J.Crew in London {the info!}

"Thanks!" to so many of you, including Teri Lynn, as well as Knit Yarns (in this post), for letting us know about the following news about our favorite retailer.

The following are excerpts of an article from Business Week (there is a lot of good stuff, click here to read in its entirety):

The J.Crew Invasion
By Emma Rosenblum
November 27, 2013

Dozens of shivering British fashion bloggers, TV personalities, and socialites snake down London’s Regent Street, waiting patiently to get into the Nov. 6 opening night party for the J.Crew flagship store. ...

...Lyons says there was talk of tweaking the collection to be more British “for maybe five seconds,” but “we have a point of view. We felt good about exporting what we were currently doing.” That includes everything from hair elastics to hand-knit Fair Isle sweaters to $1,800 embellished jackets. The vibe is casually stylish, cool yet cheerful. Perfectly American. ...

Back in the store the next day, Drexler, sitting on a couch in the women’s shoe area, is thrilled to talk about the transformation of his company from sweater catalog to the kind of international brand that draws A-listers on a chilly London night. “The party was below-the-radar cool,” says Drexler. “They all looked good. Oh my God, if we could look like that!”
Drexler, 69 ... is constantly doing his own market research and pauses to greet some VIP shoppers. “How do you like the new store?” he asks. (Everyone loves everything, which seems to disappoint him.) “The interesting thing about apparel and clothes is that it’s emotional,” he continues. “People’s emotions can change quickly. And the advantage we have in coming to London now is that it’s not J.Crew how it used to be. It’s J.Crew. It’s brand new. Oh my God!”

...With prices hovering above fast-fashion chains such as Zara (ITX:SM) and H&M (HMB:SS) but below designer lines such as Alexander Wang and Thom Browne, J.Crew has found a lucrative niche as an aspirational destination for younger shoppers and the go-to store for wealthy customers seeking wardrobe staples. “I don’t want to risk being arrogant, but I think a lot of what we’ve done has connected emotionally with America,” says Drexler.

...The words that Drexler and the president of the J.Crew brand, Libby Wadle (who heads merchandising and buying), use to describe the company’s international strategy are “thoughtful” and “careful.”

J.Crew rolled out shipping for online purchases in more than 100 countries last year, but the U.K. stores are its first physical outlets overseas under Drexler. He’s planning two stores in Hong Kong next spring. In addition to the Regent Street flagship, there’s a women’s boutique in the upscale shopping area of Brompton Cross, selling the higher-priced J.Crew Collection, and a men’s shop on Lambs Conduit Street that specializes in suiting. “We’re not flooding the markets. We’re not out to become a mass brand,” says Wadle, 40, who worked with Drexler at Gap and has been at J.Crew since 2004. “And so we’re putting a lot of pressure on the stores we are doing to succeed.”

...Lyons has made it less so. “Style is for everyone,” she says. “We don’t talk down to our customers.” The ethos of J.Crew is design plus value; the cashmere is made in Italian mills, but costs less than at Bloomingdale’s. Nothing falls apart. (If it does, the salespeople will happily replace it.) The post-2008 demand for value coincided with a resurgence in buying made-in-the-USA products and supporting local manufacturing. J.Crew smartly began beefing up its In Good Company offerings, which include American heritage brands ...

...Lyons’s influence is everywhere. Sitting at a large table in her office, which is white and airy and piled with sketches, she talks about her role at the company. “At the end of the day, all I really want is for people to be excited about clothes,” she says. ... Lyons is J.Crew the way Diane von Furstenberg is DVF; her own image is so intertwined with the clothes she creates that it’s hard to separate the two. Yet she says she’s not necessarily designing for herself. “You want to love what you make,” she says. “I don’t wear shorts, but we design lots of shorts. I can have a really robust dialogue about shorts!”

...“This is not a store for college kids anymore. That woman over there—look,” Drexler says, pointing at a middle-aged shopper in the shoe section of the Regent Street flagship. “She’s buying three pairs of £375 leather ankle boots. They’re made in Italy, and designed by us. We take it from our costs directly, so there isn’t a double markup. These would be twice as much at a department store,” he says. The gray boots, with their sleek shape and pointed toe, do look a lot like a Manolo Blahnik version that sells at Barneys New York for $1,055. But to buy the same J.Crew shoes in America, customers pay only $375. Many items in the Regent store and on the U.K. website are priced the same in pounds as in U.S. dollars. With the exchange rate at $1.60 to the pound, cute ballet flats cost 40 percent more in the U.K.

