Amid a period of turmoil at J. Crew, brand Madewell is the company’s shining star. And in a sign of its skyrocketing growth, Madewell has named its first-ever chief executive. Brand president Libby Wadle is taking on the CEO role as Madewell tracks toward becoming a billion-dollar brand, Madewell told Fortune.
“The complexity of the business is changing,” Wadle says. “It’s a pivotal point for us in terms of growth.”
Madewell opened its first store in 2006 after incubating within J. Crew; Wadle was on the Madewell team from the beginning, although she’s spent some time on the J. Crew side since then. In the past half-decade—and especially the past two years—Madewell, known namely for its denim, has seen growth surge, Wadle says.
Madewell reached over $500 million in total revenue in 2018. “We are more than halfway there,” Wadle says of the path to the billion-dollar mark. That milestone arrived as J. Crew saw executive turnover, near-constant 40%- and 50%-off sales (compared to Madewell’s full-price denim bar) and growing worries about its debt.
The relationship is one some might compare to the brands under the Gap Inc. umbrella. Gap recently announced it would spin off Old Navy—founded by none other than longtime J. Crew executive Mickey Drexler—into a standalone company. Madewell, however, isn’t anywhere close to Old Navy’s $8 billion a year in revenue—it’s actually closer in size to Gap’s Athleta brand—but it’s clear that both Madewell and Old Navy are navigating the brutal retail market while their companies’ flagship brands flounder.
Even with the loose parallels, Wadle says she’s laser-focused on Madewell. She talked to Fortune about her new CEO job and the big question: what is Madewell doing right?
Fortune: What’s changing about the scope of your job as you move from president to CEO?
Wadle: As the Madewell business is really growing, we have our eyes set on becoming a billion-dollar brand in short order. The complexity of the business is changing. I incubated the brand, and after being part of the growing pains and the phases of growth, it’s exciting, this new chapter. It’s a pivotal point for us in terms of growth.
Denim is really at the core of everything we do. Building on becoming a bigger denim brand, that’s really getting more people into our jeans. As you grow the business, you need to grow your customer base. The complexity is really based in trying to keep laser-focused on the things that we want to be focused on, which are denim and community, and shutting out the distraction and the noise that can happen as you start to grow into a bigger brand.
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You say you have your eyes set on becoming a billion-dollar brand. Where is Madewell is on that path right now?
We are more than halfway there. It’s really over the course of the past five years, and then especially the past two years, that we’ve seen really strong growth.
Around five years ago, we really put a stake in the ground around our value preposition, which is offering premium quality jeans at a non-premium price. It was a real white space in the market. And that’s when our business really started to pivot. We always say, ‘We’re about denim and everything she wants to wear with jeans,’ which is a great focus because there are a lot of ways to wear jeans and denim, so we’ve been able to build our product assortment around that.
What is Madewell doing right? What is keeping the Madewell brand strong while there have been challenges over at J. Crew?
We’re very excited about our growth and we’re excited about just continuing to build that denim business. That really is our focus. It’s very tempting to be distracted by other opportunities as you’re growing. It’s more important to stay focused on the things that you’re doing well and building them.
[At] Madewell, we’re on a very individual path of growth right now. We’re focused on that billion-dollar goal we have and we’re really driven to get there.
How does the situation at the top of J. Crew affect your day-to-day right now? When you’re headed into work, is that altering what’s on your plate?
I’m honestly mildly obsessed with focusing on Madewell at all times. I’m super focused on that growth. We have aggressive plans for ourselves. I think everyone benefits from my leadership reflecting that focus and not getting distracted.
You becoming CEO—is that a move towards independence for Madewell? Is that a sign that maybe Madewell could be spun off at some point in the future?
We’re part of the group, we’re part of the whole. The business is becoming bigger. We just need to make sure that we have leadership that’s really laser focused on those goals and plans.
It’s been a big month for denim with Levi’s re-entering the public market. What’s your current take on the state of competition in denim?
Denim is a big business. As long as we continue to focus on getting our fit and our fabric and our technology right, we’ll be great and do well and continue to see growth.
Our healthiest business has been in denim. When you are in the pants business or the jeans business, you get your most loyal customer when you sell them a pair of jeans. Because they trust that the fit is right, they trust what they’re going to buy next will fit well.
What about your leadership strategy changes now that you’re CEO?
I have a pretty collaborative leadership style. And that doesn’t mean that there’s no accountability. We have a lot of accountability and a very collaborative spirit. We don’t have a very siloed approach at all to the business. We love bouncing ideas off of each other, and at the end of the day, I am accountable and on the hook, but I really, really believe in having a very, very strong team of people who love to be part of that collaborative approach to running the business.
How are you thinking about store selection right now? Are malls still a major part of Madewell’s strategy, and how does that fit in with your online business?
We don’t necessarily look at real estate like malls, we just look at where people want to go shopping. And there’s a lot of interesting things happening in the retail space today. A lot of landlords are doing great things around creating lifestyle centers that have multi-use features. You can go get great jeans, you can also work out, you can grab a cup of coffee.
On that path toward becoming a billion dollar brand, what does Madewell need to do to make it to that point, to build up the back half of that growth?
We need to build our community of customers. Building our customer base is obviously a hugely important part of building the brand and getting to that milestone of a billion dollars. Building our denim business is a crucial piece of that. I know it sounds like really beating that drum. But I am really beating that drum because it is the most important piece of our business.
This interview has been edited and condensed.
