J.Crew shares sink lower on downgradeBy 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?
I agree with you Alexis...at least online the offers have not been attractive at all and I have been buying less as a result.
ReplyDeleteI know that stores near me used to have an additional 40% off quite often over the years so that is nothing new so I don't think they are discounting more...
It seems they have been discounting less (online) to me and there have been several discussions on this blog to that effect as well.
More and more people are choosing to shop on-line. If JCrew wants to keep up, they need to offer 30% off everything plus free shipping like everyone else.
ReplyDeleteAnonymous at 7:48AM: I agree with you that the online offers have not been that attractive. Perhaps the store offers were the "deep discounts" the article refers to, but I do not think it was the online ones. :)
ReplyDeleteand bring back stackable coupons!!
ReplyDeleteI don't think JC has been aggressive at all, esp. compared to other retailers like Banana Republic. JC needs to offer free shipping, and/or a flat rate ship like $6 (ala Ann Taylor). Perhaps it is good that JC customer base is not buying ~ could be a wake up call to JC to get with it.
ReplyDeleteThe 50% off sale items last week was pretty agressive, but other than that I don't think JCrew has been doing all that much to get rid of inventory. Most of the codes/promos have been too restrictive. In the past I remember automatic promos of 25-30%off of product groups like outerwear, boots, sweaters etc.
ReplyDeleteI really think they are deluding themselves into thinking they can ride this thing out without the heavy discounts and I think they are very wrong. I've already decided this holiday season I won't buy an item unless I have a promo code or it's on sale. In my mind it is really silly not to because I am being inundated daily with coupons/promo codes and other deals. It just takes a minute to google a promo before check-out to for on-line shopping. I've also started an envelope in my bag for in-store coupons. I've never really been a coupon shopper but now I'm thinking why not?
I also think the lack of benefits to credit card users is really hurting them right now. Other retailers are just doing it better.
Anoy@7:59
ReplyDeleteJCrew has never had stackable coupons...
they used to NOT have you enter a code to take an additional percent off sale items and now you do...which makes it so you can't use the free shipping codes that might be available at the same time.
I actually have not bought anything in over a month, because the prices are so high, and the sales so unattractive. This is the longest I have gone without buying at least one item from J.Crew in the past three years.
ReplyDeleteMaybe it's time to bring back the automatic 30% off sales with free shipping coupons. Mickey, are you reading?
JCrew has always been more than just the B&M. They had catalogue shopping from the beginning and their internet site was light years ahead of the pack, before the recent upgrade of course.
ReplyDeleteIt's nice to see in-store promotions but they seem to be forgetting the virtual-store customers. Not everyone lives near B&M and some people just prefer to shop online, no matter how close they are the the actual store. It is a fact of life that many retailers have embraced. JCrew seems to be shifting focus to the B&M for promotions and limiting the online promotions. Perhaps they have massive inventory that is just not moving from the B&M, and the online inventory is doing just fine as it is centralized and likely easier to track.
I wrote a complaint email regarding the recent issues with the site and was told to call after my next online order and they would refund my shipping. I also mentioned the lack of good online promotions but they did not respond to that portion of my email.
If there really is a huge glut of inventory at the B&Ms, I guess we can all prepare for some major sales after Christmas when the stores start sending things back to the warehouse and there is a real need to clear it out.
and4mynextrick,
ReplyDeleteYes, I am waiting for the after Christmas sale. I think they are going to be amazing...
Mickey made comments a few months ago about how there are not going to be sales at JCRew...ha ha(I believe, if I remember correctly) but sounds as if he is wrong...
And if JCrew doesn't have big online sales...well, there is always new stuff to look forward too:)
Simple solution: Kick the sweater deal up to 25% or 30%, make it a promo deal vs a code, include men's and children's, then float a free shipping code. I bet they would see some inventory move.
ReplyDelete30% off sweaters would have done it for me! (and a free shipping code--wishfully thinking)
ReplyDelete20% just isn't enough for me to pull the trigger (for a paper thin sweater...I can hold out:)
Is it just my imagination or has the 20% off sweaters box online on the opening page gotten bigger and moved from the bottom corner to more center left? Hmmm. I wonder how this promo is going over? I have been tempted but not willing to pull the trigger for a measley 20% but thanks anyway for offering something...I guess better than nothing:)
ReplyDeleteAccording to the comments, the problem with JC is that their coupons don't give high enough discounts. Does that make much sense to anyone? Does anyone here besides Alexis actually own JC stock?
ReplyDeleteI personally don't feel that they have been *aggressive* about clearing out their inventory AT ALL! I actually think they have made it less enticing to shop with them, at least online. I know I ordered a lot more when the discounts were automatic and the free shipping codes were abundant (especially the no minimum codes)...now it is very rare that I order from the web at all, and shopping at the B&M is just not convenient for me, so I buy much LESS from J.Crew at this point...I doubt that I am the only one in this situation...