Drexler has gotten some flak for the jacked-up British prices: “Shoppers shocked as Michelle Obama’s favourite brand J.Crew lands in UK … at double the price!” read a Nov. 8 headline in the Daily Mail. “Prices are different from country to country. I’ve been coming to Europe for decades, and it’s always been that way,” says Drexler. The bad press doesn’t bother him. “Opening international stores enormously helps your domestic business. Because then customers will buy even more when they come to America, because it’s cheaper,” he says.

...J.Crew is deep into its leasing negotiations for the two planned Hong Kong stores. The brand has some experience in the city—last year, it began a collaboration with upscale department store Lane Crawford, displaying J.Crew merchandise in a store-within-a-store format. Drexler says that venture “did really well, though I can’t tell you the numbers, ’cause then you’d have to report them.” His executives, however, seem more measured about J.Crew’s move into Asia.

I thought this article covered a lot of great topics. Some that made the top of my list: (1) That J.Crew stands by its product and nothing falls apart. HA! Yet, in the same breath they will gladly replace items that do. HA! HA! (2) Jenna does not design for herself. I respectfully disagree with that one. Did they forget the Jenna-clones for the models used at Fashion Week (and even the MasterCard commercial)?

(3) J.Crew has moved away from college students: I could not agree more. They do offer a student discount, but I don't know too many college students who can afford J.Crew today. In all fairness, they have done a great job differentiating themselves in terms of offering "classics with a twist". Yeah, they stray away with some questionable pieces, or some head-scratching company moves, but for the most part they offer styles I am interested in.

(4) I am glad they addressed the international price mark ups. It is amazing to see such an increase in prices, but offering an explanation (the reasoning behind it) helps a bit. Plus, I could not agree more that it helps domestic sales.

What are your thoughts? Do you agree or disagree with any of the points made in this article?

Mickey Drexler Recognizes Styling Issues at J.Crew {say what?!}

"Thanks!" to so many of you, including cc & Jayna W  (in this post), Disco George (in this post), as well as Chanie and Yossi, & Reedandbamboo , for letting us know about two related articles dealing with our favorite retailer.

The first article is from Forbes (click here to read in its entirety) and its about a particular customer questioning J.Crew's recent styling direction. The following is an excerpt:

...Drexler had gone to some effort to talk with my wife. After emailing a response note in less than 24 hours, he and J. Crew President, Libby Wadle, left a voice mail with cell phone numbers and then took her call when she rang back. In other words, Mickey Drexler went out of his way to do what an unfortunately small number of CEOs practice – he went the extra mile to get direct customer feedback

...The email from my wife that set this in motion was clearly well-intentioned but had a stinging critique of the company’s fall/holiday collection that she had seen in a preview sent to certain customers.  She had written the kind of email you assume goes into a black box and will never be read by an actual decision maker. Perhaps that was why my wife let fly some of the pointed candor usually reserved just for me. “I am so disheartened and disappointed that you are leaving your core values and styling and abandoning your loyal customers,” she wrote. “I would have thought you had learned your lesson at the Gap!! Why mess with these iconic brands and change them into something they’re not?” Ouch.

...J. Crew’s leadership team proceeded to ask what my wife liked and didn’t like about the company’s styling, as well as what was missing in her opinion. They listened intently and respectfully while politely noting that the preview photos my wife had seen had been taken from a fashion show so gave a different brand impression than regular customers may have anticipated. Drexler also stood his ground on the need to continue evolving the company’s style as competitors attempt to copy its success. He went on to say, however, that in the company’s desire to embrace change, the team also shared the view that some of the styling had perhaps strayed too far from the classics and brand messaging for which  J. Crew had become known. Drexler’s views had been shaped, in part, by his recent trip to stores with Wadle so he could hear firsthand from customers and frontline sales associates. “We are on it for sure,” he later emailed my wife. “I hope you see a difference this fall.”

...Drexler not only pays attention to what customers are saying but also unabashedly acts on it, never apologizing for getting involved in the minutia of business operations. He will be the first to say that attention to detail is crucial for creating a product and brand experience that makes customers care enough to write those nasty letters in the first place. “Ask your customers if they’d like you to micromanage,” he once said in response to those who criticize his hands-on style. Yes, Mickey, we like it.

The second article is from Racked (click here to read in its entirety) and it picks up on the Forbes article. The following is another excerpt:

...Two things that happen next are of interest. First, Drexler actually called DeRose's wife to hear directly from her what she liked and didn't like about the line (which, while unconventional, isn't so surprising. Drexler is an unapologetic micro-manager of legendary status). And second, he admitted J.Crew may be going too far in some of their styling. Which is a bit of a surprise.

