Wednesday, August 24, 2011

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

"Thanks!" to West Coast Crew'ner (in this post) who let us know about the following article from Money (click here to read it in its entirety):
J. Crew scraps duties after CDN price war spreads to Europe
By Stefania Moretti
August 24, 2011

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

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

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

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

Stories like Fraser's made waves as far Europe. ...
"Thanks!" also to GetFresh (in this post) who let us know about the following article from the Globe and Mail (click here to read it in its entirety):
J.Crew backtracks on higher Canadian prices
By Marina Strauss
August 24, 2011

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

...Canada provides fewer economies of scale, resulting in higher costs to distribute products, she has said.
I am so happy to hear that J.Crew is quickly changing their shipping policy! I am also impressed by how they are giving customers a $25 gift card, and refunding the difference to past purchases. Classy J.Crew, nice move. Mickey Drexler also gave a lot of great quotes recognizing their mistake and willing to make it right. Yey!

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


  1. I'm excited to see what changes they make to the pricing tomorrow, and glad that so many of us JCAs played a role in taking them to town on this.

    I'd also be interested to see if customs still collects duty separately of J.Crew - or if J.Crew is really "absorbing" the cost.

    Either way, if this is true, now would be a GREAT time for a coupon code to help eliminate the still-in-place 15% base price increase!

  2. I'm glad this has turned out well even though it seems rather unfair to charge 15% more of the base price.

    It's great that customers' voices are heard and DL is paying attention.

  3. Did everyone see the Globe & Mail article that GetFresh posted at the end of the last thread?

    If it's true that they are refunding the duties that international customers who placed on orders made after August 18, plus issuing $25 e-cards, that would be a very decent thing for them to do.

  4. I am anxious to hear tomorrow what exactly is changing in 24 hrs' time. Fingers crossed that they will really deliver on what they say!

    What a fantastic "group" effort to effect this much influence! I wonder if the JC "powers that be" will take the comments here at JCA, and in the world of social media in general, a bit more seriously now ...

  5. Congratulations, Canadian JCAs! The situation is still not ideal, but at least it shows that when you use your voice, you will be heard and can make a difference. Now let's see what other drama is around the corner -- who needs soap operas when we've got J Crew! ;-)

  6. HUMBLE PIE @Dinster LOL. @Laura I too am afraid that our partial gain with be eroded by still charged duty, just now levied by the CCRA instead of J Crew. @ruffles All for one, one for all. @Alexis, as always, thanks for all the posts! And finally, on behalf of Tabitha @Bourbon&Pearls I to despise that trite and repeated "thank you for reaching out" from DL. And I hope our UK compatriots soon get some equivalent acknowledgement and the return of a sales section (we Canucks have to stick together with the former Empire Central.) Oh, and @WellFedFred have you called off the flock yet? Or waiting to see like many?

  7. @GetFresh love the shoutout to the British Empire. Commonwealth folks gotta stick together! Hope they get reversals as well.

  8. honk, honk, GetFresh, waiting for word from Abroad (that's what us Yanks call England), and for more serious math from you hardy voyageurs!

  9. Good job all around. A lot of retailers would have either said nothing or said 'stuff it, this is the world we live in now.' So good on the Crew for fessing up to a screwup and for extending the olive branch to our Northern friends.

    My husband was in Canada on busuiness for the past few days and just got home tonight, and he said it was ALLLLL over the news in Montreal! He was very amused to learn most of the very vocal critics hail from this here mothership. :D

    I also agree with ruffles that this is very demonstrative of the power of social media, etc.

  10. I was at the Toronto store tonight, and Austin, the awesome store manager, told me "between us" LOL, to check online tomorrow for an announcement -- I immediately assumed he was talking about the new pricing. So I am SO happy to see this is really and truly the case!

    Good for you, Mickey and the brass at J.Crew. While I'm not happy about the higher Canadian prices in general, it's par for the course up here. At least it's one battle we've won tonight.

  11. OT, but I meant to add this to my post --

    The Toronto store will NOT be accepting returns on items ordered through the US website. I spoke to Awesome Austin (store manager) this evening and he explained that the systems are different, so for now at least they're not able to process US online returns at the store.

