J. Crew bleeds in Q3; ups store closings
Even a strong performance by Madewell couldn’t save J. Crew Group in its third quarter as the retailer’s ailing flagship brand continues to drag down the company.
J. Crew’s total revenues decreased 5% to $566.7 million in the quarter ended Oct. 28. Sales plummeted 12% at J.Crew, while sales at Madewell jumped 22% to $107.5 million.
Total same-store sales fell 9% following a decrease of 8% in the year-ago period. Same-store sales fell 12% at J. Crew and rose 13% at Madewell.
The company reported a net loss of $17.6 for the quarter, compared to $7.9 million in the year-ago period. This year’s quarter includes the impact of transformation and transaction costs, the company said.
J. Crew now expects to close 50 stores this year, up from a previous forecast of 30.
“Our goal is to reinvigorate the J.Crew Brand to reflect the America of today and to continue to drive strong momentum in the Madewell Brand,” stated Jim Brett, CEO, who stepped in the top role earlier this year. “During the third quarter of fiscal 2017, we drove gross margin expansion and reduced SG&A by delivering on our expense initiatives. As we solidify longer term strategies, we will continue to leverage our strong brand equity and unique capabilities to expand our reach, accelerate growth and maximize profitability.”
As of November 21, 2017, the company operates 269 J.Crew retail stores, 121 Madewell stores, jcrew.com, jcrewfactory.com, the J.Crew catalog, madewell.com, and 182 factory stores (including 42 J.Crew Mercantile stores).
Re: "Our goal is to reinvigorate the J.Crew Brand to reflect the America of today" Problem is the chameleon nature of that statement. That statement coming from a brand which consumers can longer define. Are you career wear? family everyday clothes? for athletes? bridal? tech geeks? "Reflecting" consumers (culture, geo, lifestyle) is a great add on, but the USP of J.Crew is very unclear to consumers... what does the brand do for consumers that no one else does? How is J.Crew different than Gap? What does J.Crew offer in their store that enriches a person's life? Hint: there are ALREADY too many stores for the "America of today." J.Crew can never be a "wow" store if they are only thinking "today." Apple, Amazon, Google, etc all think of today as history; build a brand with a future... and with a USP (unique selling proposition).