NEW YORK, United States — The J.Crew Group (which includes J.Crew the brand and Madewell) has announced a series of organisational changes on Tuesday that will “move us forward in a more efficient and dynamic way,” said chairman and chief executive Millard "Mickey" Drexler in a statement.
In order to streamline the troubled business — whose debt totalled $1.5 billion, net of discount and deferred financing costs, at the end of last year — the company plans to cut 150 full-time jobs and 100 open positions, primarily from corporate roles.
BoF has learned that Frank Muytjens, head of menswear design at J. Crew, is among those leaving the company. (A representative for J.Crew confirmed the departure.) The news follows the announcement in early April of J.Crew’s president and creative director Jenna Lyons' imminent departure. J.Crew women’s head of design Somsack Sikhounmuong was promoted to chief design officer, overseeing the women’s, men’s and children's design teams. Lyons will stay on as a creative advisor until the end of her current contract, which expires in December 2017.
“We are streamlining our teams as we evolve our business and processes to cater to the new demands of the retail industry,” said Drexler. “While challenging, we know what needs to be done and this is a critical step to position J.Crew for the future. We are committed to treating impacted associates with respect and support through this period of change.”
The employment cuts will impact corporate teams evenly as the group streamlines to become more digitally focused. Only a handful of jobs were eliminated in distribution centres. The cuts should result in pre-tax savings of $30 million, but cost $10 million in the first quarter of fiscal 2017 in severance payments and other termination costs.
The J.Crew Group also announced several changes on its executive team. The group’s president, chief operating officer and chief financial officer Michael J. Nicholson will also lead J.Crew, the brand, and continue to report to Drexler. Madewell’s senior vice president of merchandising operation Lisa Greenwald has been named chief merchandising officer of J.Crew, the brand. She will also report to Nicholson.
Over at Madewell, Libby Wadle has been named president. She most previously served as president of J.Crew, the brand.
“We have an incredibly talented team of passionate leaders and will further leverage their strengths and talents as we continue to focus on making critical improvements in our business,” said Drexler.
The announcement is likely the first of several as J.Crew enters a new chapter without Lyons and in an increasing challenging retail environment weighed by promotion-seeking shoppers. Net sales at J.Crew were $2 billion in year ending, down 6 percent from the previous year. Sales at stores open at least one year were down 8 percent.
Madewell continues to be a bright spot, which saw net sales in 2016 increase 14 percent to $341.6 million, with comparable sales up 5 percent.