  12. Well done JCAs! In this case the squeaky wheel does indeed get the grease- in this case a $25 giftcard :)

  13. Fantastic news! And now I can finally order those pia calf hair pumps I've been eye balling. ;)

  14. I was looking at the Banana Republic Camille Jacket I blogged about yesterday and they are charging 19% more in Canada (base price), so a 15% increase in base prices at J. Crew won't surprise me.

  15. Sounds like things are turning the right way. I think this is total karma. Totally. DL and whoever else at J Crew has tried to manipulate and control their image in the media for quite some time now. What was that recent comment we read where he referenced blogs, but *still* wouldn't totally get on board. Whether it's an innocent error or poor planning, they're getting what they deserve.

  16. “We are looking at what others do … The fact is, prices are higher in Canada than they are in America.”

    Which "others" have they been looking at when setting the UK prices?
    Even those who sell internationally with the local currency option only show an increase of a few dollars at the most, while the prices are exactly the same when selling in dollars.
    A more noticeable increase is applied by the companies shipping from Europe, such as Anthro, Gap, etc. but we don't have to pay any Customs because that's has already been paid by them.

  17. Th UK website now has 'A duty-free shopping experience' on the welcome window for the site. Still no sale section. They don't seem to have adjusted the prices to reflect reasonable exchange rates - the double serge pencil skirt is priced at GBP 110.47, which is about USD $180. I did a mock check out and the final price (with GBP 9.95 for shipping and GBP 18.57 in tax) is GBP 138.99 or USD $227. This is 76% more than it would cost to ship the skirt to my father in MA.

    It might be too early in the day for their 'changes' to have taken effect, but if this is their idea of 'fixing' the problem - no thanks.

  18. CH, these little tricks are really annoying.
    No transparency, a really lame defense of their price policies, and a clear message to the UK (and presumably the rest the EU): we want to get as much money as we can out of you, so we son't even give you a sale section.
    It's very disappointing.

  19. Great news! I'm glad to see that the whole situation is finally being changed for the better. :)

  20. No Change this am on the Canadian site either.

  21. It may be a good idea to add comments here:

    and here

  22. Actually things have changed significantly this morning....

    The tax added is now ( for me ) 13% with no additional duties.

    This brings the price of a $ 200.00 item I ordered before the update to within $ 2.00 of the price I paid previously :)

    There is a small area to click on the homepage marked " Canada News -updated shopping experience".
    It takes you to the shipping information page where it states explicitly that no further duty will be added at delivery.

    I know some Canadian JCA's are still not happy that the base price is higher than the US but I am pleased to be paying what I was before.
    I think that is fair, and fairness is what I was looking for.
    The whole bigger picture of overall higher Canadian vs US pricing won't likely change in my lifetime.

    Thanks J. Crew for listening...
    Thanks Alexis for the forum....
    Thanks to all JCA's who wrote, called, emailed and talked to the media....

    And good luck our european JCA's with their fight for fairness as well.

  23. Canadian site now says (on pop-up):

    Exciting news for our friends in Canada:
    -New and improved shopping experience: duty free*
    -Ground shipping at a flat rate of USD 9.95
    -Guaranteed landing costs (no additional charges at delivery)*
    -Please note, all prices in USD
    *Ground shipping only

    The "International Orders" page ( also seems to contain some updated information, including:

    "What will the duties and taxes on my order be?

    No additional duties will be applied at checkout or upon delivery. For purchases made in Canada, we collect GST and PST where applicable."

    There also seems to be a section on Duty Refund. Not sure if this is only applicable to those purchases Aug 18-Present.

  24. Yes I've just done a mock checkout and they are charging HST only on top of the newer pricing.
    They acted quickly and I am very happy.
    I am wondering how they will be submitting the duty but they must have that figured out!
    Good job JCrew I love ya all over again.

  25. I doubled checked the Canadian shopping portal on J. Crew's website this morning and it looks like the additional tax being charged has been reduced, but not entirely eliminated. In Ontario, the provincial tax is 13% HST. I picked one item to check - the Commodore Jacket, priced for Canadians at $162.00 USD, and the system calculated an additional tax of $14.74, which is 13%. So this does appear to match the pricing system of the Yorkdale store, since the prices in store about 15% higher than U.S. prices and then 13% HST has to be tacked on top of that. I'd be interested to see what taxes people in other provinces see when they go through a mock checkout.

  26. The problem is the base price has been jacked up with artifical duty, they are still charging duty on US items which are duty free!!


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