Friday, October 30, 2009

J.Crew's Gotta Lock That Down {talking about Jenna Lyons of course!}

"Thanks!" to many of you, including Raina, Liz, J.Crew Guy In Canada, Nancy, Milkita (in this post), as well as RatsOnParade (in this post), who shared the following article from the Wall Street Journal (click here).
J.Crew Rewards Designer
By Elizabeth Holmes
October 29, 2009

Jenna Lyons, creative director of J.Crew Group Inc., received a special bonus of $1 million this week, according to a filing made with the Securities and Exchange Commission.

Ms. Lyons's design aesthetic has been credited for the recent success of the New York clothing company. Stronger-than-expected sales in October prompted J.Crew last week to nearly double its outlook for fiscal third-quarter earnings to between 54 and 59 cents a share, up from 30 to 33 cents a share. J.Crew's casual styles-embellished T-shirts, frilly blouses and chunky jewelry-have been widely copied in the mall apparel space.

The bonus is intended to keep Ms. Lyons at J.Crew for the next several years. The terms specify that she must repay the bonus in full if she leaves within two years or repay half of it if she leaves after that but within four years. The company declined to comment.

The retail industry has been hit by a sharp contraction in consumer spending. J.Crew, like its competitors, has spent the last year cutting costs, including reducing inventory and slowing store openings. In February, it eliminated 95 positions in its corporate office and distribution centers. At that time, it also suspended 401(k) contributions and eliminated merit-based wage increases for all employees.

Neither Ms. Lyons nor any of the company's other four top executives received bonuses last year. Ms. Lyons received a compensation package, including stock awards and option awards, of $1.9 million last year, according to an April proxy filing.

Ms. Lyons joined the company in 1990 as an assistant designer, following an internship with Donna Karan. She became its creative director in December 2007 and has helped steer the brand to new levels of popularity. It has become a favorite with the White House, including specially designed clothes for first daughters Malia and Sasha Obama for their father's inauguration. J.Crew is also widely worn by celebrities, including Katherine Heigl.

Ms. Lyons has become something of a spokeswoman for the brand and is regularly featured in its marketing. "Jenna's Picks," or items she recommends, are a regular feature on the J.Crew Web site. Rival AnnTaylor Stores Corp. recently added a similar feature, dubbed "Lisa Loves," for its head designer, Lisa Axelson, to its Web site.

Ms. Lyons was inducted into the Council of Fashion Designers of America earlier this month, alongside well-known designers from the luxury space including Alexander Wang and Jason Wu.
I have to admit, Jenna Lyons has done an amazing job over the years. It makes sense that J.Crew would want to keep her. Although I am curious what the future holds for J.Crew. Jenna Lyons has been transforming the company over the years– from updating great basics to introducing fashion-forward pieces. It will be interesting to see how they maintain the balance going forward. {Especially since the Spring 2010 collection contained more fashion forward pieces than updated basics (refer to this post).}

This article also mentions retail competitor Ann Taylor copying certain marketing elements. I have to say, as of lately I am loving what I am seeing from Ann Taylor and Ann Taylor Loft! It reminds me of the J.Crew a few years ago in terms of styling (and that is a compliment!)

Thoughts on the article? Disagree or agree with J.Crew's decision to retain Ms. Lyon's services?

44 comments:

  1. I think Jenna absolutely deserves it--I don't love all her "picks" but overall she's very talented, imo--but I also hope the company uses some of its "unexpected earnings" to start contributing again to 401Ks and to hire some new talent to keep things fresh.

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  2. One of the more reasonable bonus contracts I've seen of late, with contingencies built in to keep the talent at home. Jenna's Eye is why I'm a total JCrew fan {and why I'm enjoying my "look" these days, more than ever].

    {As an aside, one never actually gets $1 million; just as in winning the lottery, the government takes a sizeable chunk.]

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  3. It's nice to see successful women earning recognition and bonuses, good for her. I think Jenna has done an excellent job transforming the brand and attracting a wide variety of customers rather than mainly just the preppy crowd, who can still find plenty of prep at J.Crew.

    Some things are definitely getting tired though and the spring 2010 preview has a few pieces rehashed from the 80's, which were *not* the most flattering fashion-wise. I am a big lover of classic pieces and J.Crew always has some fabulous ones as well as pretty, feminine pieces so as long as that continues I'll be a customer.

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  4. Congrats to Jenna. She is incredibly talented and while I don't always agree with her picks I very much respect her talent.