Mrs. DeRose's perspective is not one we come across too frequently in world of fashion journalism. The fashion media applauds the excitement Jenna Lyons has injected into the brand with her distinctive preppy-chic point of view, and Racked readers, at least, tend to agree with the media. J.Crew's New York Fashion Week shows are by far the most popular shows of each runway season on Racked.

But Mrs. DeRose has an interesting point. If, say, you're a stay-at-home mom with a couple of teenagers to look after (and, for sake of argument, you don't happen to be Michelle Obama), print mixing and pops of color may not be your thing. J.Crew used to have something to offer that customer. Do they still? Judging from the brand's current homepage, which pictures a grid of several windblown models in styles like peter pan collars, pajama tops, printed pants, and office-ready dress shorts, maybe not. ...

I think it is great that Mickey reached out to a customer, Mrs. DeRose, who expressed some dissatisfaction. It speaks volumes about the company who really does want to take care of their clients. Kuddos to J.Crew!

As for the content of the articles... DeRose speaks for many of us who think some of the styling of J.Crew can be too "aspirational" for its core customer at times. It is a topic that has long been discussed on this blog. Back in 2008/2009- we started seeing crazy layering (like 4-5 visible tops with a pair of shorts- um, okay) to funky pattern matching as of late (which Jenna Lyons loves to wear and can pull off, but not so much the rest of us). How many of us talked about tagging most of the pages in J.Crew's past catalogs (to purchase and wear entire outfits), only to see a few tags present in the current years? While at it, how many of us talk about a visible decrease in quality with an equally visible increase in price? (It be nice to machine wash $40 tee shirts without wondering if holes along the seams will appear.)

It's great that J.Crew is doing so well and repositioning themselves in the upper echelons of the fashion industry. Thanks to those moves, J.Crew is still offering pieces that I have to own and causing their competitors to copy them. However, the fact remains that J.Crew is not a premier luxury fashion brand (a la Stella McCartney, DVF, etc.) So it would be smart for J.Crew to still keep one foot in the classic clothing realm while one foot is in the fashion forward realm to explore the latest trends. (In other words, J.Crew don't get rid of what you do best like the Pixie Pants and the button down shirts! And please J.Crew, don't reduce quality, especially if you are increasing the base price!)

I also do think J.Crew is "coming back home". They are trying to offer pieces for their existing clients- pieces that they have been known for. For example, we have seen several prints (like the Regatta) from J.Crew of y'ore appear in the latest roll outs. Moreover, they have brought back a lot of the hacking jacket details this year and last year (like the ornate enamel buttons) that were missing since 2009. So for that, I give them credit (and I thank them!) They are listening.

What are your thoughts? Do you agree with J.Crew's current direction? Do you hope for changes? If so, what kind?

J.Crew's First Quarter Fiscal 2013 Results

J.Crew recently shared their results for the latest quarter (for the three months ended May 4, 2013). The following are some highlights from the investors call (click here to read the Seeking Alpha article in its entirety):

• Total revenues increased 12% in the first quarter, with the total company comparable sales increasing 3% on a realigned basis. This was on top of a 23% total revenue increase in the first quarter last year and a 16% increase in total company comparable sales.
• Total revenues increased 12% to $564 million.
• Our store sales increased 7% to $380 million, with net square footage increasing 9% versus last year, driven by 8 new store openings during the first quarter.
• Direct sales increased 23% and includes our J. Crew Factory and Madewell direct businesses.
• Gross profit was $252 million, with gross profit margin of 44.7% compared to 47.6% last year. The results reflect a promotional environment that we saw during the quarter, which led to a 280 basis point reduction in our merchandise margin year-over-year.
• Our inventory balance was $308 million at the end of the first quarter compared to $251 million at the end of the first quarter last year. Inventory increased 23% versus last year or 13% on a per square foot basis. 
• ...we are preparing for the opening of our first store in London on Regent Street prior to the holiday, which represents an exciting milestone for us in our international expansion efforts.

