to view it larger).

The event information includes the following:

• For Women only
• Spring merchandise
• Samples / sample size clothing
• Stock / stock sizes footwear
• Stock jewelry
• Limited sample accessories
• Footwear & accessories are final sales

The location for the event is:

Clothingline | SSS Sample Sales
261 W 36th Street
(between 7th & 8th Ave)
2nd Floor
New York, NY 10018

Will you be attending this latest sample sale? If you are, please let us know! If you could also share any information (e.g. merchandise selection, quantity, prices), it would be greatly appreciated. :)

J.Crew Stock {kicking butt!}

J.Crew stock is on the rise! According to an article over at SeekingAlpha (click here):

J.Crew (JCG) Up $1 Before Earnings
By Jon Najarian
March 8, 2010

Our pal Jim Cramer told investors Friday night on his "Mad Money" show that he was buying J.Crew ahead of its earnings results tomorrow. JC called JCG "the finest retailer in the country," with strong management and easy comparisons. Shares are trading at $46.80, up from Friday's close of $45.61.

There's no doubt that J.Crew is performing, and performing well at that! As a stockholder, I am thrilled with this news. Here's to wishing J.Crew another strong year! :)

Incidentally, J.Crew will be broadcasting their review of the fourth quarter, as well as the 2009 fiscal year, this afternoon. The broadcast will be available live over at www.jcrew.com (click on the "Investor Relations" section) at 4:30 PM.

Would you consider purchasing J.Crew stock? Do you think J.Crew will continue to perform well? :)

J.Crew Holds Sample Sale In NYC This January {yey!}

A big "thanks!" to Cortney who let us know that J.Crew will be having a "sample sale" (clothes for women, men, Crewcuts, including shoes and accessories) starting January 21st (click here for more info). Cortney also shares with us that "there has never been a public sample sale before", so this is very exciting news! :)

Clothingline describes sample sales as the following:
The term Sample Sale originally meant a sale of designer's samples. Samples are what designers use to show their collection to buyers and owners of retail stores. At the end of a season, the designer no longer has a need for these samples. So, once or twice a year they sell the samples to the public, where they usually would be sold at wholesale prices. Usually, the selection would be limited in pieces and sizes.

Today, many of these designers have taken this one giant step forward... Stock Sales. After a manufacturer has shipped their merchandise to their stores, there is usually inventory leftover. This leftover merchandise is often supplied to us, to be featured in one of our stock sales. Our Stock Sales are open to the public, where you can find the latest fashions, from the top designers at savings from 50% to 80% below retail prices.

The address for the location is:

Clothingline | SSS Sample Sales
261 W 36th Street (between 7th & 8th Ave)
2nd Floor
New York, NY 10018

If you are interested, the link above also shows dates for samples sales of alice + olivia and Tory Burch. :)

If you live in the area (or are visiting NYC in January), are you planning to attend J.Crew's sample sale? If so, please let us know about the event! :)

J.Crew News On Stock Price & Outlook

As mentioned in an earlier post (click here), J.Crew stock is under $10. A new article (click here) came out today, that had some interesting tidbits about J.Crew.

Ahead of the Bell: J.Crew Group
By Associated Press
November 24, 2008

J.Crew Group Inc. has been increasingly cutting prices to move inventory sitting on shelves which will likely pressure the retailer's results over the next several quarters, analysts said Monday. The New York company reports third-quarter results on Tuesday.

Needham & Co. analyst Christine Chen said she expects a "challenging holiday," due to high inventory levels, despite increased promotional activity. Retailers across the board are suffering as consumers shop mainly for necessities only amid financial-market turmoil, tight credit markets and a prolonged housing slump.

"Although clearance stores appear to be reasonably clean, we have seen the level of promotions in both the direct business and retail stores, through J.Crew's famous secret sales, continue to increase," wrote Chen, who rates the company "Buy." "We suspect J. Crew still has too much Summer/Fall inventory, which has resulted in higher markdowns in order to make room for new Holiday floorsets." She lowered her estimates for the third and fourth quarter as well as 2008 and 2009 to reflect a continuing difficult environment and cut her price target to $15 from $32.

Meanwhile, Brean Murray, Carret & Co. analyst Eric Beder said in a note to investors Monday that he is also concerned about inventory levels, and doesn't expect improvement until the second half of 2009. "With the stores remaining heavily discounted, investors have now put J.Crew, in our opinion, correctly on the clearance rack," Beder wrote. "The discounts have kept coming, from higher sales on clearance items, to more and more e-coupons and inventories bulging at the store level."