    However, boo on Wall St for supporting profits over jobs. JCrew should not be rewarded for contracting their staff unless those positions were fluff, and I doubt they were.

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  5. Rock on Jenna! you deserve it. I love hearing about women in Business working hard and getting the kudos they deserve. This is welcome news as I am tired of hearing about overpaid corporate CEO's whose companies are doing poorly- ie Motorola's CEO is paid $104M and the company stock is under water!

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  6. i think jenna deserves it.
    she is very talented and has a good eye for style.
    i like that jcrew is not only classic, but also fashion forward.

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  7. $33 a share! I knew I should have bought the stock at $7! I find that there are a few good pieces every season (mostly knits and blouses), but most of their stuff is poorly made (they're particularly bad at tailored items like skirts, jackets and pants) and seems to be a rehash of the same style. I do wish they'd update the style and add some trendy items - and especially leave off the bows and ruffles and dots on just about everything.

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  8. I have to say, Jenna's styling is one of the reasons that turned me toward J.Crew in the first place so I think this is definitely a well-deserved bonus. Imagine that, someone is actually getting paid for doing a good job? One of the main reasons that people were outraged about the insanely high bonuses executives were getting was because their contracts ENTITLED them to bonuses even when the company was going under due to THEIR decisions! No one wants to hear about executives getting multi-million dollar bonuses when their company is getting tarp money.

    Sorry about the soapbox but kudos to Jenna!

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  9. With all these fs codes, it makes me wonder if J Crew's business is all that good?

    I left my comment about Jenna's bonus in the other thread, I wish JC spent the money making much needed improvements in their quality control and in their shipping warehouse. If you do not have quality than who cares about design, unless you have a lot of money to burn.

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  10. The good - Jenna has been as asset to JCrew. I don't doubt that at all and I give her full credit for much of the success JCrew has had.
    The bad - JCrew is starting to have fashion burnout. Their new catalog is just a big fat mess and the quality has gone down while prices went up.
    The bad - we're in a recession! And someone got a million dollar bonus? What about all the people that are looking for work? And all the people working hard behind the scenes at JCrew? I think JCrew's strategies are out of touch - sales maybe up, but they don't make me feel like a valued customer either - not much perks to shop there lately.

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  11. My husband thinks Jenna's bonus is underpaid for her talent and what she has done for JC. After tax it's not much... I've been wearing JC before it has become very trendy and my only hope is they make better quality clothing and keep the prices affordable to some level. I'm sick of having to return shirts, cardigans, etc due to holes and defects.

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  12. Congrats to Jenna. I hope they are backfilling her place on the design team because I think there's a possibility she will be bought out. And I wouldn't think that's a bad thing if they continue going "high art". I think November's catalog may be their worst in years. I don't say that lightly. Maybe she's getting bored and maybe her best J. Crew days are behind her. I hate how that sounds but no pants for Spring and their styling for November is making me wonder if they've jumped the shark. I really hope I'm wrong but I can't say her current work is the most impressed I've been over the past five or six years. It's weird how many get recognized on the downside of their curve.

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  14. If the company is doing well during these times, the bonus is certainly well deserved. I personally love her style, even if the styling in the catalog is sometimes too much. I think that change is the key and they have now reached the point where they are starting to do too much of what she's been praised for in the first place.

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  15. jcmama,
    With you on the defective/quality issues. I just got a perfect shirt. I compared it to a similar shirt from a couple of years ago. What a difference. Even the inside was finished much nicer and the quality of fabric was superior. I am returning the new one after that comparison! I am glad I keep my clothes!

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  16. Which Perfect shirt is the one that is so poorly made? I checked the three Perfect shirts that I bought this year and they are all finished with French seams, very nicely done. Would like to know which one is a dud in case it pops back.

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  17. Overall, I'd say Jenna definitely deserves the bonus (aside, of course, from the shorts and anklet socks with pumps currrently being pushed). J. Crew's styling is much better than many other stores. Now, if they could just up the quality a bit.

    I love what Ann Taylor is currently doing, but it's obviously copying J. Crew. I'd love to see AT doing some innovating on its own.

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  18. I think Jenna has done a lot for J.Crew, and in the business sense, she absolutely deserves the bonus. I'm actually surprised it's only 1 million...

    On the other side, we are smack in the middle of a recession and one has to question whether bonuses are appropriate at all.

    I think that it was smart for J.Crew to do this to retain her as part of their company...I have to admit, JC has got some cute stuff!