ReplyDeleteJeff, we are speaking from a consumer position, not a stock holder position.
ReplyDeleteOT: does anyone know why JC on-line will be out of something on sale one day then have it the next?
ReplyDeleteAnon at 9:31 AM: I would love to know the actual answer too! It is a bit disappointing (to say the least) to order an item, have it canceled, and then the same item for sale the next day. Although I have heard a couple of reasons like, "oh we just got some items returned so that is why they are online now..." :)
ReplyDeleteFFM, you have described my situation perfectly, as well! I love J. Crew's beautiful clothes but I just can't bring myself to purchase them if I don't feel like I'm getting a decent value (and there have been plenty of threads about how unrealistic J. Crew's prices have become!).
ReplyDeleteBack when J. Crew had their old website, I used to make a purchase every time there was a '% off' promotion because the discounts were automatic and I could use a free shipping code. Lately the higher prices, combined with weaker discounts and the lack of the ability to combine discounts with a shipping code has made purchasing from J. Crew much less attractive.
I've changed to using the in-store red telephone to get the '% off' discounts on the items I want, but now I've been told that the free shipping is no longer available on sale items through the red telephone....it has all gotten so complicated!
These days shopping at J. Crew has become more of a chore/game to me than something fun and relaxing. I still love to look, but unfortunately buying has become another story.
This is a tough audience. I am in the minority who does believe that j.crew is offering a lot on sale these days. Not always 50% off, or even 30% off, but I've noticed the time between when a product arrives in store at full price and when it is marked down has accelerated.
ReplyDeleteI don't think there is any pleasing the customers sometimes. J.Crew has to walk a fine line between markdowns and still maintaining a profit and growing at the same time.
No doubt there will be other commentors here who disagree with me or who point out that j.crew should be doing more. But I think they are suffering and I worry about the brand long-term.
It seems to me that Drexler is making some of the same mistakes at J.Crew that he made at Gap.
ReplyDeleteAdditionally, there is very little sense of brand identity left at J.Crew (is it 'collegiate'? 'classic-collegiate?' 'upscale?' luxury?' And roughly what age demographic is Drexler targeting) and this lack of focus is (ironically!) frustrating and alienating J.Crew's core costumer base.
And then there are website issues, policy inconsistency issues, customer care issues and quality issues to boot.
I haven't owned J.Crew stock in a while and I'm glad I don't.
I think you see the items marked down quicker because, to begin with, they're overpriced.
ReplyDeleteIf JCrew has really targeted the higher-end shopper, it's not working or else they wouldn't be in such a slump.
It's funny because I am in Investment Banking and Consumer Retail is one of my industries. I look at J. Crew's positions and it doesn’t look promising for the company. The company has a tough decision to make. These are there options.
ReplyDeleteThey can hold on to their excessive inventory to try to maintain their image and attempt to keep their stock from plummeting to appease their stock holders. Of course, this will mean they will have to reduce budgets by letting go of some associates and cutting corners. The merchandise will eventually go on sale since it will not have moved.
Or they can move their merchandise now and take a small hit this holiday season. This will allow them to at least bring in some revenue with no massive employee cuts. People need to be paid, creditors needs to be repaid, inventory needs to be cleared out, etc. The focus should be on staying afloat and open. The image can be worked on later when business becomes better.
If they are so concerned with their image being tarnished, they need to remember that the wealthy have cut back for the first time in decades. Retail is at an all time worse and everyone is scrambling to move inventory. Consumers aren’t going to budge this year for 20% off. Saks and Neimans already are pushing their inventory out with sales up to 80% with special codes and discounts on shipping now. J. Crew is one of the top retailers in this country along with Walmart and A&F. Everyone is suffering except Walmart…..who posted meager and less than expected revenue.
J. Crew better wake up now and take steps. They won’t attract new customers and tap into new money unless they make some changes. J. Crews near my home lay empty with the only warm bodies being those employed by the company. Meanwhile, Banana Republics are packed with consumers holding printed coupons and postcards promising 30% off all merchandise. I spent over $1000 on clothes for work 2 weeks ago at Banana Republic They were offering 30% off with a printed coupon I was sent. Tonight, I am picking up over $500 worth of clothing my twins and I picked out earlier this week for the store to hold. Why do you ask? I have a 30% off Friends & Family card in my bag that I can use at BR and Old Navy.
Wendy: I think you made some excellent points that I agree with. I have definitely noticed that a regular priced item goes on sale a lot faster than it use to. (Take for instance the Simone peacoat. It didn't take long for it to go on sale.) I also have a feeling that certain stores have been discounting quite a bit.
