J.Crew Invests $125M CapEx in Supply Chain and IT EnhancementsI know this article is a bit on the boring side, but there are a lot of tidbits to be read. First, it is very impressive how much their sales have increased. Great job J.Crew! Second, I am all for upgrading IT services that will enhance the customer's shopping experience.
By Adam Blair
June 3, 2012
J.Crew will invest its $125-$135 million in 2012 CapEx on supply chain infrastructure, including an expanded direct sales distribution center, and IT enhancements that include enabling international shipping for online sales. Both international and direct sales are experiencing rapid growth at J.Crew: direct sales increased 19% during the first quarter of 2012 compared to the same period the previous year. Total revenues for J.Crew increased 23%, reaching $503.5 million.
J.Crew executives see long-term benefits in improving its international e-commerce capabilities. "We're now shipping to 106 countries, and obviously, that is giving us a lot of information in terms of where the demand is coming from," said CFO James Scully during a recent conference call discussing J.Crew's Q1 financial results. "Previously this was anecdotal information, and we're turning it into good analytical information."
The retailer also revealed that it is able to share inventory between its brick-and-mortar and direct channels. "We do use sort of a seamless inventory strategy, where we do share inventory," said EVP of retail and factory Libby Wadle. "But we do buy a separate inventory pool for our direct business and our retail business and then manage in-between as the business demands," she added.
In addition to its supply chain and IT investments, J.Crew will use its 2012 CapEx on 42 new brick-and-mortar stores, store renovations and corporate office expansion. The retailer has already spent $37 million of its CapEx during Q1, which ended April 28, 2012.
Lastly, I found the quote from Libby Wadle super interesting- how J.Crew can share inventory among their channels (brick & mortar and online). So does that mean that prices will match up? Not just sale prices, but regular retail prices too. For example, the Perfect Shirt in Chambray Polka Dot (Item 89276) is currently $88 online and $78 in stores.
What are your thoughts on the IT upgrade at J.Crew? Do you think you will see the improvements? What are your thoughts on J.Crew's ability to match up inventory among their various distribution channels?
There will be some changes for the b&m sales associates. SF has been testing iPads or an iPad like device that allows them to order from it. This means they can work w/a customer at the fitting room and do not have to leave them to go to the red phone to check on petite sizes in stock, etc... I've worked with some excellent SAs and I'm happy to see them getting a tool that will help them do their job even betterReplyDelete
It's about time, I think. The in-store PS up here also uses an iPad to check out items.ReplyDelete
Not sure whether the pricing will be identical for both channels, but it will definitely be an improvement for the online PS to be able to see store stocks, which are not able to see now, I understand.
As Rose says, it's about time. When I worked at the Gap, in the early 90's, ahem, SAs were able to check for an item across the country. Then it was a quick call to the store that had the inventory for a charge/send or store transfer. It boggles my mind that JC is only now clueing in on allowing their SAs to fulfill customer requests.ReplyDelete
Oh, how about a wishlist or customer reviews page? Gigi, you still have your countUP clock running? ;)
Closet Crisis - lol! Yes, it's still there. 621 days, 23 hours and counting - waiting for wishlist feature on jcrew.com. That's over a year and a half...sheesh.Delete
My store just got a makeover and they're using the ipad things too. Too the SA a little while to order a shirt for me using it, but I don't think she had much practice with it.ReplyDelete
I would still love a website upgrade, maybe so you could check stock in the store like @ Loft. Also, please, please give me a wish list!ReplyDelete
Torn - part of me thinks this is a great step forward, but part of me can't wait to hear the breaking-in-period stories. I bet a lot of them will involve the surprise consequences of the slippery keyboard.ReplyDelete
Considering every article about Dear Leader mentions he's ON THE BOARD OF APPLE(!), it's amazing to me how technologically inept j.crew is. Can't see if another store has an item, can't do much except print out mile-long return receipts (what's up with that?). Meanwhile Nordstrom can store all my info, scan an item no. and within 10 seconds place an order for me if not in stock at local store. Plus, ooh la la, the Nordstrom iPhone app. Scan, locate, buy, have a cappuccino.ReplyDelete
Barbabelle - I just LIKED your comment a trillion times. Also w/Nordstrom, I can place an order via chat, giving them my credit card info & everything.Delete
This is such a smart move on their part and something that would have been harder to achieve as a public company. I spoke to their (then?)-CTO at an event once and it sounds like their infrastructure is dense but not very agile. I hope they take advantage of all the technology that's out there, like the cloud to help during traffic bursts or updated servers that don't consume as much power as the monoliths from 10 years ago. And it would be amazing if they could make the inventory side of their ERP able to search stores for sale items!! It's ridiculous how customer service "can't" check the inventory for sale items in stores. The excuse that sale stuff moves too fast doesn't hold water with me.ReplyDelete
Sounds good in theory, but I'm having flashbacks to the great site "upgrade" of 2008...ReplyDelete
silver_lining: i was thinking the *exact* same thing. ugh! hopefully this change will go more smoothly! lol.Delete
That was such a disaster, I hope they have remembered the lessons learned, assuming they learned. I remember calling CS with a website issue and the guy actually yelled at me that the item was out of stock and that was why I couldn't select any colors, although I could select sizes. I was so taken aback that I sent a blistering email listing all the website issues I experienced and received an apology a couple of days later. I think they were really overwhelmed with all the issues.Delete
I remember how when the sales would start the website would constantly crash and people would comment here that the site was down or back up. I think that went on for over a year even.
My b&m also just got a makeover and while they didn't have any ipads (maybe they do by now? I was there the 2nd day of re-open), their registers could tell where to find an item. My ps said the system is still a little behind, but it helped him narrow down which b&m's to call to find my item. I guess this is why the red phones are going to be discontinued (or is this only a rumor?).ReplyDelete
math teacher, been wondering how you are. Yes, I also heard no more red phones. It'll be interesting.Delete
I just placed an order over the phone at my b&m this past weekend. The SA checked all my local area stores and was able to tell me where to go, but as I am lazy I asked if I could just order over the phone (it was just a normal phone though, the red one seems to have disappeared already).Delete
speaking of technology, i wish they'd archive the old catalogs online so when i see an item on pinterest that i must have, i can figured out what it's called! any help? thanks!ReplyDelete
This is timing. I literally just got an email from JCrew telling me the skirt I ordered (last SEPTEMBER) is no longer available. Seriously? Lame JCrew - very lame.ReplyDelete
That is interesting about phasing out the red phones! I have to admit- it is nice calling in and talking to a live person. I wonder if they would consider having both systems in place.ReplyDelete
Yes, they are phasing out all the red phones in favor of the new online/computer ordering system called Blue Martini... no iPad devices in my store yet, but we have been given instructions about doing online orders for customers in place of the phone (I'm an SA). I really like the phone/talking to a real person but Blue Martini is supposed to be very effective too.ReplyDelete
This is really interesting, I hope it improves their inventory/supply chain which has been spotty lately, as well as website order fulfillment. Next up - quality issues!ReplyDelete
Well, I'm sorry to share with you bloggers that I just closed my JCrew account. Due to this IT "upgrade" I didn't get e-statements for the last 2 months (I only buy Crewcut stuff, and I honestly have enough on my mind to remember to pay go online to my account every month to see if I have a balance on my account if JCrew does not send me a statement). I called their customer service and they would not waive the late fees for the 2 billing periods, only for one. So I paid up my account ($375) and closed it.ReplyDelete