default-output-block.skip-main
BoF Logo

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.

The Challenging, Emotional Remaking of J.Crew

Over the past 15 months, chief executive Jim Brett has lowered prices, added labels, expanded sizes and tried to move beyond the polarising legacy of the brand’s recent past. Will his master plan work?
J.Crew Fall 2018 | Photo: Courtesy
By
  • Lauren Sherman

NEW YORK, United States — Jim Brett, chief executive of J.Crew since June 2017, doesn't care for "monobrands," or labels that can be defined by a singular point of view. When he made the decision to jump from the helm of American furniture retailer West Elm to J.Crew, he saw an opportunity to turn a brand ultimately defined by one vision into something, well, for everyone.

“Here's this iconic American brand that could have a real voice about what it means to be American…. [and] I didn't feel like it was reflecting America,” he said in a wide-ranging interview where he outlined his plans to remake the ailing brand. “It was reflecting a singular style point of view which to me represents, you know, the old way of specialty retail.”
The challenge, of course, is that the once-hot J.Crew is still the ultimate monobrand, and it has the battle scars to show for it. In the late 1980s, J.Crew emerged as a collegiate catalogue brand rooted in New England preppy culture. Later, in the 2000s, under the watch of former chief executive (and current chairman) Millard “Mickey” Drexler and chief creative officer Jenna Lyons, those preppy tropes were twisted into what can only be called a cultural phenomenon, with a fandom that included then-First Lady Michelle Obama, the Duchess of Cambridge, Kate Middleton, and actress Lena Dunham.
However, at one point, e-commerce, social media and all the choice that came with it destroyed the ability for brands like J.Crew to dictate mass tastes.  Sales began to slide in 2015 and, by 2017, the company was negotiating with creditors to push back the maturity of $566.5 million in debt by three years to 2021.
“Over the last 10 years, we’ve seen a shift where brands were once the ones dictating style to where shoppers and customers are dictating style,” said Tiffany Hogan, an analyst at Kantar Consulting. “J.Crew just kept going like they were the dictators of style.”
In a fragmented retail landscape, it makes sense that, in some ways, Brett is fragmenting J.Crew.
For the past 15 months, Brett has been making incremental tweaks — all predicated on the idea that if J.Crew’s essence is preppy American style, then preppy American style needs to be defined as broadly as possible. J.Crew is set to relaunch on September 10, complete with a new marketing campaign powered by the hashtag #meetmycrew and engineered to reflect “great examples of unity in diversity,” according to Brett.
The new J.Crew still sells the famous No. 2 pencil skirt. But Brett is adding significantly more sizing and new product categories (home goods are on the horizon). He’s also lowering prices by a noticeable amount, and bringing clothes from the group’s fast-growing, hipster-French-girl-chic label Madewell — as well as J.Crew’s outlet shops — into the main brand’s stores. (This fall, Madewell will also expand into menswear.) 
It’s a lot. And there’s more to come, including the relaunch of the print catalogue, which published its last issue at the end of 2017.

Initial results, also driven by cost-cutting measures and promotions, look promising. On Tuesday, J.Crew Group reported same-store sales rose 1 percent from a year earlier, after 15 straight quarters in decline. Star performer Madewell, which drives about a fifth of sales, saw comps jump 28 percent. Total sales at the company were $588 million, up 3 percent from the same quarter in 2017. The company still experienced a net loss of $6 million, compared to a $19 million loss during the same period last year. 

The question now is whether Brett can sustain this early momentum without destroying the essence of the brand that drew shoppers in the first place. The chain has fewer customers than it once did, but many remain fiercely loyal to the J.Crew look.

And about that old idea of one J.Crew for all?
“We don't need to choose,” he said.  Really, he believes, that women just want to look pretty. He loves that word.
“It's not like we're taking J.Crew and making it into something completely different. We're acknowledging that it's not just the preppy ‘80s. It's not just the high fashion. You have to honour the heritage of what J.Crew has been throughout several decades and I think that we've done that to the best of our ability.”
Among Brett’s most difficult tasks is making a clean break from J.Crew’s glory days. When he joined J.Crew in 2003, Drexler, a merchant prince and former Gap chief executive whose influence on American clothing culture is rivalled only by that of L Brands chief executive Les Wexner, famously plucked longtime J.Crew designer Jenna Lyons from the sidelines because he liked her style. He offered her complete creative control over the brand’s narrative, which developed into a more modern, fashion-charged exploration of preppy exuberance.
Lyons’ J.Crew, with her blown-up bubble necklaces and flashy sequins, winked at you: it was playful, sharp and distinctive. A new group of consumers became high school crush-level crazy about J.Crew. When the company went public in 2006, it was generating $924 million a year in sales. By 2014, the last year it posted growth, annual sales were $2.6 billion.

During the Drexler-Lyons years, J.Crew became a fashion brand: it didn't simply tap the zeitgeist, it was the zeitgeist. But the move eventually alienated many longtime customers who expected the straight preppy from years past. Meanwhile, fashion's love affair with Lyons' unwavering vision inevitably faded. Drexler was unable to fend off problems with pricing (too high) and discounting (too frequent).