ReplyDeleteAlso, when I was thinking about the promotions... I remembered that they were giving out a lot of those $25-$100 rewards cards to (semi-randomly) selected customers. I am not sure if that promotion was successful or not. (Although, in my case, the $25 card caused me to spend an extra $100.)
However, I also think about some of the other, less favorable promotions, like increasing the discount on first time purchase with a J.Crew Credit card, from 15% to 20%.
I also think that many of us shop online (including myself) and I have not seen the same discounts or sales taken place online (either compared to the store counterparts, or even the online sales pre-upgrade). I think the online sales have gotten worse. So from that perspective, I think they have not discounted that much.
Also for those reasons, I have almost eliminated shopping online in favor of stores. Except I can't frequent stores as often as I would like- which means I have reduced my shopping overall. Maybe others are experiencing the same thing, which ultimate hurts J.Crew sales.
Maybe J.Crew would consider balancing the sales & discounts between their stores and online. So one is not as deep discounted while the other is not greatly discounted at all. Just a thought.
Wow this post was long! :)
I'm headed to Gap & BR in a little while with my 30% off F&F coupon too! I also loaded up my shopping bag on the web in case the in store items are gone. Way to go Gap/BR!
ReplyDeleteP.S. I still love JCrew and am really checking out BR because of the coupon. Cheers!
BR is suffering, they are in even worse shape than J.crew.
ReplyDeleteKeisha Kornbread: You made some excellent points. You are also right that J.Crew will have to make a decision relatively soon (as in now, since the holidays are nearing).
ReplyDeleteIt seems to me that J. Crew just needs to stop putting out so many new items; be more selective about what they roll out each time, so that they won't be forced to put so much on sale to make room for the new inventory. If they want to make room for the new items, they are going to need to be more aggressive in getting rid of the old merchandise. I find it hard to believe that they lose money even on items that are deeply discounted; their costs of production are so low (practically everything made in China). They just need to make sure they're not spending too much on overhead.
ReplyDeleteI think they may have had a better thing going before when things didn't go on sale as often, but were more reasonably priced.
JCrew has been acting as if their stocks hit all time high. -- Especially the online store. As such, I've spent a good amount of my budget else where. I mean, there have been really great copons/sales at Bloomingdales, Martin and Osa, BlueFly, Banana Republic, Shopbob, RevolveClothing, Nordstrom. I love JCrew, but not enough to donate(?) my precious money to you. Stop pretending JCrew, we all know what's going on! Show me more attractive coupons, or do deeper sales, then I will return to you!
ReplyDeleteJ Crew brought some of this on themselves, their computer upgrade fiasco has hurt them big time, and the timing of this upgrade could not have come at a worse time the tanking of the economy. In addition their quality of some of their items is bad, I found a hole in my cashmere sweater at the seam after 2 wearings, good thing I did not pay fp.
ReplyDeleteHas anyone noticed that when you call CS, you have to go through a big sales pitch before you get your question answered now? what a turnoff. The CS are under more pressure to sell then to help out customers.
I am cutting down drastically my spending with JC, I am unhappy with the quality of their sweaters , they are overpriced, and I hate to get ripped off by not being able to purchase at the stores to get the big discounts.
The quality does not match the price tag.
I know what you mean about the sales pitch. Here I was having horrible issues with my presale order and the gal had the nerve to be talking about my next presale order and how it would not happen again! I told her I would NEVER place a presale order again. Then she went on about how lovely my items is and how happy I will be with it. This just pissed me off more...I don't want a sales pitch and super duper cheery "Oh you will love it" The comments are irritating.
ReplyDeleteanthropologie is my favorite store and they very, very rarely have coupon codes online or large sales in general. i'm just glad that j.crew has sale coupons at all! :)
ReplyDeletei also got the gap, inc. 30% off... i may buy a couple of things, but for the most part i'm not impressed by gap or BR right now. i don't like the colors either store is using (especially all the red at BR!).
Lauren,
ReplyDeleteYes, I guess you either love BR or you don't. I really like them right now. Red is such a great neutral. Next to purple it is my go to color this season...there are so many shades but true red is the best. I wish JCRew would do more red and cut out the orangy/red tones.
IMO J Crew is offering nothing in comparison to the other retailers that each and every day have sent me free shipping and %off discounts enticing me to spend my $ with them. My email is bombarded daily--Garnet Hill, Boden, BR, Old Navy, Gap, Top Shop, Revolve, Blue Heaven, Bluefly, Macy's, Piperlime, NM, Saks...the list goes on. J Crew, I get an email, "come check out our new holiday gifts" or something to that effect but no discount, no free shipping. It's oh-so disappointing. They have led me to believe they are taking the first option mentioned by keisha. Hold on to merch and maintain stockholders while forcing employees out or perhaps store closings. I don't get it.