There was also a Q&A time with the J.Crew executives. The following two questions I thought were the most interesting:

• Question: When we look at the promotional environment and the hit on gross margin, I mean, do you feel that, that was driven by the need to clear out some of that more let's say cold-weather inventory? And how do you feel that that's going to trend going forward?
  Answer (from Libby Wadle): ...I don't really -- it really doesn't have to do with clearing through, I'd say, cold-weather inventory. I think a few things going on: a tough sort of macro environment out there. I think everyone was feeling the pressure. And with J.Crew specifically, we have a very tough full price comparison, so had some pressure there. And we had to change really how we had planned to do business based on the environment, and we did have to be more promotional. But it wasn't really about sort of leftover inventory as much as it was about sort of navigating through the environment in the healthiest way we could with the inventory we owned.
   
• Question: I am certainly not much of a fashionista, but can you talk a little bit about your fashion trends and how you feel about this summer's versus last year, whether there's enough newness that's going to get consumers shopping, anything you could provide there?
  Answer (from Libby Wadle): Of course. We feel good about our product and our fashion and our newness. What I will say is that, to be frank, we had a lot of competition on our franchise items at much lower price points this year. So what we did really well last year and we had been doing, we invented a lot of great franchise businesses. We saw a lot of that out there in the market and less expensive. So we are -- we remain focused really on innovation, moving forward, inventing new franchises and looking ahead, we feel good about our fashion. So that would be my answer about how we feel about our fashion.

Overall, our favorite retailer is still performing well. Although I am not too surprised to hear about the inventory / increased promotion situation. We have all seen how many {wonderful} back-to-back promotions J.Crew has been offering in the past few months. Plus, it does seem like the Sale section is plentiful right now. I can't really complain except for my spending has increased because of it! ;)

I did find it interesting that J.Crew's competition is starting to impact them though. For the longest time they seemed kind of invincible to the alternative offerings at lower price points. I guess it finally caught up with them. For example, how many of J.Crew's jewelry pieces are getting knocked off for a fraction (and I do mean, a fraction) of the price? 

What are your thoughts on this latest news? Any points you found interesting?

J.Crew's New President: Libby Wadle

"Thanks!" to so many of you, including GetFresh, who shared the following great article from Fast Company about J.Crew's Jenna Lyons Libby Wadle (click here to read in its entirety):

What Libby Wadle's Promotion Says About The Future Of J.Crew
The new president of the soaring J.Crew brand says she is a devotee of CEO Mickey Drexler. Could she one day have his job? Here's what she says.
By Danielle Sacks

J.Crew may have finally tipped its hand as to who will become the retailer’s new CEO whenever 68-year-old Mickey Drexler decides to retire. Yesterday Libby Wadle, J.Crew's executive vice president of brand, was promoted to President of the J.Crew brand, a title no one at the company has owned since 2010 when then-President Tracy Gardner left to “spend more time with her children." As I posited in this month’s Fast Company’s cover story, Wadle—a merchant by training—along with her designer counterpart, executive creative director and president Jenna Lyons, are rumored to be heirs of the company.

In many ways Wadle has spent her entire career working towards this moment as Drexler’s understudy. In the 90’s the Boston College English major ventured west “dreaming of working for the Gap--for Mickey--to be perfectly honest,” she told me in March. She spent ten years working in Gap Inc, starting in its merchandising training program, working her way up to running Banana Republic’s women’s business. After Drexler was fired in 2003 following a plunge in the company's stock (despite turning the $400 million enterprise into a $14 billion empire) Wadle left--“it had already become a different place [without Mickey]”—and went to Coach to run their women’s merchandising group. That is, for a mere 11 months until Drexler called and asked her to run J.Crew’s Factory outlet business. “I was a little hesitant just because I didn't really want to do off-price [discount], but I wanted to work for Mickey so I didn't really think about it,” says Wadle. “I came and it was the best decision.”

In her eight and a half years at J.Crew, Wadle, 40, has risen to oversee every part of the retailer’s merchandising business. After Factory she took on Madewell; then in 2010 when J.Crew’s women’s business needed refocusing, she was charged with running the mother brand. During a tour of a J.Crew store with Drexler and gaggle of his top executives, Wadle--who could easily appear in a J.Crew catalog with her mane of chocolate brown hair that’s often tossed into a bun and natural fashion sense that rivals Lyons--is totally unassuming. But then she shows how she can meld with Drexler’s steam-of-consciousness mind just when he needs it. I ask Drexler if becoming a private company has enabled J.Crew to make more risks, and he replies, “I just think it’s much lower blood pressure for me”--then immediately turns to Wadle, for her to finish his sentence. “It doesn’t change the way we make decisions or run the business, whether we are public or private,” Wadle continues without missing a beat. “It’s a different kind of cadence of blood pressure.” ...

