Monday, February 14, 2011

J.Crew Freshens Up the Classics

There is a great article over at Wall Street Journal/ MarketWatch (click here or here to read in its entirety) that interviews J.Crew's Jenna Lyons.
Giving Classics a Fresh Look at J.Crew
By Elizabeth Holmes
February 14, 2011

Wall Street is closely watching J.Crew's CEO Millard "Mickey" Drexler as he prepares to take the company private. But attendees at New York Fashion Week have their eye on Jenna Lyons, the president, executive creative director and face of the preppy apparel brand.

During the recession, Ms. Lyons became the envy of many retailers with her designs that attracted two highly sought after groups of consumers: the older luxury customer seeking lower-cost alternatives and the 20-something aspirational shopper looking to trade up. Sales rose to nearly $1.6 billion in 2009, an 11% increase over the year before. Profits more than doubled.

But as consumer sentiment strengthens and spending returns, the brand has shown signs of weakness. Mr. Drexler reported "softness" in the women's business in November as the product, such as embellished T-shirts and ruffled tops, grew stale.

Ms. Lyons, 42 years old, joined J.Crew in 1990 as an assistant designer and rose to creative director in 2007. Her big break came more than a year later, when now-First Lady Michelle Obama wore a J.Crew yellow pencil skirt and cardigan during an appearance on "The Tonight Show," pushing the brand into the spotlight.

In late 2009, J.Crew gave Ms. Lyons a $1 million bonus that she must pay back in full if she leaves the company before fall 2011 or by half if she leaves the company two years after that. Last July, the company made her president, in addition to her creative duties.

In an interview, Ms. Lyons talks about making khakis look exciting and what she watches for at New York Fashion Week.

WSJ: How does the rising cost of raw materials, such as cotton, affect your design?
Ms. Lyons: When we're selecting fabrics, we are conscious of what we're doing and we think about the overall line. We've actually gone out and secured cotton. We've taken more strategic positions with some of our vendors.

One of the things that Mickey really instilled in us was to design it, create it and then look at it and say, "How much would you pay for that? What is that worth?" Instead of saying, "I want you to design a $48 T-shirt," which is not very inspiring.

You might question, why is a J.Crew shoe $225? Well, we want you to understand why it's $225. For the quality and the level of detail and materials we put in it, it is actually an incredible price because we don't have a double markup structure the way another department store might. We're not just sort of going to the lowest common denominator and saying, "Commodity prices are going up. We are going to make everything cheaper."

WSJ: What about the collection resulted in softer sales last fall?
Ms. Lyons: [The customer] was sick of ruffles and so were we. There are always cycles where things sort of ebb and flow and all of a sudden that thing that you loved you now hate and that thing that you hated you now love. You've got to just keep moving forward.

WSJ: How do you keep basic items, such as T-shirts and jeans, exciting?
Ms. Lyons: One of the things that I think is unique about what we do is the way that we present the clothes. Sometimes it's a little kooky—sometimes it's too kooky—but it's this idea that you can make it your own. Wearing that stripe with that stripe with that check with that belt. We're not saying you have to walk down the street like that, but what we are saying is you can have fun with it.

How do you take that thing that is a staple in somebody's wardrobe and help them reinvent it? For instance, we have a "Jackie" cardigan. It's a twin set, it's classic. When we get to the catalog, how do you make that thing look new? You show it with shorts, maybe you show it with a bathing suit, maybe you show it with high-waisted skirt, maybe you show it with a skinny pant.

At a very base level, there is a lot of effort that goes into quarterly earnings calls. It will be nice to not have that quarterly distraction. I don't think it's going to change much for us, other than that.

WSJ: How do you design for both trade-down luxury customers and younger aspirational shoppers?
Ms. Lyons: That's actually always been the goal, to provide clothing that anyone can wear. This is a J.Crew double-faced cashmere sweatshirt [points to what she is wearing.] I got one for my mother. My mother does not wear it like I do, with silk sweatpants and spiky heels. There's a girl in the office who wears it upstairs. She's so classic, in crisp white shirt, perfect little trousers and loafers.

We strive to provide a high-low in the core things that we do, like a chino. What's going to make that chino feel really luxe? Do we throw a little sequin jacket over it and a little tank top? It's really about how we make the line feel complete and rich as opposed to sort of thinking about a specific person.