ReplyDeleteI think Mickey is probably having a very hard time sleeping with the decision to become upscale at such a time in our history among MANY other problems (and I DO feel badly for him-honestly, that would suck, these are tough decisions and it was obviously a vision for him.) I do love the unique clothing they are pumping out...but not the full retail price. Someone made a very valid point--the price is starting out too high and thus they are dropping it quickly in the form of in store promos. Look how many of us are willing to buy the new items when we are sent a 20% off priv sale coupon. I think that says a lot. If they wanna move some serious merchandise where they still make plenty of $, they should do 25% off everything with free shipping including sale (or perhaps a low flat rate for any sale purchase.) Like many others have agreed--we would buy things on our "new items loved" list. Aren't you STUNNED still no 20% off to help get a move on newer merchandise?? A lot of early Fall is not and has NOT gone on sale yet.
My store has had 40-50% off final sale MANY times in the past--this is not something new at all.
I ONLY shop at J Crew these days--that's it. Boden & Gap were getting my money before and occasionally BR or staples at Old Navy but Gaps' styles have gone down the tubes IMO. Boden has some enticing offerings and always offers me 20% off early (late summer/pre-season) with free shipping and free returns. It is only $10 flat shipping no matter how much you buy sale/non sale any time of the year PLUS NO TAX (that's often another T-shirt!) If I am not ready to buy it when it is still late summer--they eventually send out another coupon as they have done this week. It states 20% off and free shipping and % goes down as the week progresses. Only problem I have with them is that the things I loved in early, early Fall are now out of stock (sold out) or SO many weeks backordered that I wouldn't bother. Business is not too shabby for them by the looks of their inventory levels/sales.
Fortunately for J Crew, they have been getting all of my clothing $ for the last year. I love the new look/styles-they have just been "getting it right" for me BUT I will not buy at retail price (from ANYBODY-there's no reason to). I also realize now that I came back into the J Crew picture at a VERY bad time due to all of the policy change and website upgrade (that makes me laugh-upgrade). I am off to friends and family to get my kids some stuff at 30% off and I hope some tissue t-necks for myself;)
Sorry for the very long post--so many thoughts! I must care A LOT!
You only discount when you have excess inventory. You only have excess inventory when no one is willing to buy your stuff at your stated price. Also, if we're all trained to buy w/discounts + free shipping like other retailers offer, then you're not offering much when you (excuse my French), dick around with your customers.
ReplyDeleteYour policy changes are hard to follow, and your loyal customers will realize you are not the only one to sell cashmere.
During the 50% sale, you made all the store inventory disappear to the back, and then you completely restricted us from buying via online, even when we were in the store. Why?
Your Q3 numbers sucked beyond belief and your analysts attributed that to having too many sales. If you didn't have ANY sales, would you have even sold as much?
It seems that when times are changing, j.crew is the slowest to catch on, or maybe it's because they feel they are so "high end" they are ashamed to slap the word "sale" (oooh dirty word) on their windows or putting up signs. Thus, secret sales.
You guys are laggers...your policy of not stacking coupons, "one time courtesies", and crabby sales people are truly a turn off.
I wanted a serge pencil in bright blue but was going to hold out for a sale. One day I noticed that they were sold out and I was gutted. About a week later, they were back! I quickly called and ordered one and the CS girl said I was lucky, I got the very last one and that they will not be getting any more bright blue in this season and she encouraged me to buy the other colors as well. Then today, low and behold, 6 bright blue serges in my size. Could there really have been that many returns if it is so popular? BTW I know people have talked about this before, but how do you like your serges, I did end up ordering them in 3 colors (because I am a sucker)
ReplyDelete^OMG--so true--we are trained and it will only get worse with all of the discounts/free shipping being offered by other retailers--it sets a tone!
ReplyDeleteOh and my question. Do you think that they tell people that they will not be getting anymore of something so they panic (like I did) and buy more? Has this happened to anyone else?
ReplyDeleteI think the bottom line is that a lot of people are hurting financially right now, with the lousy state of the economy and many having lost their jobs and/or unsure of their job security. It's just not prudent to be spending precious $$$ on anything full priced right now, including J.Crew.... no matter how much we may love an item. I think many retailers realize this, thus the abundance of % off coupons, major sales, etc. That is the only way that they can get inventory to move. I understand that they still need to make a profit, and I do feel bad, but I have to worry about myself first... paying for necessities such as food, health insurance, a roof over my head. J.Crew items are not a necessity, they are a luxury at this point, to be purchased on sale or with a coupon. The days of shopping without thought or worry are gone, and J.Crew needs to realize this. As much as I love their clothes, I really have to question each item I purchase... and lately I find myself holding off more and more.
