J.Crew's Sales Picked Up Last QuarterOver at MarketWatch (click here), they share:
After a whole lot of markdowns, J.Crew says it has a better handle on its inventory levels.
By Eliza Brooke
September 5, 2014
While J.Crew's creative team is busy preparing for the brand's Fashion Week presentation on Tuesday, its business execs had some pleasant news to report on Thursday afternoon. Sales picked up for the brand in the second quarter of the year, with revenue increasing 12 percent to $627.2 million — this after a season of markdowns that wound up damaging J.Crew's business. Overall, the first half of the year saw 9 percent revenue growth.
On the company's earnings call, execs said that while inventory is still higher than they would like it to be, the percentage of spring and summer product still in stores is lower than it was at this point last year. So, according to them, inventory composition is "healthy."
As might be expected, direct sales are growing at a faster clip than in-store sales — that would be 14 percent ($173.6 million for the second quarter) and 11 percent ($443.5 million), respectively. Comparable company sales also improved over the course of the first half, up 1 percent for the half following a 4 percent rise in the second quarter.
J.Crew Group profit declines 38%
September 4, 2014
J.Crew Group Inc. said its second-quarter profit fell 38% as the privately held retailer posted higher revenue amid increased expenses. The retailer... said same-store sales rose 4%.
For the quarter ended Aug. 2, the company posted a profit of $10.8 million, compared with net of $17.5 million a year earlier. Revenue rose 12% to $627.2 million. The company saw an increase in the cost of goods sold as well as in general and administrative expenses. ...
Well mixed news for J.Crew but at least they are getting a handle on their inventory. I know we have talked a lot about this topic before (click here). It's good to see J.Crew taking the right steps necessary. I am also curious to see how well they manage the Spring and Summer inventory now that we are transitioning to Fall and Winter.
Speaking of which, I thought Teacups (in this post), had an interesting take on the situation:
I probably haven't been around the JCA community long enough to recognize if this lull or inactivity is from a collective "crewed out" experience or if it is part of a cycle. For me personally, I would say the current malaise is largely a result of the depressing feeling of visiting the jcrew website. I recognize that they are not the only retail clothing manufacturer who has gotten caught with far too much inventory, but there has to be a better way of managing it than letting items sit in the sale section for the rest of eternity. There has to be some time limit. I don't know if the magic number is 4 months, six months or whatever. I do know that looking at the sale section hovering at about 2000 items makes me not want to even begin to look through it. When you find items you have sitting in your closet languishing month after month, you are less likely to want to wear it or purchase more items which are likely similar. And I love a sale. I just feel like they Jcrew needs to take the hit and move on before all of the joy is gone and I become less interested in the site and the store. I have not given up yet but they need to hurry.I love J.Crew sales! It is always exciting to see that coveted item get marked down, and make its way to the home closet. However, there is an abundance of merchandise sitting in the sale section from last year. Just lingering a lot longer than usual, without any additional mark down. As a result, I have been finding myself checking out the sale section less frequently too.
What are your thoughts on J.Crew's performance? What do you predict will happen with their inventory issues moving forward? Do you think J.Crew can reverse their issues?
OT...article on The New York Times website Jenna Lyons beauty routine. and it looks like JCrew Spring 2015 debuts at fashion week this Tuesday......
ReplyDeleteWhile I love a good sale too, I would like to see more basics back at reasonable prices. I think the biggest issue J. Crew has had over the past few years is the push toward a much higher price point, and more collection pieces. I think they are losing their original customer base by charging too much for trendier items that do not last more then a couple of seasons at best. I would like to see them return to a more classic design line and control their pricing. I also believe that quality control is hurting them as well. I cannot tell you how many items I buy end up with holes or falling apart after wearing a few times. I would rather pay full price for a quality item at a good cost point, then keeping buying items on sale that fall completely apart.
ReplyDeleteA problem they've run into is that everyone is copying them. The recent Land's End catalog even looks like a J.Crew catalog. This has been going on for the past couple of years at Ann Taylor, Loft, BR and Gap. I suspect there are others. Sure, I recognize they copy high end designers, but the clothes that used to appear unique to their mall store are appearing in every other mall store. Not everything, but a lot. Who knows? Maybe the loss of key people has also contributed to this too.
