J.Crew's Jenna Lyons on Creating J.Crew's Look

"Thanks!" to many of you, including Molly K., as well as Suzy and GigisGoneShopping (in this post), who let us know that J.Crew's Jenna Lyons was featured on CBS's This Morning last week.

To read the transcript in its entirety, as well as videos, click here.

J.Crew creative director's secret to fashion
CBS News
November 19, 2014

Jenna Lyons is one of the most influential women in fashion. As creative director at J.Crew, she is credited with giving the brand its unique style, catering to everyone from celebrities to students. But as the company struggles with falling profits and tries to expand abroad, Lyons has her work cut out for her.

She's more than game for a challenge, reports "CBS This Morning" co-host Norah O'Donnell. Walking around with Lyons at the J.Crew office, you might notice one thing about her: she wears five-inch heels.

"I feel like I can see everything better," she said. "I can see over all the aisles, I feel a little bit more glamorous, especially on those days when, you know, I have a lot going on." But at six feet tall, she doesn't have a height complex.

And if Lyons has no aversion to heights, it's because she's scaled a lot of them. As president and creative director at J.Crew, Lyons helped transform a once-homespun mail-order brand into a multi-billion dollar retail powerhouse.

"I always liked being surrounded by pretty things, and sometimes those pretty things looked beautiful next to each other, and sometimes they actually created a strange magic. Those things happen when you come home after a night and you throw off your blazer and all of a sudden it's landing on top of your necklace and it's landing on top of a blouse that you wore the day before. Clearly, I'm very neat," Lyons said, laughing. "And all of a sudden they form something different that you might not have thought about."

Lyons has no problem admitting to the inspiration for her genius; she gets her ideas from the pile of clothes on the floor.

"I'm not gonna lie, I do," she said. "There you go, that's the secret."

Lyons grew up in California, sewing her own clothes and dog-earing catalogs from her future employer. She moved to New York to attend Parsons School of Design and, after interning at Donna Karan, joined J.Crew in 1990.

She described her role there as an assistant to an assistant to somebody else's assistant.

"Yeah, it was like that," she said. "I think I sat in a hallway with my computer sort of with an extension cord plugged in."

But she felt much more at home at J.Crew than she did at Donna Karan.

"Having not been sort of like the cool kid in school, and being a little bit of the outcast when I was younger, I remember one of the first couple of times when I felt attractive or beautiful," she recalled. "And I realized that that was important to me, to be able to do that for everyone, not just people who had the ability to write a $2,000 check for a jacket."

She insisted she wasn't the popular kid growing up. "Oh God, not by a long shot," she said. "No, I was unfortunately incredibly tall, oddly skinny."

She also dealt with a personal issue that had other students making fun of her. "I have a genetic disorder called incontinentia pigmenti," she said, "and the result of that means that I had bald spots on my head, which I didn't even know I had until the girls were talking about me behind my back in school."

Lyons faced bullying. "I got beaten up quite a bit... on the way home from school, yes," she admitted. "It's traumatic, but it also, I think, is an opportunity to decide what you wanna do with that. Like, you have two ways to go. You can crawl under a rock, or you can actually decide to do something with it."

Lyons didn't seek out a rock, though she did endure some hard places. Her early career survived a decade of turmoil as J.Crew shuffled its looks and its leadership. It took Mickey Drexler, the so-called "king of retail," named CEO in 2003, to finally define J.Crew's aesthetic and five years later, to charge Lyons with curating it.

People have said that she and Mickey have a very special relationship, drawing comparisons to the relationship between Steve Jobs and Jonathan Ive at Apple.

"I was going with Sonny and Cher, but okay," she said. "There is no question I think he is an inspiration. He gets excited to the same level of excitement he did the first day he walked in here."

In a few seasons, J.Crew clothing went from cloistered and collegiate, to laid-back, grown-up, big-city cool. Its stock surged when first lady Michelle Obama and her daughters wore J.Crew outfits at the 2009 inauguration.

"I do a hula dance when I'm in the airport and someone walks by in a coat, you know?" she said. "When Michelle Obama came out in our outfit, I think the hula dance turned up a notch. And to have the First Lady feel accessible for America? That's really never happened before."

For some, it still hasn't. J.Crew prices do start in the single digits, but can reach well into the hundreds of dollars. There are some sweaters that sell for $98, but others are priced at $800 -- not necessarily the most accessible price.

"We had some of the more expensive pieces in the catalog, that was something that we got feedback on and we have changed," she said. We still have that product, but it's certainly not for everyone."