ReplyDeleteI'd love to pull the trigger on a couple of JCrew cashmere sweaters but 20% isn't cutting it, especially when I know that the quality isn't great. I'm single and make a very good salary, but after looking at beating my 401K and other investments have taken I feel like I need to reign things in. Now, I'm looking for value. Instead of buying one of JCrew's cashmere sweaters, I went to Lord and Taylor and purchased 2 cashmere sweaters for about $200. Yes, their styles and colors aren't quite as nice as JCrew's are but I've had better luck with their quality. Do I still want a heirloom henley? Yes, but now that I have these two good quality wardrobe staples from Lord and Taylor, I will just wait JCrew out.
ReplyDeleteAlso, The lack of a FF promotion especially for JCrew cardholders is almost criminal in my opinion.
Anon-11:32 thx i think we have all figured that out
ReplyDeleteUnfortunately, I won't be hoarding cashmere in my bombshelter because it:
ReplyDelete1) won't feed my family of 5.
2) will pill
3) is too pricey to give as gifts
4) will be cancelled as an order (but they'll charge you shipping on the stuff that DOES ship), then charge you shipping when it does ship!
I have to say, I have not been "wowed" by anything the company has done lately or put out. The new holiday catalog is a huge bummer to me, nothing really new or holiday-ish overall. I thought last year was much more glam and festive, this year its blah, and old hat stuff. I actually said out loud WTF when I got to the page of that hillbilly looking model jumping in the air with the straggly hair and rolled up jean shorts and boots. Yikes!
ReplyDeleteI also think that the pricing is going so high for "basics" and everything else, the sales are just offsetting the rising prices, we are all catching on. The jewelry is getting boring, same concept, different colors. Lets move on from the same cuff and necklace we have been slight variations of for over a year please. Shoes are getting to be ho hum as well. I think we are all fed up with the system mistakes as well, from what I hear from CS, they are going to be around into 2009. Great! One brightside is that my wallet is not hurting as much! Hopefully spring brings a breath of fresh air to the company and the economy as a whole!
Anon at 11:42 - I just posted this under another topic:
ReplyDeleteI purchase all of my cashmere at Ann Taylor because the price is right (promo right now, purchase 2 get 30% off, 3 or more 40% off, plus I can stack a 25% off plus free shipping coupon on top of that), and their cashmere is top quality. I have cashmere sweaters from over 7 years ago that are in pristine condition, no pilling, classic styles. You definitely get more bang for your buck.
With this promo I have gotten cashmere sweaters for about $65 each. HTH!!!
lily
ReplyDeleteThanks for the laugh!!
I have heard so many CS reps use the line...it will sell out...it is a gimmick...You bought 3 skirts! Yes, you were duped:(
ReplyDeletehttp://www.nytimes.com/2008/11/13/business/13RETURNS.html?_r=1&oref=slogin
ReplyDeleteKeep your receipts, kids! :P
Re: Serge pencil skirt in blue
ReplyDeleteI want one too. Almost 2 months ago, I called J Crew and asked if there would be more. CS told me they would have a lot more in December. I decided to wait. Whether this is true or not, we'll see. I was also told at the time that there would be more Donegal tweed jackets in December with the exception of the color black. Don't know if this will happen either. I remember calling along time ago when the Coppelle paisley jacket first appeared on the scene. They were selling out in my size, so I bought it full price! It's been on the website for $89.99 for how long now? Ugh!
Marietta re Ann Taylor cashmere: InStyle recently compared many cashmere sweaters from major retains and concluded that Ann Taylor cashmere was the best quality for the $$.
ReplyDeleteRe stock price: I wonder to what extent the CS problems we've all been experiencing are inside baseball--I used to be a 95% online buyer, but due to the price discrepancies and the shipping/inventory problems, I've reduced my online shopping-- and hence my overall J.Crew purchases--substantially since July.
And of the online or Red Phone orders that I've placed since then, half have had CS issues. I'm not talking unpleasant CSRs here, but rather real, tangible problems --cancelled or lost orders, duplicates shipped, wrong item shipped. And from the comments here I know I'm not alone.
Yet I'm surprised to see that these problems aren't mentioned very often in the financial analysis. Is it that the analysts focus on B&M, that the shipping problems are less apparent to the outside analyst, or that they are small compared to the overall inventory and business problems? Or perhaps we're not a representative cross-section?
covert5 - did you tell me if you purchased those calf-hair Juliet looking shoes? I can't remember! If so, did you find them to run small or TTS?