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  19. I was very disappointed in the quality of my floral perfect shirt. My first impression out of the box was very poor and it went down hill from there. The seams are poorly sewn, there were loose threads inside and out, and the fabric fells cheap. My paisley one from earlier in the fall (the gold/purple/gray store only pattern) is great, but this one was really bad. Also, my blue stripe and white Frances shirts are wonderful.

    As far as Jena's comp goes, I have mixed feelings. Her overall compensation package is a nice chunk of change even considering the taxes. Overall, she probably deserves it, but I am starting to get disenchanted with the brand as a whole. I think their designs are just more of the same and the quality is terrible lately.

    As far as AT goes, they have really impressed me lately. They have had some amazing pieces that have actually fit much better and more consistently than JC and have blown me away with their attention to detail and quality.

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  20. Wow! $1M bonus?! The repayment if she leaves terms are pretty scandalous, it's like they're desperate to keep her! I mean, she does a great job (obviously) but I loved J.Crew prior to 2007 and will probably always shop there no matter whose "picks" are listed in the catalog...

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  21. Kind of OT: did anybody catch the recent HBO documentary "Schmatta: Rags to Riches to Rags"? Truly fascinating - it's about the vanishing garment industry in America, specifically in Midtown Manhattan. What I found interesting is how these public companies (like JC, since 2007) are expected to (always)grow at a certain rate, leading them to cut costs any way they can. This may explain why some of us JCA's feel like there's a marked difference between pre-and-post 2007 clothes.

    I've liked Jenna's influence in the past but over the last year have been starting to feel like I'm seeing the same pieces over and over, and the different looking ones that I want to purchase are of shoddy quality. My Maya cardigan (which IMO is a gorgeous design) looked like a rag after one wearing (pills *and* holes!) and had to go back. I understand that JC has to grow for the benefit of its shareholders, but can that be done without sacrficing quality and retaining some of the design asthetic that made them great in the first place?

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  22. I appreciate Jenna's style aesthetic, even though it's feeling overdone now and Spring 2010 seems like an even further exaggeration. That said, it feels overdone to me personally, but I am ridiculously immersed in this brand on a daily basis. Maybe it still feels a little fresher and unique in the broader retail world?

    OT if you are cruising the sale section trying to find something to use JCREWFAN for, I highly recommend the Ruffle-front vine-print Perfect Shirt for 19.99 if they have your size. Looks kind of blah online, but lovely silk blend and tailoring. I wore mine in Blossom yesterday and got a thousand compliments. Just a thought.

    Happy Halloween, all!

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  23. I wonder if she was actually planning to leave J.Crew?

    As far as other companies *copying* J.Crew...I really don't think that's the case. J.Crew and all other mall retailers *copy* what they see on the runway which allows those of us who can't afford the true designer pieces to have something similar.

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  24. I returned my ruffle front vine perfect shirt. Fit was nice but fabric is paper thin. Not high quality IMO even for $19.99. I got out my beautiful silk/cotton print JC shirt from a few years ago and felt so much better in the "thicker" fabric.

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  25. Summer, yes, the silk-cotton is delicate, I wore a cami underneath.

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  26. Great for Jenna and J. Crew, they didn't have to bring in an established well known designer to turn the company around. That is going on a lot lately in the fashion industry : Patrick Robinson at Gap, Isaac Mizrahi at Liz Claiborne. That's definitely great for shareholders.
    On another note I keep getting J.Crew deja vu at Ann Taylor Loft and Ann Taylor. Some of the similarities are getting erie. When I saw the "Lisa Loves" email form Ann Taylor I was like they are un-ashamedly copying J.Crew.

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  27. This is not the normal time of year for a bonuses to be offered. My guess is that Jenna was considering a position at another company and JC didn't want to lose her.

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  28. I wonder how the JC employees below Jenna feel about her $1M bonus, having to deal with the suspension of the 401K and merit-based wage increases. I can just imagine the "water cooler talk" in their offices!

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  29. Prob. attributable to Jenna, lovin the Jcrack.

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  30. I don't know if JCrack success attributable to Jenna, but for sure Michele O. has catapulted JC to prominence.

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  31. Wow, she's worked there for 17 years??? Well, good for her I say, although I hope some new designs will be imminent!