They've also received feedback on a recent addition to their clothing line. In July, J.Crew suffered criticism for introducing a 000 size. "Interestingly enough, part of that was driven by the fact that we launched a store in Asia, so we opened our first store in Hong Kong, and some of the people that were living there had tried on our double zero and said, 'it's actually not small enough,'" she explained.

They were shocked, and knew they had to change to fit their new customer base. "I think there was some idea that maybe we were doing it for, you know, vanity sizing, which, I mean, absolutely was not the case," Lyon said. "We got a lot of negative feedback; we also got a lot of positive feedback from people who are like, 'No, no, no. It's for me, it's for me. Don't take it away.'"

Beyond Hong Kong, J.Crew also opened in London and, come Spring, will be in Paris. The expansion comes despite a bruising year, in which second-quarter profits fell almost 40 percent.

"I've been incredibly fortunate, I have to say, oddly enough, to have been through this before -- we've had tough quarters before," she said. "We've had tough moments. As much as it's hard to go through, I'm not worried," said Lyon, adding, "We have not peaked."

There is another video about the behind the "behind the scenes" interview:

This is a great segment showcasing Jenna Lyons and her passion for J.Crew.

What are your thoughts on the article and video? Any points that you found very interesting? Please share! :)

Is J.Crew Coming to Paris?

The following is from the Fashion One's Fashion Blog (click here to read in its entirety):

J.Crew eyes France for expansion
By Fashion One 
November 6, 2014

The American retailer is continuing to grow in Europe, expanding out from London to the French capital.

J.Crew is soon to land in Paris with two new stores set to arrive in the city's famed Marais district (one for men, one for women). The brand will also be opening a fifth store in London.

"Paris is one of the great fashion and consumer cities in the world, and lots of French customers are shopping in our New York stores -- it wasn't a difficult choice," explained J. Crew CEO Mickey Drexler to WWD.

The Paris women's store will open in March on Rue Malher, with 1,830 square feet (170 square meters) of shopping space and a renovated wooden storefront, with stone interior walls, and oak, marble and brass details.

The slightly smaller men's store will arrive in September next year, and will reportedly resemble the J. Crew Liquor Store in New York's TriBeCa. The fifth London store will also arrive in 2015 and will be housed in a former bank on Marylebone High Street.

This is such exciting news! I think J.Crew will fit very nicely in Paris. Yes, there is a lot of competition. However, there are also a lot of tourists who will be eager to stop and shop at J.Crew. Also, the French retail scene does not employ sales as often (I think traditionally it is twice a year), so that should delight J.Crew CEO Mickey Drexler.

But the real question is: What will the French customers think of all the French-phrase clothing at J.Crew? ;)

What are your thoughts on J.Crew's latest international expansion? Are you excited to see J.Crew moving to Paris?

J.Crew Struggles {Mickey Drexler Definitely Does Not!}

"Thanks!" to Stapelia N. who shared the following article from the Bloomberg (click here to read in its entirety & to watch a video).

CEO Drexler Amasses $350 Million as J.Crew Struggles
By Lindsey Rupp, Carol Hymowitz and David Carey
June 13, 2014

Mickey Drexler has amassed more than $350 million from the leveraged buyout of J.Crew Group Inc. even as he struggles to revive sales and restore the apparel chain’s fashion cachet. Three years after taking the retailer private with private-equity firms TPG Capital and Leonard Green & Partners LP, J.Crew’s chief executive officer is battling slowing sales as shoppers decamp to more affordable, trendier rivals. The challenges reduce the likelihood of an initial public offering this year and make J.Crew less appealing to a potential strategic buyer such as Japan’s Fast Retailing Co.

“Mickey has done very well for himself,” said Eric Beder, the managing director of equity research at Brean Capital LLC. “But J.Crew has to reinvent itself given the prevalence of fast fashion and a customer who isn’t paying up that much for basics, which is a large part of the brand.”

Drexler invested $11 million of his own money when he was named CEO in 2003. In the 2011 buyout, his stake was worth about $301 million -- he pocketed $202 million of that and rolled the rest into an 8 percent stake, according to company filings. He also got $55 million in dividends as part of the $681.5 million J. Crew has paid the owners since going private.

In all, Drexler, 69, has accrued about $380 million since becoming CEO, including options awards, salary and bonus, according to company filings and a Bloomberg News analysis. He and his private-equity partners have recouped over half their $1.23 billion investment.

Possible Sale
In February, two people with knowledge of the matter said J.Crew was in talks about a possible sale to Fast Retailing, which owns Uniqlo. Last month, Drexler said there were no immediate plans for an IPO or sale. The bonds J.Crew sold last year to finance the dividend are indicating diminished odds that the retailer will explore a stock sale anytime soon.