ReplyDeleteThe problem I see with J.Crew is: 1. Inconsistency ... Pricing online vs. in the store ... The prices should be the same. Also, the discounts they offer shouldn't go from being 30% off one week to 25% off the next week for the same merchandise. 2. Quality ... Low quality merchandise + high prices = MARKDOWN ... Make quality clothing for decent prices, and the merchandise will sell. Save all the trendy cheap fast fashion for Forever21 and H&M. Last but not least, I love seeing all the bloggers receive nice gifts from J.Crew {the most recent being flowers and the new fragrances}. Not! How about rewarding your loyal customers occasionally?
ReplyDeleteBirdie butter, I totally agree! This is actually a total pet peeve with Anthro too. Instead of engaging the blogs directed towards building an community, I see bloggers who don't even shop there running sponsored posts or dressing in c/o clothing just because they have big audiences. However, I am "rewarded" with items that arrive damaged or fall apart within a wear or two. Tory Burch gifts its loyal customers with a $50 gift card on their birthday, and sometimes the holidays. I know both J. Crew and Anthro do little holiday presents but I have never gotten one and it's certainly not for lack of spending. Forget the gifts, I would just be happy if my orders that go through that specific quality control actually make it in pristine condition. I had a pair of Cleos that were quality checked arrived with a piece of fabric missing near the sole. Ok, getting off my soapbox now!
DeleteSeems like the mens' side of the company is in better order than womens'. The ladies' side is much larger and has a wider range of products, but the guys' side just looks tighter, more cohesive and like it was all put together quite thoughtfully. Don't get me wrong, there are some missteps too, just looking fewer than the other side.
ReplyDeletePerhaps Frank needs to give Tom some friendly advice?
With the more boyish looks that we're seeing lately for women, I've been tempted to pick up a few men's or boys' items for myself, actually!
DeleteI have been dying to have Frank take over the women's side. I was just whining about it again last week. :) Men's is so much better than women's in almost every way. It would be a smart business move for them too because I'm sure women spend far, far more.
DeleteI actually buy from the boys. I love the Tshirts.
DeleteI am not surprised that this is the case. It speaks poorly of them that they let the items linger for months in the sale section. If they slashed the prices and got rid of final sale, they would do a lot better. After seeing that poor sequin patchwork skirt in the sale section for years, I am much less inclined to buy something that's been languishing there. Maybe it's just me, but the excimenet wanes when I think of getting an "old" item that has been lonely in a warehouse collecting dust.
ReplyDeleteI think adopting the pricing model they have is just plain daft. New arrivals are overpriced to drive up the perceived vale of the product. Then, customers are expected to overindulge once the items hit sale/promo. This sort of strategy isn't a strategy followed by a company that believes in the intrinsic worth of their own product. Nor does if honor the inteliligence of their buyers.
ReplyDeleteI might also buy more on sale with a better returns policy. I have way too many items that I bought on Final Sale become part of my regret wardrobe that unless it's like a major staple like a tee or socks, I won't buy. The sizing has become inconsistent and since petite items aren't carried in store it can be a gamble. I wish they offered better measurements like Boden which is very detailed.
ReplyDeleteI agree--final sale is a lot of the problem. I had shopped j.crew religiously for many years and then quit right around the time final sale started. My body was changing too much to have a confident sense of sizing. I feel a little better about now final sale for some things, especially items I am picking up an extra color in or an accessory, but there are many that I would much rather be able to try on first (especially sizes and items that are not available in store, like tall or those long torso swimsuits).
DeleteI basically "stopped shopping" JCrew when they changed their return policy to 30 days in store and 60 days for online and the continued long length of final sale online. I don't have time to run to the mall as much anymore and don't have a JCrew near me anymore so I just don't shop from them as often. Boden makes it easy with free returns, free shipping and customer friendly return policy. When I do go to the mall 4-5 times a year I will stop and check out JCrew but I don't go weekly or even twice a month like I used to:)
ReplyDelete