As a disciple of the Drexler school of merchandising, Wadle has also become an essential partner for the retailer’s chief creative, Lyons. But it’s not a partnership that is guaranteed in the culture of retail. “I think it's by coincidence that Jenna and I have good chemistry,” says Wadle, who seems to have a sisterly rapport with Lyons. And like many of J.Crew’s top talent who have been with the company for around a decade, Drexler describes the dynamic among the three of them like a healthy family. “It’s collegial, it’s argumentative, it’s disagreement, it’s agreement,” he says. But when asked who will take the helm on the inevitable day that Drexler decides to bid adieu, Lyons and Wadle both demure that they don’t allow themselves to contemplate it. “We don't want Mickey to go anywhere,” Wadle insisted back in March. “Okay,” I said to her. “But I think that would also be pretty badass to have two women running the company.” She took the bait and flashed a grin. “It would be pretty badass, yeah,” she says. “It would be pretty cool.”

The Wadle Way - 5 philosophies for running a design-driven retail business from J.Crew’s new brand president.

1. Merchandising is an art, not a science. “A lot of heads of CEOs or heads of businesses are merchants and what we do is we try to break things down into a formula and try to make things fit so they work perfectly. Mickey really doesn't do that. It's a unique kind of merchandising. It's not a formulaic merchandising that we do here.”
2. A merchandiser is the yin to a designer’s yang. “I am the business side to the creative piece. I'm Jenna's partner. So she and her team design the product, design the brand creative, all of that; my team picks the product, edits it, decides how much to buy and how much to put in which store it goes in, that kind of thing. Sort of creates the picture for the customer in the store, how often it comes in and then how much you should be buying of it...." I’ve worked with a lot of designers in the past and while I would never call Jenna a democratic commercial designer, she gets it and she also really understands our customer and she loves our customer. And she understands how far you can push her, how far you can't. And that's the beauty of it. Her head is not in the clouds but she also will push me and my team to move forward.”
3. Healthy tension between designers and merchandisers leads to a great product. “Tension will always help move each party forward, especially a merchant. A merchant can actually create a line but then it becomes very formulaic, it becomes very much what the customer has asked for, has bought in the past. But with a good amount of design inspiration and tension, there is always that healthy debate about how you move something forward. And that's the magic of the merchandising and the design relationship. So whenever you have a designer that's too easy to work with, it's almost not great.... It's not really a fight as much as a healthy conversation. So there is sort of a pass off that happens; design creates the line and then merchandising takes it from there.... The unique thing about J.Crew is while merchandising takes it, the creative influence doesn't end there, where it sort of ends in a lot of companies. The merchant here edit the line and pick the product but then we do the website and the catalogue and there is still a creative vision throughout that can really continue to inform everyone and it's sort of a real magical part of J. Crew.”
4. Collaboration is more important than ego. “I think you just have to stay constantly connected and partnered here. I mean it is about collaboration and it's not about blazing a trail that was your idea and you're going finish it out to the end. That won't work here.“
5. Acting like a small company breeds creativity. “What happens here is we have these small, special ideas throughout the company or a style that's selling really well that's a small investment. But that's how we make things big. We take these small things and then we distort them. We're constantly looking for these little pieces of gold, as Mickey always says, panning for gold, that's all we're doing. So it's not as much an invention as a distortion of something that was really unique.”

This article is a part of the series on J.Crew over at Fast Company. Refer to last week's "J.Crew's Jenna Lyons & the Cult of J.Crew" where the first part was discussed.

It is refreshing to read about J.Crew's Libby Wadle. Often times, it feels like the media focuses on just Mickey Drexler or Jenna Lyons. It is nice to change it up a bit and learn more about the other team members who are at J.Crew.

Did you enjoy the article? Any points you thought were particularly interesting? :)

J.Crew to Update its IT System

There is an article over at Retail Info System News about J.Crew upgrading their IT infrastructure (click here to read in its entirety):

J.Crew Invests $125M CapEx in Supply Chain and IT Enhancements
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.

I 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.

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?

J.Crew Talks Latest Quarter Results

Yesterday's "J.Crew Announces Latest Quarter Results {Q1 loss}" post quickly announced J.Crew's losses this past quarter.

A big "thanks!" to Jessica who kindly shared the following article from WWD with us (click here to read in its entirety) that gives us a more in-depth explanation:

J. Crew Reports $29.9M Loss
By David Moin with contributions from Evan Clark
June 9, 2011

Fashion misses had J.Crew Group Inc. seeing red in the first quarter, but executives stressed they’ve made corrections in the women’s assortment involving fashion content and inventory levels.