However, he raised his rating on the company to "Hold" from "Sell" due to the decline in the stock's value. Since the beginning of the year, J.Crew shares have fallen 81 percent. "We believe the drop in J.Crew shares now reflects the potential for a material miss tomorrow when the company announces third-quarter results," he wrote.

I appreciate hearing the views of the two analysts in this piece (especially since one recommends to "hold" while the other recommends to "buy".) It is clear that J.Crew has been doing a lot of promotions lately and that is impacting them.

As mentioned in an earlier post (click here), J.Crew is having a conference call tomorrow to review "third quarter fiscal 2008 financial results." It will be interesting to find out how top executives address the concerns mentioned in this article.

How Much Does The J.Crew Team Make?

If you were ever curious about how much the executives at J.Crew earn, here is a glimpse of their retail experience and what they take home per year. All I have to say is, it's good to be them! ;)

Millard S Drexler
63 years old
CEO/Chairman of the Board/Director at J.Crew Group, Inc.
New York, New York
Officer since January 2003
Director since March 2003

"Mr. Drexler has been our Chief Executive Officer, Chairman of the Board and a director since 2003. Before joining J.Crew, Mr. Drexler was Chief Executive Officer of The Gap, Inc. from 1995 until 2002, and was President of The Gap, Inc. from 1987 to 1995. Mr. Drexler also serves on the Board of Directors and Compensation and Nominating and Corporate Governance Committees of Apple, Inc."

• Cash Compensation = $2,153,417
  [Salary: $200,000 + Bonus: $1,504,000 + Latest FY other long-term comp: $449,417]
• Stock Options = $806,206

Tracy Gardner
44 years old
President, Divisional at J.Crew Group, Inc.
New York, New York
Officer since March 2004

"Ms. Gardner has been our President- Retail and Direct since 2007 and, before that, was Executive Vice President, Merchandising, Planning & Production since 2004. Prior to joining J.Crew, Ms. Gardner held various positions at The Gap, Inc., including Senior Vice President of Adult Merchandising for the Gap brand from 2002 to 2004, Vice President of Women's Merchandising for the Banana Republic division from 2001 to 2002, Vice President of Men's Merchandising for the Banana Republic division from 1999 to 2001 and Divisional Merchandising Manager of Men's Wovens for the Banana Republic division prior to 1999."

• Cash Compensation = Total: $1,771,888
  [Salary: $684,600 + Bonus: $875,000 + Latest FY other long-term comp: $212,288]
• Stock Options = $39,000*

To view what another 9 top executives at J.Crew earn per year, click here.

I personally believe that both Mickey and Tracy are worth what they earn. (Although there is some questioning about Tracy's recent stock selling.*) Feel free to disagree or agree with me. :) What I find especially interesting is Mickey's (1) salary (which is rather low for a CEO of a firm like J.Crew) and (2) bonus (which is rather high in comparison to his salary, but I guess that is to make up for his salary). I also am curious about the decision process when it comes to distributing bonuses for the top level executives at J.Crew?

What do you think of these figures? Do you think these J.Crew executives are worth their paychecks? What do you think of Mickey's salary/bonus?

J.Crew's Deal To Go Private {you've got some explainin' to do}

"Thanks!" to wellfedfred (in this post) and my husband (who left me the article this morning to read) about the most recent news from WSJ about J.Crew's deal to go private (click here to read in its entirety):

Inspecting J. Crew Deal in the Mirror
By Dennis Berman
November 30, 2010

It may be well-accessorized for the season, but something still looks off about the leveraged buyout of J.Crew Group Inc.

Its $3 billion final price is defensible. And the transaction got all the proper legal sign-offs. Yet as private equity returns to the markets anew, it is important to see the buyers' opportunism at work.

Shareholders, take note of just how conveniently things fell into place for the company's new prospective owners—who happen to include its celebrated chief executive, Mickey Drexler, and its most influential board director, James Coulter. He is a founder of buyout shop TPG Capital, which is paying for most of the deal.

For TPG, the deal lets it put some of its $18.8 billion in cash to work in a company it owned once before. For Mr. Drexler, it's a chance to reinvest a third of the $330 million windfall he has already made as an 11.8% owner of J. Crew. More equity is likely on the way in this current deal, too..

TPG first took J. Crew private in 1997, and after a subsequent public offering, sold its final shares by 2009, clearing seven times its original investment. Still, Mr. Coulter has remained on the board.