ReplyDeleteanon @ 1226: Thanks for the link to the NYT article. :) It was an interesting read.
ReplyDeleteI agree with the other comments - I haven't seen really any "deep" discounts. And the weekly promotions they've been running don't even cover the cost of shipping once the promotion has been applied. Compared to BananaRepublic or GAP - who really do seem to be actively moving their merchandise, I'd say J.Crew is doing the exact opposite. It's like they don't really want to sell their clothes at all. 20% off a horribly overpriced sweater, then add $14.95 for shipping on top of the "discount?" Pfft.
ReplyDeleteHexicon: The Financial Analysts (FA's) are only concerned with numbers and money. That's their job.
ReplyDeleteI'd love to shop at J. Crew more often but I simply can't justify spending what they are asking for when the Banana Republic just across the way is willing to give me 30% off. The quality might not be the greatest on all their items, but I can pick up what I like from the stacks and racks of clothes that they do have that are made well. By the time I have rung up a couple of hundred at the register, I've long forgotten J. Crew and am gleaming about the deals I just secured.
Also, Banana Republic doesn’t have sales JUST for women or JUST for men. I’m a man, despite what people assume from my screenname. I need a new peacoat and topcoat from J. Crew and I was going to spend close to $1000 a few weeks ago. I tried to order them online but shipping would have costed me an insane amount and taxes were just as insane. I decided to not purchase just as I was going to click on the checkout button. Then they made an announcement that outerwear was on sale….FOR WOMEN. How does that make me feel as a consumer? PISSED. and slighted. Do they think men are not concerned with saving a few dollars in this parched economy?
Like I said in my post above, BR needs to remember that they need to make money. Image can be worked on later, but in retail at this time, it's a fight to just even stay open. Have a sale and lure the customer in. Move that stock OUT. Shareholders aren’t the one’s contributing to the revenue of the company. It’s the consumers.
I agree with Keisha Kornbread. I think that if Jcrew does not offer significant discounts earlier in the Holiday season..customers are going to go to the stores offering better deals.
ReplyDeleteBut I also see the downside risk. It's difficult to justify paying full retail, when you become accustomed to deeper discounts. I too worry about JCrew long term.
I don't know if there will be the demand for their more unique and specialty items as consumers are scaling back (even the wealthy) JMO.
I don't think they're selling aggressively at all. That said, I'm kind of happy about it. I've been spending way too much at JS lately. Like Alexis, I now prefer shopping in stores - I always walk out of the store feeling thrilled with my purchases, as opposed to online shopping where end up now liking half the stuff I get and wish I hadn't plonked down $15 for shipping. So I'm shopping less overall, but I'm happier with the purchases I do make. Good deal.
ReplyDeleteI meant JC, not JS!
ReplyDeleteSince I don't have a store nearby I have done WAY less shopping b/c I can't stand all the problems and higher prices with shopping online!
ReplyDeleteI LOVE JCrew but it is my money and I am spending it elsewhere where I can get free shipping with other store cards each time and great online service.
OT - Keisha - how did you get into investment banking? I am a level II CFA candidate and can hardly even find where there are jobs.
ReplyDeleteJ. Crew definitely needs to get more aggressive with their sales- when other retailers are offering bigger codes (AND free shipping), I'm going to buy from them before J. Crew. It's the simple truth. I love J. Crew, and I love J. Crew's clothes- but in this economy we're beginning to see a lot of retailers get desperate and panicky for our business. J. Crew doesn't seem to have gotten that memo yet.
ReplyDeleteIn other news- I kind of want to buy some J. Crew stock now. Heh heh.
chloe - I agree. J.Crew stock might be the best bargain of all if you are in it for the long haul.
ReplyDeleteI don't think we are done seeing discounts yet and there will be more to come.
I also agree about the cashmere. I have gotten a couple of holes in some sweaters and it makes me wonder if it is worth it and if I shouldn't just get the dream blend instead, of which I am a big fan.
Hey Ladies- Heads up on tights. I love tights with my mini skirts, it makes the men less likely to drool at bare legs....
ReplyDeleteJ.Crew tights are overly expensive. I tried a pair on and thought, really, $27?
Gap is having their Friends/Family, 30% in store. Their tights are $10/each, with 30% off, that's $7 + tax. So, for $27, you can get 4 pairs. I think that's a better deal!
@Wendy -- I agree with you that things are pretty dang discounted. Not just items that have been on the site for months, but new(er) arrivals too.
ReplyDeleteIf they would just remedy the exceptionally high shipping, I'd take better advantage of the sales.
ameilia: I would pass on the Dream sweaters too, they pill alot, mine last only 1 season, I had it dry cleaned it looked like I owned it for over 5 yrs. The Cambridge Cables are nice, and wear well.