...Initially, Drexler was just what J.Crew needed. After the former Gap Inc. CEO joined in 2003, the chain quickly morphed into the go-to place for younger shoppers looking for stylish T-shirts and making investment purchases of cashmere sweaters; career women couldn’t seem to get enough of the pencil skirts and oversized blazers.

When First Lady Michelle Obama wore a J.Crew cardigan while gabbing on Jay Leno’s couch in 2008 and the first daughters donned Crewcuts, the children’s line, for President Barack Obama’s inauguration, J.Crew reaped fashion status comparable to superstars such as Ralph Lauren and Donna Karan.

Key Rationale
But by the time Drexler took the New York-based company private, it was starting to flag. A key rationale for the $3 billion buyout was giving Drexler an opportunity to work his magic again without Wall Street watching his every move.

It hasn’t happened. Though store mannequins are skillfully designed to prod shoppers into buying outfits for day and evening, there’s a sameness to the fashions, said Shaz Kahng, who advises private-equity and hedge-fund firms about retail and luxury goods. As prices have crept up, younger shoppers, once a mainstay, have fled to Uniqlo, H&M and Zara, she said.

Elleree Erdos, a 24-year-old associate at Craig F. Starr Gallery in New York, no longer gets her basics at J.Crew, as she did in college. “Their basics are a little pricey,” she said. “And their statement pieces are just so branded that if I got a dress at J.Crew five of my friends would say, ‘So-and-so has that dress,’ and that’s not what I want in clothes.”

HBO Hit
Creative director Jenna Lyons, a style icon who appeared on the hit HBO show “Girls” and is a walking advertisement for J.Crew, is under pressure to recapture her fashion mojo. She may be counting on the fall collection, which includes slim-fitted coats in an array of hues and wide cropped pants.

The company reported a first-quarter net loss of $30.1 million, compared with income of $29.3 million a year earlier. Revenue rose 4.9 percent to $592 million as gross margin slipped to 38.7 percent from 44.7 percent. J.Crew incurred a one-time refinancing loss of $36 million in the quarter.

Citigroup Inc. credit analyst Jenna Giannelli projects earnings before interest, taxes, depreciation and amortization of $294 million for the current fiscal year, down 21 percent from last year. If operating results continue to decline, the company said this month that it may write down the value of the business.

Boosted Debt
While J.Crew funded the first dividend with cash on hand, it boosted debt by half a billion dollars to $2.05 billion to pay the second one. Cash generation has shrunk, with free cash flow after interest falling to about $40 million in the 12 months ended May 3. The company had $128 million of working capital at the end of the first quarter and a $250 million credit line.

Like many U.S. apparel chains, J.Crew is looking abroad for growth. The company operates three stores in London, two in Hong Kong that opened in May, and 12 in Canada. In an interview in Hong Kong last month, Drexler said he’s targeting capital cities, including Paris, where the chain plans to open one or two locations by the end of 2015.

“The ambition is to go slow and do it well with great integrity, and not do it quickly and lose the quality control,” he said. “When we see the right location, we will take a shop. We’re not looking everywhere and anywhere.”

Beder said Drexler is smart to do the international push while the company is private because of the ramp-up costs. Capital spending has surged 35 percent since fiscal 2011. Still, because J.Crew is a “uniquely driven American product, we’ll have to wait and see if it resonates with Europeans and Asians,” Beder said.

New Markets
In a statement today, a J.Crew representative said: “We are very pleased with the performance of our initial stores in both the U.K. and Hong Kong which are exceeding expectations and rivaling some of our best stores here in the U.S. We’re also excited to explore new markets in both Europe and Asia to open additional stores where we find great locations.”

On a recent Saturday afternoon, J.Crew’s store on London’s fashionable Regent Street was a quiet oasis after the crowded street; none of the checkouts was permanently staffed.

David Anthony, a 46-year-old display manager at a chain of coffee shops, was among the handful of customers browsing the store. He found a cardigan he liked but wasn’t prepared to drop 248 pounds ($420). “Why should I pay that kind of money if I can get something not dissimilar at Zara or H&M?” he said.

This article and the article discussed in last week's "J.Crew's Got an Inventory Problem {no, really?}" post, showcase a store that is struggling to stay on top of their game. J.Crew is still doing well compared to other retailers- as the industry is struggling in general.