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  33. kitsmommy: You and I could have some fun shopping together, hee hee. I'm so with you on AT. Ever since the new designer, I've been loving their pieces. I've bought armloads from them since September, and precisely two pieces from J.Crew in that same span. J.Crew used to make me swoon, but now it's just shrug and turn the page. They may be trying to condition their shoppers to pay full price by reducing inventory, but their reduction in quality has conditioned me to not buy their cashmere or dream sweaters, nor hardly any of their tees.

    I practically live in pencil skirts, and I'm finding them at AT these days, plus darling jackets, and unlike at J.Crew, AT offers far better selection in petites.

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  34. OK, so I just checked out AT for the first time in several years, and: yow! I have a shopping bag full of must-haves. Anyone have any incredible coupon codes?

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  35. hee hee hee, 2 things are making me giggle about this post - 'lock that down', and 'jumping the shark'. hee hee. Too funny.

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  36. Rae: Go to dealigg.com .... there are a couple of codes listed for 25% off and 30% off you might be interested in! HTH!

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  37. Thanks, Lindsey! (Now those are *coupons.*)

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  38. U R Welcome! LOVE good coupons like that! :)

    Anyone else having an issue placing an order online w/ JC right now? It keeps telling me there is a problem with my payment... never had this before... thanks!

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  39. Even though I *totally* think J.Crew's styles have been regurgitated beyond repair (ruffles, embellishments and now....gah....camouflage), J.Crew's recent success certainly seems as though it can be tracked back to the vision of Jenna Lyons. If I remember correctly the "Jenna's Picks" just started in the last year about the time the Obamas were seen everywhere in J.Crew and the stock prices started to skyrocket. And yeah, $1 million over the course of the next few years compared to the profits they've brought in as of late doesn't really seem like much (I'd be interested to know what her yearly NYC salary + bonus is, without the inclusion of the $1 million). It's possible she was being courted by some other retailers, hoping she could flex her ruffled-military-jacket powers to save them too -- regardless, way to go to Jenna for being such a success (and an integral part of J.Crew's image -- no small task!)

    I really really REALLY hope they are able to breathe some new life into the tired old rehashed designs we've been seeing as of late. And yes, I know they're pushing their costume jewelery as "The Next Big Thing," but man, I wish they'd go back to perfecting their basics and upping the quality. There's only just so much room a person has in their closet for trends...especially when they're costly trendy pieces. Enough is enough!

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  40. RatsOnParade: I could not agree with you more.

    Just read the piece in the LA paper, the writer adequately described the look "deeply schizophrenic look ". How many people can pull that off irl?

    C'mon JC gives us something different!

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  41. I, too, agree with what Rats said. I've been a casual J.Crew shopper since the early 90s, but around 2005 I became more dedicated, and around 2007 I really started drinking the Crewlade. I think that Mickey's arrival--and the decline of Nordstrom's Individualist department--had a lot to do with my uptick, and Jenna's rise coincided with my full-fledged obsession. Given that they have invested a lot of time and money turning her into a visible "face" of the brand it's no wonder that they'd want to make sure she didn't go elsehwere. I might groan at some of the things that come out of her mouth ("blondes shouldn't wear pink"??) but money talks, and mine, to the extent that I have it, is going to J.Crew.

    That said, I often think there is an "emperor's new clothes" effect here. Everyone at JC must think she's so fabulous that no one will express any doubt. The spring 2010 collection really dismayed me--how many more flimsy pastel chiffon ruffles can we take? Or, her "forever pieces"? Copper taffeta shorts? At best, those were "right now" pieces.

    Notwithstanding JC's more fashion-forward efforts, I still think that most JC customers are looking for quality classics with a twist. Many on this blog are concerned that the quality is no longer here, and now we're losing the classic too. Does Jenna know that real JC customers are not vapid, knock-kneed adolescent fashionistas but real women who have to, say, go to work dressed like grown-ups, go outside and stay warm in the winter, and oh, *wear pants*?

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  42. Oh Hexicon, pants are so last season! Thighs will be our focus for spring - be sure to wax!

    Affectionately,
    Jenna

    ;)

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  43. If J.Crew stock is doing so well, it seems like good business to compensate your creative talent. Kudos to Jenna.
    Like many of the JCA's already mentioned, I'm not optimistic about the quality of J.Crew improving any time soon. If they are attracting new buyers who don't know what they are missing as far as quality goes I don't see any motivation on J.Crew's part to turn back the clock on quality!
    I took my heavy sweaters out from being buried deep in my closet yesterday and wore my cozy J. Crew cashmere shrunken cardigan from 2004. No pills and it looks less worn than my cashmere from spring "09!

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