J.Crew to Close 50 Stores As Sales Plunge Again
There is apparently no end in sight to the deterioration of the J.Crew brand.
Same-store sales plummeted 12% at J.Crew’s namesake brand in the third quarter and the parent company said on Tuesday it expected to close 50 stores this year, up from a forecast of 30 just three months ago. But such is the tailspin its sales are in.
Business at sister chain Madewell, was brisk, with comparable sales up 13%, but the brand is too small in relation to J.Crew to mitigate the flagship brand’s deepening woes. J. Crew Group as a whole said comparable sales fell 9%, a result likely to extend the turmoil the brand has found itself in for the last two years.
The results are all the more distressing given that some of its apparel-chain rivals are showing improvements in their business. Gap Inc’s (GPS) namesake brand last week reported its first quarter of comparable sales gains, breaking a 14-quarter streak without growth. Abercrombie & Fitch last week said comparable sales, including those for Hollister, rose 4% last quarter.
But at J.Crew brand, shoppers remain AWOL. The chain has been trying to carve out a new space for itself in shoppers’ intentions, hurt by years of fashion misfires, uneven quality, and what many consumers perceived as overly high prices. The steep sales decline is a major setback for Chief Executive Officer James Brett, the former Williams-Sonoma (ASM) executive who earlier this year replaced iconic leader Mickey Drexler. This year alone saw the departures of lead designer Somsack Sikhounmuong, and creative director Jenna Lyons, the latter staying on as an advisor through the end of 2017.
What’s more, J.Crew has had to contend with pressure from fast fashion chains like H&M and Zara, and overall consumer boredom with all the choices of fashion options. J.Crew hurt itself by confusing shoppers by oscillating between affordable yet preppy clothes and higher end items. J.Crew’s private equity owners, TPG Capital and Leonard Green & Partners, took a $1 billion write-down in two years ago because of the faltering of the brand.