My unsolicited advice for J.Crew, to turn things around, has not changed:

1. Offer kill prices for sale items that are a year old. Seeing those items in the sale section, with the same high price point season after season, impacts how customers see the rest of the sale section. (For example, many of us don't bother checking the sale section because we are tired of seeing the same things.)
2. J.Crew needs to offer "classic with a twist" offerings again. For example, more perfect shirts with Liberty for London prints. ...And Summer maxi dresses that are fitted, as oppose to shapeless sacks. ...And bring back custom-prints like the one on the Veruschka Dress.
3. Hire a really good stylist. Treat the catalog, er style guide, like the store mannequins and make customers want to buy the whole outfit.

Trust when I say that I still buy my fair share at J.Crew because they still offer pieces I love. (Right now, it is the only store I buy clothes et al from.) My suggestions just come from a place where I want to see J.Crew back on top. :)

Other tidbits:

1. I thought it was interesting the article & the video associated with the article stated younger shoppers (those in their 20s) are turning away from J.Crew.
2. I am super excited about the Fall Collection. Slim fitting coats? Array of hues? I am in!
3. Dayum! Mickey got a great return on investment turning $11 million into $300 million in less than 10 years. If only I could get such a return on my savings... ;)

What are your thoughts on the article ? Do you think J.Crew will continue to perform well under Mickey Drexler? Any points caught your interest? :)

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?

J.Crew Opening another Store in UK This Week

J.Crew has been a busy-bee with their international expansions. The most recent news: J.Crew is opening a flagship store in London this Friday. The following is from FashionMag (click here to read in its entirety) that shares J.Crew's international vision:

J.Crew opens first of three London stores
By Olivier Guyot
October 16, 2013

In 2008, J.Crew withdrew from Japan after inheriting a licensing deal that did not correspond to the brand's strategy. The company closed its 70 stores in the country and refocused its energy on its domestic market of the U.S. In 2012, with almost 300 U.S stores and one in Canada, CEO Mickey Drexler announced a new expansion strategy for J.Crew.

Faced with the arrival and development of brand such as Uniqlo, H&M and Zara in the United States, J.Crew set out about implementing its international expansion plan. The first step consisted of launching an international e-commerce site, a project which went almost a year ago.

Today, J.Crew takes another step towards its international expansion plan. After having announced plans to open in the UK and Hong Kong, the brand has opened the doors to its first store in the British capital of London.

Located at 38 Lamb’s Conduit, J.Crew has opened a store exclusively dedicated to its menswear collection prior to the opening of a two further stores next month. J.Crew will open a womenswear store at 175 Draycott Avenue and its highly-anticipated flagship store on Regents Street, taking the place of the former Burberry boutique. The flagship is set to open on November 8.

The British launch of J. Crew is a first step towards a European expansion. Last year, Drexler said the company was eyeing up three locations in Paris. With prices on some products bumped up almost 40% from those in the U.S, the question remains whether or not J. Crew will manage to find a foothole in the European market.

I did not realize how many stores J.Crew will have in London! That is great news for our British aficionadas. Although, I am even more excited to learn that Paris might be getting their very own J.Crew stores!!!

On a different note, I do appreciate that the article pointed out the price discrepancies between US and outside-US prices. With items marked up as much as 40%, will consumers find the value in J.Crew's product? Frankly, I don't know. I mean, I love J.Crew. That is a given. However, I already find prices are too high for certain pieces. I can't imagine paying another 40% on top of that.

What are your thoughts on J.Crew's international expansion news? Will you be visiting the newest locations in London? Please share! :)

J.Crew Pops Up in London

"Thanks!" to many of you, including GigiOfCa (in this post) who let us know that J.Crew opened a pop-up store in London.

There are a few posts about this event over at J.Crew's own 770 blog ("Hello, London: Up Early with Jenna"; "Hello, London: Our Pop-Up Has Arrived"; and "Hello, London: It’s Cocktail Hour"). All the photos in this post come from J.Crew's blog.

The following is from NY Daily News (click here to read in its entirety) about the pop-up store:

J.Crew opens flash pop-up shop in London: Temporary store open only 48 hours
For its first foray in the city J.Crew is setting up a temporary shop in the Western Transit Shed in King's Cross, London.
May 24, 2013

The preppy US retailer has opened a summer pop-up store in London and teamed up with the city's famous fashion school, Central Saint Martins, for a series of projects.

For its first foray in the city J.Crew is setting up a temporary shop in the Western Transit Shed in King's Cross, London.

Featuring the brand's famous monogramming service, as well as a selection of special Spring/Summer pieces and a preview of the Fall collection, the pop-up shop is set to live up to its name and will be open for just 48 hours, from May 24 to 25.

Longer-lived London plans include a design project and scholarship program with the city's famed Central Saint Martins fashion school, alma mater to Alexander McQueen, Zac Posen and Givenchy's Riccardo Tisci among others.