ReplyDeleteanonymous @ 4:23 - sorry to hear you are having problems with the dream sweaters. I have not so far. I agree with you on the cambridge cables and I have a few that have held up well and I have thought of buying more.
ReplyDeleteBTW - what does "pill" mean in the sense of the fabric? Maybe you could find another way to clean them.
I actually have a "wool" setting on my washer and dryer and it has teated my J.Crew wool pretty well.
I invested in the good washer and dryer because I had so many bad experiences with cleaners and I find it saves a ton of money in the long run.
Has anyone bought the Dream Stephanie? If so, then what is your experience with it? I think it looks like a good sweater but I need to hold off buying any clothes for the moment!
lol teated should be "treated"
ReplyDeleteoh and actually the "wool" setting is only on the washer and I let my sweaters air dry. It seems to work well.
ReplyDeleteAmelia: I've been with my present firm for a year now. Our status as a privately held, independent firm, owned by associates is a huge strategic advantage. We’ve taken a longer-term view and focused on core strengths and clients’ needs. Our five complementary businesses balance our sources of revenue and broaden our capabilities. And, we’re in excellent financial condition. Following four consecutive years of record revenue and operating income, we expect revenues to be down slightly in 2008, but we will again be very profitable.
ReplyDeleteWe’ve achieved these consistently strong results while operating our business very responsibly, avoiding risky investments, making very judicious use of leverage and maintaining good liquidity. Our leverage is less than 2 to 1, which is low compared to most firms our size and much lower than the major Wall Street firms, some of which were leveraged more than 30 to 1. We are well capitalized with strong reserves and a net capital ratio that is more than 13 times the required level (as of August 31). We have robust lines of credit with a number of highly rated banks. And, our clients are further protected by the broadest excess SIPC coverage available.
While others have gone out of business or are retrenching, we’re profitable, have no plans for layoffs and are strategically expanding our reach and capabilities and adding new talent to best suit clients’ needs. It is a message we’re conveying to clients and others in a variety of ways, including a letter that will be included in quarter-end statements in the coming days.
I do know a lot of other firms are doing horribly now. It's all about how the company works and manages itself. Jobs are harder to get, especially for Junior Bankers. We've just selected our new interns and FA's for the Class of 2009.
Amelia: I purchased Dream Stephanie's in small (my usual size is small or 4), which fit TTS (which is fitted). You can see where a t-shirt sleeve stops through the sweater sleeves (a bump). Also, when I button it up, it puckers between buttons. If you are not wearing something underneath you can see in through the puckers. (On the model, the sweater must be pulled taught so it doesn't pucker for the photo.) The arm length hit perfectly at my wrists. I really like it but want to try it in a medium. It is not worth $88 to me because:
ReplyDelete-I think it will go on sale since it's a pretty basic sweater,
-I don't think I can wear anything other than a cami/tank under it unless I size up but then I may lose the look I was after,
-and finally I want to be able to button it up but not sure I can live with the puckers. I hope this is helpful to you. I do really like the look of it on and unbuttoned.
Thank for the info Keisha. I am speaking with a firm about an FA position right now. They are trying to get me with a Sr. Advisor so I don't have to go it alone, and that's where we are in the process. But, it feels like it is taking forever! I know the market is taking up a lot of their time but I just wish I knew something already! Thanks again for the infp.
ReplyDeletetigs - thanks for the info as well. What does TTS mean? I am kind of new to the blog and haven't figured out all of the abbreviations yet. If I get it, then I would probably buy it on sale and in a medium, especially after your review. I am kind of a cardigan freak. I have plenty but always seem to want and "need" more; like I "need" a plain black and white one for winter and just plain want the spearmint!
ReplyDeleteSorry, infp should be info. I cannot seem to spell today :)
ReplyDeleteAmeilia,
ReplyDeleteTts means "true to size".
anon @ 6:50 - thanks.
ReplyDeleteameilia: pilling of the fabric is little balls of fuzz/wool forming on the fabric as it wears, a good wool comb will take these off but J Crews sweaters seems to do it a little more than other retailers.
ReplyDeletethanks anon @ 7:14- yes, my sweaters definitely do this and I am even usually too lazy to comb them. But, I need to get one and fix it soon!
ReplyDeleteKeisha, I think my remarks weren't very clear--the question I intended to pose was whether the CS problems with online that are so frequently discussed here are 1) widespread enough to significantly affect revenues/profits from online sales, and 2) if so, how is that factored in to the outlook, given that the analysis seems to focus on B&M sales and inventory. In previous statements, IIRC Crew has really downplayed the effects of the "upgrade," but based on the posts the problem seems to be so substantial and continuing that it must be affecting the bottom line.