“Very simply, we underbought the best goods and categories,” Millard “Mickey” Drexler, J.Crew Group’s chairman and chief executive officer, told WWD. “In more cases than we would have liked, we didn’t have for our customers what we should have had.”

On Thursday, J.Crew posted losses of $29.9 million on revenues of $409.5 million for the first quarter ended April 30. A year earlier, J. Crew registered profits of $44.7 million on revenues of $413.9 million.

Same-store sales dropped 6 percent, versus a 15 percent increase in the year-ago period, and there was a 3 percent decline in comparable revenues, which includes store sales, direct sales and other sources of revenue. The retailer, which had been on a roll for a long time, started to slow midway through last year as it cut a $3 billion deal to be taken private by TPG Capital and Leonard Green & Partners. The transaction was completed March 7. J.Crew releases financial results because of public debt.

“We missed a bit on the fashion novelty end of the business, but we feel very comfortable that has been fixed,” Drexler said. “It’s all about product, as it always is in our business, and frankly every other business.”

Drexler acknowledged not being “well balanced in the agelessness and timelessness of our assortments” and cited a lack of full-length sleeves, too many at three-quarter length, and skirts that were “a little too short.…They’re not anymore,” he assured.

The quarter wasn’t without some upsides. “We continued to strengthen our franchise businesses — cashmere, pencil skirts, blazers, ballet flats — those categories where we have leadership and customers come back to us day in, day out,” Drexler said.

He also cited strength in Crewcuts, accessories and men’s wear, as well as Madewell, where the attitude is getting increasingly bullish. Madewell is opening 13 stores this year, taking the chain to 33 units, in addition to recently launching madewell.com.

In an earlier conference call, James Scully, chief administrative and financial officer, noted: “While we are disappointed in the year-over-year decline in first-quarter earnings, it is worth noting that last year was an historical peak by a significant margin.”

Scully sees “continued weakness” in the top line through the first half of the year. However, “The good news is comparisons get easier in the back half.”

Also, “year-over-year declines in Q2 will not be worse than it was in Q1,” Scully said referring to gross margins, which fell to 44.3 percent of sales from 49 percent on increased markdowns and promotional selling, as well as accounting changes related to the deal taking the company private. Adjusted earnings before interest, taxes, depreciation and amortization, eliminating costs from the transaction, fell 16 percent to $74.7 million from $88.9 million.

“We feel comfortable inventories will come in line with sales as we move through the second quarter and second half of the year,” added Stuart Haselden, treasurer.

Promotional activity in the second quarter “won’t be any worse than Q1.…We’re hoping that it’s better.” Industry analysts noted Thursday that J.Crew isn’t the only retailer hitting headwinds in women’s. Through the industry, there’s been a lack of newness, high inventories, quality being compromised to mitigate inflationary cost increases, rampant discounting of brands online and exorbitant gas prices pinching spending, primarily at the low and midtiers.

Still, despite its recent weakness, women’s will continue to remain the biggest piece of the J.Crew business, according to Libby Wadle, executive vice president, retail, factory outlets and direct. “We still have franchise [women’s] businesses that we are not walking away from.” In addition, the company will emphasize more novelty items, prints and color. “As we get back into those businesses, we feel better positioned,” Wadle said.

J.Crew is also sticking to its plan to increase retail square footage in the low- to mid-single digits annually over the next three to five years. J.Crew is opening nine stores in 2011, including one Crewcuts and the first J.Crew in Canada in September. The Web site goes live late summer in the U.K. The company is also looking at Asia and other parts of the globe for possible expansion, but is early in the process.

The outlet business is another growth vehicle, with 10 percent annual increases in square footage seen over the next three to five years through store expansions and new stores.

Couldn't agree more with not having enough of the popular inventory. I ordered the Oxford Ballet Flats (Item 36226; $138.00) back in January or February and they were already wait-listed for May. Then I got an email in April stating that my ordered was cancelled. I checked the website and my size was available, but with a new wait-listed date for August. So I decided that I didn't need them that bad and did not re-order my full price purchase.

As for the skirt comment... YES! The skirts are too short! It felt like most of the skirts were 18" or shorter. I don't mind the length for some skirts being short, but give me some knee length skirts (and not just in pencil skirt shapes). As a result, I ended up buying about 10 (yup, 10!) skirts from Anthropologie this Summer (so far).

What are your thoughts on this latest news? Do you think of Mickey Drexler analysis? Any points you found interesting?