On Wednesday the brand's creative director Jenna Lyons set the school's knitwear students a cashmere challenge, with the winning design picked for production and sold in J.Crew stores around the globe.

"Knitwear knowledge isn't as prevalent in the US. Here, it's a much bigger deal" Lyons told Vogue. "You guys love a knit," added the 44-year-old designer.

J.Crew will also be awarding a scholarship (covering course fees and accomodation for a year) to one lucky applicant to the Central Saint Martins fashion MA program.

Central Saint Martins's famed fashion professor, Louise Wilson, explained the link between brands and higher education programs: "without brands' support, we would be dead in the water. We met through their fortuitous imagination. This is about live learning," she added.

J.Crew will be opening a full flagship in November on Regent Street in the famous West End of the city.

The pop-up store definitely looks intriguing! It has a more high-end feel than I was expecting it to. I am so curious what the Regent Street store will end up looking like now. (Probably like a concept store than the one in my mall.)

What are your thoughts on J.Crew's pop-up store? Do you like the layout? Are you excited about their upcoming opening in London?

J.Crew Announces Latest Quarter Results {making money!}

"Thanks!" to Kat (in this post), who shared the following from WWD (click here for the article in its entirety):

J.Crew Profit Vaults Ahead
By David Moin
August 29, 2012

J.Crew Group Inc. is running strong and bringing its business to new markets.

“It’s been a nice year so far,” Millard “Mickey” Drexler, chairman and chief executive officer, told WWD. “Every day we get a bit smarter about our business, but you can never let your guard down.”

On Wednesday, the company reported a robust second quarter, marked by a return to the black and strong sales and full-price selling across several categories. Executives also cited plans to add more men’s wear stores this year, and divulged the time frame for opening the first J.Crew stores in Europe and Asia, meaning the company is getting close to signing leases. A London store is seen opening in the second half of 2013, and a store in Hong Kong is seen opening in the first half of 2014.

...J.Crew reported net income of $22 million for the second quarter ended July 28, compared with a $10.5 million loss in the year-ago period. Last year’s loss was due to nonrecurring inventory and litigation costs associated with its acquisition by TPG Capital L.P. and Leonard Green & Partners L.P. in March 2011. In the 2011 period, the amortization of inventory from purchase accounting cost the company $22 million, and litigation costs reached $6.5 million.

Total revenues in the latest quarter rose 21 percent to $525.5 million, while comparable company sales increased 14 percent. Gross margin increased to 45.1 percent from 36.5 percent, reflecting healthy full-price selling.

Operating income increased to $62.1 million, compared with $12.3 million in the second quarter of 2011.

Men’s wear, according to the company, increased at a higher rate than women’s last quarter, and executives cited plans to open two more units this year, including a Ludlow shop in Copley Place in Boston on Sept. 18, and a J.Crew men’s shop in The Grove in Los Angeles on Nov. 21, bringing the total to nine men’s units. J.Crew men’s wear, Drexler said, has become “quite well known as a strong franchise. Our Ludlow suit business is a business unto itself, as is our shirt business.” Ludlow is a J.Crew label.

With the rollout of men’s stores, “We are ramping up, only selectively,” Drexler said. “We are not running fast. We are running strategically and appropriately….I don’t think men have had a great choice in the last number of years to buy high quality at prices that are reasonable.”

Overall at the company, “We intensified our product offerings from a creative point of view,” Drexler said. “I would characterize the J.Crew product and merchandising as standing out in the marketplace. People voted with their pocketbooks, but we worked hard at it, and we continue to innovate and create every day….A lot of designers sell primarily accessories. We are in the apparel and accessory business.”

Drexler said that the brand’s pricing below designer and the fact that J.Crew is not sold at discount in channels other than its own “long-term builds loyalty into the customer base.” He also said not being a business that designs products flaunting the logo enhances the appeal. “We maintain the friendliness of the brand.”

Drexler also said that certain categories were identified for intensification this year, though he declined to specify, and also stressed the marketing efforts, including reformulating the catalogue, were intensified as well.

Regarding the Madewell brand, Drexler said, “We are expanding it both storewise and onlinewise. We’re very excited. We’re launching our fourth catalogue in September.”

Great news for our favorite retailer! I have to say, I am surprised menswear increased at a higher rate than women. (Although I bet, the actual figure still shows women outspending men at J.Crew.) ;)

I also have to agree with Mickey about not flaunting the label. When I was younger I did not mind having the label of the clothing company visible. However, not so much anymore.

Lastly, I am not sure why Madewell does not keep up with a catalog. Seems like they could at least be rolling one out every season. Just a thought...

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