ReplyDeleteI think Jcrew is trying not to panic and hopes to maintain their customers with their unique styling.
ReplyDeleteWhile I would love JC to offer better discounts, especially online, I stick with them simply because I can't find a replacment. Lots of posters bring up the other retailers deep discounts but even if they are giving clothes away to passersby, I am not going to take it home if it is not cute, not flattering, and looks cheap. Gap is too boring. BR has way too much polyester. AT and Talbots verge on matronly. I can always find shoes and bags at Nordies, shopbop and revolve but I do not have time to sort through racks and racks, page after page of hipster vs ho clothing.
No offense to people who find great styles at these stores! I'm sure there are many gems beneath what I see on the surface. I am just burnt out on the constant search vs going where I know I will find many things I love.
I think JC will ride out this economic mess if they stick with offering what other retails don't
Hexicon,
ReplyDeleteFor the first 6 months of J. Crew's fiscal year (ending August 2, 2008), about 70% of their total revenue came from Store sales (Retail and Factory), while 27% came from Direct sales (Internet and Phone), with the remainder coming from Other. These proportions are pretty much the same as for the same time period the year before.
Yes, anyone analyzing the financials of a company is going to pay attention to something that affects almost a third of the revenue.
The analysts have much greater access to observe what is going on at the B&M stores and thus that is probably why you see more focus on it in writeups like this.
J. Crew did address the systems upgrade issues in their 2Q08 press release:
Operating income in the second quarter of fiscal 2008 includes approximately $3.0 million of unanticipated costs related to our Direct channel systems upgrades.
Millard Drexler, J. Crew's Chairman and CEO stated: "...we are clearly disappointed by the impact that the transition to our new systems had on our business. We view this as a short term and temporary issue in continuing to build our long term success."
I would also caution you to take posts here with a grain of salt. This is a self-selected, biased subset of J. Crew customers, not a representative sample, regardless of what some posters may think. In contrast, I have shopped a fair amount since the upgrade and have not had major problems. Any problem that I have had has been 100% corrected to my satisfaction. But people don't post when things work as expected and even if they did a post to that effect is not going to stand out as much as a horror story. So it is hard to tell just based on posts here how widespread the systems problems are. I would also like to point out that J. Crew cancelled orders and shipped the wrong item plenty of times BEFORE the system changes so not EVERY problem can be attributed to the upgrade. There is always human error.
I also got fantastic deals on 12 items over the last week or so (almost $1000 at full retail, I paid about $250 total, including any shipping and no tax) so I have to disagree with the statement that their promotions are not attractive. That being said, I am a hard core sale shopper, will only buy if a complete bargain and I do not consider myself J. Crew's core customer (although I probably am on other demographic measures.)
I used to buy TONS online. Now, the sales sections are COMPLETELY pathetic. My J Crew card has had no balance on it for the past few months. In the past, I could never pay that damn thing down I was charging so much! I, like a lot of you, cannot see paying for shipping nor do I want to spend the time on the phone with CS begging for my educator's discount. Just ordered some stuff from Martin and Osa (30% off plus free shipping!), and I'm on my way to BR tomorrow for friends & family.
ReplyDeleteIf J Crew continues to make well made basic pieces along with some trendy styles they should be able to ride this out, however if they get away from this and offer less basics most people don't have the extra income to throw away on something that either will not be in style or won't last more than 1 year.
ReplyDeleteI agree with anon 9:05 - This is a small subset of public opinion here on this blog. I haven't had any problems since August with my orders, some orders have been delayed but other than that I have been pretty happy.
I do not agree. I think this blog is a great representaion. There are full priced shoppers, sale shoppers, and bargain hunters. There are students, young professionals, stay at home moms, and middle age professionals. I think this blog is just a great rep. of the public as a whole!
ReplyDeleteanon: This blog is not a true representation just look what people are buying here $425.00 jackets etc,Americians on the whole have stop buying, this is why the retail sales are down but on this blog people keep on buying and buying.
ReplyDeleteIt is definitely not a true representation just by virtue of what it is. First it is going to be biased toward someone who is internet savvy and with time on her hands and less likely to capture the J. Crew shopper who doesn't have the time, the inclination or the ability to spend hours chatting and reading online. Second, I think it is somewhat biased toward a sale or bargain shopper since most/many people originally found the site by searching for coupon codes online after J. Crew shut down some of the big coupon sharing sites. That was one of the reasons Alexis had for setting the site up. Finally, it is going to be biased toward a J. Crew "addict" and not representative of a more casual shopper.
ReplyDeleteWhen I say "biased" it is from the point of view of "is this a normally distributed sample valid for statistical sampling?" It doesn't mean the people posting here are biased, just that they are not equally representative of all types of J. Crew shoppers.