The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
NEW YORK, United States — J. Crew Group Inc. Chief Executive Officer Mickey Drexler thought about jumping into the athletic trend in apparel and decided to sit it out.
Drexler said the company considered making sports and yoga clothing, similar to gear made popular by Under Armour Inc. and Lululemon Athletica Inc. The clothing, which is increasingly being worn by Americans more on the street than in the gym, is propelling sales for some retailers with others rushing to add workout clothing to their stores.
“Where we thought about being in was the active, professional kind of business, but we’re not getting in because we don’t have the expertise to do that,” Drexler said in an interview with Bloomberg Television today. “We’re pretty satisfied with the breadth of our product, and now it’s about correct expansion, correct design and quality.”
With shoppers gravitating toward sweatpants and sneakers over jeans and brown shoes, the decision could represent a missed opportunity for J. Crew, considering trends in the broader industry. While total U.S. apparel sales rose 1 percent in the 12 months ended in June, activewear increased 7 percent, according to market research firm NPD Group Inc. Companies have taken notice, with chains ranging from Macy’s Inc. to Urban Outfitters Inc. working to expand their athletic assortments.
ADVERTISEMENT
J. Crew, known for more pricey basics, had to use promotions to clear seasonal inventory last quarter, hurting profit margins. While sales at stores open at least a year and online rose 4.4 percent last quarter from the same period a year earlier, gross margins slipped to 37.7 percent from 41.1 percent, J. Crew said in a Sept. 4 filing.
Challenging Time
This squeeze comes at a challenging time for the industry that’s facing competition from fast-fashion and online-only players. Mall traffic declined 3.1 percent in September from a year earlier, according to researcher ShopperTrak. Drexler said he’s noticed fewer people in malls in the past year, with those who do shop in stores hunting for the lowest prices. To reverse the trend of falling foot traffic, malls need to be more exciting, he said.
“We don’t have too many stores, so I’m pretty happy, but it is a challenge,” Drexler said. “The mall needs to be more compelling and exciting. Where is it different in product?”
Since Jan. 29, 2011, a few months before private-equity firms TPG Capital and Leonard Green & Partners LP took the retailer private, J. Crew has opened 134 stores as of Aug. 2, many located in malls.
By: Lindsey Rupp; Editors: Nick Turner, James Callan and Kevin Orland
From analysis of the global fashion and beauty industries to career and personal advice, BoF’s founder and CEO, Imran Amed, will be answering your questions on Sunday, February 18, 2024 during London Fashion Week.
The State of Fashion 2024 breaks down the 10 themes that will define the industry in the year ahead.
Imran Amed reviews the most important fashion stories of the year and shares his predictions on what this means for the industry in 2024.
After three days of inspiring talks, guests closed out BoF’s gathering for big thinkers with a black tie gala followed by an intimate performance from Rita Ora — guest starring Billy Porter.