WSJ: Last year, you were inducted into the Council of Fashion Designers of America, led by fashion heavyweights Diane von Furstenberg and Vogue Editor Anna Wintour. What has that been like?
Ms. Lyons: Interestingly enough, she [Ms. Wintour] and Diane have been incredibly welcoming. Shocking, not because of anything other than the image that's out there—I just had no idea of what to expect. I mean, it's Diane von Furstenberg, she's a legend. She's been painted by Andy Warhol and hung out in Studio 54 and I mean has the best legs I've ever seen. And Anna Wintour? It's like—oh my god.

WSJ: You've been spotted this season at shows by Jason Wu, Prabal Gurung and Derek Lam. What do you look for at New York Fashion Week?
Ms. Lyons: By going to shows, I get to step out of my daily job and fantasize about fashion; the hair, the culture, the makeup, the music, the styling and the energy. That in itself is inspirational.

In another life, I would love to be a magazine editor, because when the music comes on and the lights go up and the models come down the runway, I'm like: Ohhh! I love it.
I really enjoyed this article/ interview. Lot's of interesting tidbits about quality in products and stagnant sales. I also thought that some of the quotes related to the topics discussed frequently on this blog. In particular: (1) The quote about ruffles was funny as it is often discussed here. I do love me some ruffles, but you can only put ruffles on so many things before you ruffle-out. ;) (2) The quote about presenting the clothes. Many of us wonder about the occasional "too kooky" looks and it's great that they are aware of it.

What are your thoughts on the article? Did you enjoy the interview? Any parts you found particularly interesting?

14 comments:

  1. Thanks Alexis for sharing the article with us. ITA about the comments on ruffles and kooky stylings. At least they're aware of the issues. Someone mentioned that design/manufacturing cycles traditionally run on a year to 2 ahead. So we may be stuck with ruffles/sequins for a while longer, but I'm REALLY hopeful that we're on track to seeing some cleaner/newer concepts from JC, and the Spring items so far are pointing the right way, if that makes any sense. BTW, was in F21 on the weekend and the place was RAMPANT with stripes. I hope that's not going to saturate the market this Spring, cos I like it, but I don't wanna see it 24/7 on everyone.

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  2. Mr. Drexler reported "softness" in the women's business in November as the product, such as embellished T-shirts and ruffled tops, grew stale.

    No kidding. The same stuff @ a higher price. Don't pull the unraveling tees over my eyes twice!

    $198 sequin tees, $125 studio tees...come on. They seem to be ebbing and flowing from the same bathtub.

    It's going to be interesting to see what goes down in the next year or so. Hopefully, they get it right, because upfront bonuses are so painfully hard to give back.

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  3. What a fun read! Nice to hear some honest appraisals of Operation Ruffles. :) This makes me excited for maybe the next rollout. Still not seeing anything in the current one that's doing anything for me.

    CC, I think spring is going to be all about stripes and maritime / nautical stuff. I'm seeing it evvvvvverywhere right now!

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  4. One of the things that Mickey really instilled in us was to design it, create it and then look at it and say, "How much would you pay for that? What is that worth?" Instead of saying, "I want you to design a $48 T-shirt," which is not very inspiring.

    This is somewhat of a lie considering the New Yorker article the revealed how obsessed Drexel is with designers who find a way to sell $800 umbrellas. Even if it's a not a lie, it's proof a lot of higher ups are out of touch with the budgets of most of their consumers, especially when it comes to shelling out for perceived value and actual value.

    I love, love J. Crew but all this PR is making me worried that they don't love me back. Instead of focusing on quality (and fair pricing), they're too busy talking about how the merchandise is great quality when that's simply not the case across the board anymore.

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  5. I enjoyed this article, thanks for sharing it Alexis. I especially like the part about making a classic look fresh because I am all about the classics and don't find them boring at all, especially when worn in different ways or with more current pieces.

    I'm 25 and fit into the group of people who are looking to "trade up" to better quality and, I might add, season-spanning pieces to build my wardrobe. J.Crew does the classics quite well for the price IMO. Even with some recent shifts to less expensive construction like pencil skirt waistbands that are made of grosgrain ribbon and no longer fully set in with contrasting lining, they are still great pieces and workhorses of my wardrobe.