Full details of the deal's origins will be released in coming weeks, and representatives for the parties involved weren't willing to comment. People close to the matter say TPG first made its interest known to Mr. Drexler. Under ideal circumstances, a CEO would instantly report this to his board, ensuring it kept full control of any sales process. The less time lapses, the more a board can manage the flow of information, dictate the terms of any offer and set the parameters for a CEO's engagement. That doesn't appear to have happened here.

It all recalls the $11.5 billion buyout of pipeline company Kinder Morgan Inc. in 2007, which was led by Chief Executive Rich Kinder and buyers including Goldman Sachs Group Inc. In that deal, it took two months before Kinder's board knew its CEO was plotting a buyout. Just last week, the company filed for an IPO, which Morningstar suggests will value the company at double its 2007 price.

Indeed, it was a number of days before Mr. Drexler alerted J. Crew's remaining seven board members, say people close to the transaction. They convened a special committee, which in turn hired bankers and lawyers to wrestle over how to proceed. The early days of the process were "messy," says one person close to the deal. The special committee did the best it could under the circumstances, rejecting the buyers' first $41-a-share offer. But TPG and Mr. Drexler, known as a "prince of retail," found themselves in a convenient circumstance.

The company was on track to post lousy third-quarter results. That was expected to hit the stock hard. People close to the transaction thus say the offer is welcome salvation for shareholders, who bought the company expecting growth and now would be paid a premium for their stock.

Another way to look at the $43.50-a-share offer is a way to time a J.Crew purchase at its weak moment. The stock is trading well below its 52-week high of $50.96. Indeed, in the deal's final days, the buyers "retraded" in Wall Street parlance, cutting its $45-a-share agreement at the last moment, says a person close to the deal. J.Crew does have time to find a better deal. And shares continue to trade at a price above the offer, a sign shareholders expect other buyers to materialize.

How shareholders feel may be a waning concern. Mr. Drexler and crew scrapped a planned live conference call last week and played a recorded message instead. It was almost as if Mr. Drexler was patting holders on the head as the company issued a curt, recorded goodbye: "Thank you for your time and interest in J.Crew."

Well this article doesn't make me feel warm and fuzzy about being a shareholder. That is for sure. The question of why does J.Crew have to sell immediately before shopping around is a good one.

What are your thoughts on this latest news? Are you a shareholder? Do you feel this deal will benefit shareholders properly.

J.Crew Pleases Customer {Consumerist Reports}

"Thanks!" to Kate who shared a post over at the Consumerist (click here to read in its entirety) about how J.Crew made one customer a very happy one.

J.Crew Replaces Dress Stained In Kindergarten Marker Mishap
By Laura Northrup
May 13, 2011

Some of the stories of good customer service that we post are simply tales of good customer service executed by competent employees. These deserve praise, but don't compare to true "Above and Beyond" consumer experiences. That's what Jeremy's family experienced from J.Crew after a terrible fate befell their daughter's new dress (not pictured.) They called the store to see whether the dress was in stock so they could buy a replacement. Instead, J.Crew stunned the family by exchanging the damaged dress for a new one at no charge.

"My wife recently visited a J.Crew store at [redacted] Mall in [redacted], NC and purchased a $40 dress for my 6 year old daughter. My daughter loved the dress, my wife loved the dress, everyone was happy! The next day, my daughter wears it to Kindergarten (she is very good at keeping her clothes clean and she often wears nicer outfits to school). We had no worries about it. That is, until she came home and had a large black stain on the front of the dress. The culprit: permanent marker from a fellow student.

My wife was devastated at the damage caused to such a nice dress, and I was just as devastated over the loss of $40. She attempted to scrub the marker out to no avail. By this time, we had already thrown away the receipt and thought we had no options but to purchase the same dress again, that's how much my wife loved it. Since the mall is a good 30 minutes from us, she called J.Crew to make sure they had the dress in stock. During the conversation with the woman on the phone, my wife explained what had happened with the marker and why she was visiting the store again. Much to our surprise, they offered to exchange the dress completely free of charge, no receipt required. They even offered to ship us the dress if her size was no longer available in stock.

My wife visited the store, she found the dress in my daughter's size, and the employee was incredibly helpful and kind throughout the whole situation. I couldn't be more happy at saving an additional $40, and my wife couldn't be happier with having our daughter's favorite dress back. I thought this was such an extraordinary example of a store going above and beyond to make the customer happy. And happy we are!"

Excellent work, J.Crew. And let this be an important public service announcement: keep permanent markers out of the hands of kindergarteners.

That is a great ending to the story! As much as I complain, I think J.Crew does a wonderful job in general of making their customers happy.

What are your thought on the story? Did you like or dislike the way J.Crew handled the situation? Please share! :)