    To me there is no question that Jenna has great business acumen along with her designer capabilities. Securing the raw materials to hedge against price increases sounds like good strategy to me and great that she had a ready answer to the question, she does her homework. Commenting that they know sometimes the styling is kooky but that it's not necessarily intended to be worn that way, well, we have read posts saying that on this blog every time a lookbook comes out so I can't help but think that they saw it here too. ;^) It's nice to read that they do respond to customer comments, even if it does take time to readjust.

    I can't help but like Jenna Lyons and what she brings to market. Sure, it's not all perfect but nothing is and there is such an amazing following of devoted fans of the brand that it is just incredible. I don't buy most of my wardrobe at J.Crew but I am enamored enough with some of the offerings to spend full price quite often and I am totally hooked on the J.Crew buzz here and on other blogs.

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  6. I know this will sound harsh, but I found the article unintentionally hilarious.

    You might question, why is a J.Crew shoe $225? Well, we want you to understand why it's $225. For the quality and the level of detail and materials we put in it, it is actually an incredible price because we don't have a double markup structure the way another department store might. We're not just sort of going to the lowest common denominator and saying, "Commodity prices are going up. We are going to make everything cheaper."

    JL, you have not convinced me those shoes are worth $225. Just saying there is a level of detail and it's an "incredible price" does not make it so.

    I am getting bored with all this PR. I'm not really sure who this is supposed to appeal to. If I was a casual observer, nothing said would make me want to check out the brand. Looking at it from an investment view (it is in WSJ after all), she wouldn't be making me feel that great about the company. The quote that they've "secured cotton" is really vague - are we talking about cotton futures here? As a customer I also know next fall, when the fabric crisis is supposed to really be felt, JC will be upping their prices along with everyone else, so that secured cotton really doesn't mean much to me. As for ruffle overload, the "ebb and flow" fickle customer excuse might work as a fashion explanation, but I can't imagine their marketing and R&D people can use that an an excuse (even if it might be partially true).

    While I am over all this PR, I do like to be reminded that JL has been with the company for 20 years and started out as an assistant designer. I find that story a lot more interesting and inspiring than articles that don't really tell me much about anything.

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  7. Oops, forgive my double post...

    One thing I think that J. Crew does a great job of is updating the classics and imagining them in a new way. Jenna, in particular, has really revolutionized the way they do that, and I do enjoy hearing about how she and her mother can wear the same items of clothing in different ways. I hope they continue that focus in the future.

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  8. Lol, honestly I think the company read all of our comments and saw how much we were over the ruffles and over the top designs!

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  9. I enjoyed this article alot. Jenna being Jenna, talking ruffles and such.

    I have also spent alot of time on voguemagazine.com looking at pictures of the runway shows. So many have a "crew-like" look to them. It's very easy to pull together a similar look from my own "J Crew Collection".

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  10. Good point, nomoneyfun, when you said, 'I love, love J. Crew but all this PR is making me worried that they don't love me back.'

    Ain't that the truth! JC's main problem isn't ruffle t-shirts or cardi overload creating soft business. It's that they're product centric and not customer centric. I watched part of The Queen last nite on TLC. I caught the part where they said monarchies in many other countries no longer exist. The reason the British Monarchy has survived is because they've adapted with the times. Good point. I don't see J Crew doing that from my perspective and I'm very curious to see how the story of the company unfolds over the next couple of years. A card from Mickey in my J Crew box is not a connection. I'm always hoping they will get it right, of course.

    In the meantime, I liked this article, addressing the styling and what not, among other things.

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  11. Pondering the mysterious silence re: sequins.

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  12. WFF, they won't give up on sequins yet, haha. Too much of the spring line (and I suspect some of summer) is comprised of them.

    Besides, I don't mind a good sequin every now and then. :D

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  13. An interesting article. I also lol regarding JL's comment on ruffles and tees.

    With all this PR, it seems to me that JC is more focused on selling their "obsessed, must have, 'it' items" that are over priced (than what they really are).

    Please bring back the quality!

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  14. I do think the shoes are worth $200+. The quality of the leather and workmanship, the beautiful soft colors (which are not so easy to pull off successfully), and the added details like piping all contribute to a higher price. Can I afford to spend $200 on shoes? I can, but I won't unless it's for a special event, so I wait for them to go on sale. I do love my anchor grey Gibson sandals and my warm taupe Lindys arrived today but I haven't opened the box yet. The Gibson sandals are especially pretty with the contrast piping, that's a high quality touch and it was done very nicely.

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