Overall, we are not looking for harsh, edgy looks. We're looking for beautiful, feminine imagery and accessibility.

Of course, it was inevitable that J.Crew would one day lose its magic. “Those kinds of emotional moments are so difficult to create in fashion and even more difficult to recreate again,” said Moody’s analyst Raya Sokolyanska. “And they are more fleeting today; harder to maintain. Fashion brand’s moments don’t last as long as they used to.”
Lyons departed in May 2017, just before Brett’s arrival in June of that year. In a July 2017 email to senior executives obtained by BoF, Brett was unflinching in his analysis of what J.Crew once was, and what it should become. Gone is the high-low, tomboy-sprinkled-with-stardust mix: the emphasis now is on styling and visual merchandising that is “feminine and pretty,” which “always sells.”
“A glen plaid jacket with a graphic tee and camouflage pants is anything BUT pretty,” read the email. “The new feminist fashion movement is enjoying the POWER of femininity (see latest Dior shows) vs. the last feminist movement which was about women finding power in dressing like men. Femininity is critical — pretty is critical — femininity is powerful.”
When asked about the exchange, Brett said that he has been pushing the styling away from J.Crew’s former concept. “We shot everything on size double zero people that all looked exactly alike and so yeah, I was saying that diversity means not going with this one way of styling things,” he explained. “Overall, we are not looking for harsh, edgy looks. We're looking for beautiful, feminine imagery and accessibility.”
Brett comes from the school of Urban Outfitters, Inc., where brands are built on designing for a set of archetypes — the sophisticated flower child, the freewheeling nomad, the teen hipster — rather than a seasonal feeling. When Brett, an apparel merchandiser, joined Anthropologie in 2003, then-president Glen Senk put him in charge of developing the brand’s home range. (Much like Herman Miller is to midcentury modernism or Rachel Ashwell is to shabby chic, Anthropologie became interchangeable with eclectic bohemianism.) In 2007, he was promoted to chief merchandising officer of Urban Outfitters, where he developed the brand’s private-label collections to better compete with fast-rising fast-fashion competitors.
At J. Crew, Brett immediately did away with seasonally inspired collections. Instead, the team now designs into what he calls “ingredients,” or “buckets.”  Like he did at Urban Outfitters, Brett has started to tease out J.Crew’s sub-brands. For instance, Point Sur, once a high-end denim line that floated in and out of the J.Crew lineup, is now a fully-fledged collection that caters to the bohemian archetype, which Brett believes was being underserved.
“There would be a couple of bohemian products mixed in with this preppy line under the preppy label of J.Crew, and they looked out of place — they never had a full, rounded-out expression to them,” he said. “So, we created another label.”
Wallace & Barnes, a sub-brand on the men’s side, is being further developed, while Mercantile — once a concept that lived in the “Factory” outlets  — is now being introduced into mainline stores as a value play. There is also the rebranded and reimagined denim line — “/Jean” — which recently hit stores. And Madewell, the other major brand in the J.Crew family, is now sold in select J.Crew stores.
“J.Crew is doing a bit more listening to the shopper by diversifying styles, not just having a one-beat look,” Hogan said.
There are dozens of other ways Brett is reshaping J.Crew. This year, he introduced a marketplace that lives under the “In Good Company” moniker — originally conceived years ago as a collaboration vehicle — where indie brands can sell their own inventory through jcrew.com and fulfill their own orders. For instance, size-inclusive brand Universal Standard sells its main collection on the J.Crew marketplace and also recently collaborated with J.Crew on a special collection.

There's also J.Crew's new customer loyalty programme, which launched in early August, and a Stitch Fix-like service called Stylegraph, where customers will be virtually paired with retail associates to help choose items. An international expansion — primarily fueled by wholesale at retailers like John Lewis, Hudson's Bay Company and ASOS — is set to become a larger part of the overall business.  

One aspect of the old J.Crew that Brett is keeping: promotions. Unlike many competitors, who have reduced discounting, Brett said that J.Crew will continue with its current approach at least through the end of the year.

“This is all going to take time,” he said. “Our margins are actually pretty incredible right now and expanding. So, you know you'll see us be promotional for a while longer. It's part of the plan.” In the second quarter, J.Crew’s gross margins were 38.5 percent, up from 38.2 percent the same period last year.
And yes, the company has lowered its prices while maintaining margins through several cost cutting measures. For instance, when it comes to fabric, the company is shifting from an agency model — where a middleman sources and buys from mills — to a direct model, which reduces costs on high-quality materials. But while it will still continue to source wool from esteemed mills like Tollegno, some of the high-end fabrics J.Crew has become known for will be phased out altogether, like Loro Piana cashmere.

Fashionable and beautiful are different words than trendy. And that's the distinction.

The divorce from Loro Piana — a mill from which it so proudly sourced, even using it as a marketing talking point — might suggest that price trumps quality.
Brett said that’s not the case. “If you look at the traditional retail model of ‘good, better, best,’ J.Crew was better and then had this price point of really almost luxury. Some of the Collection things were literally Gucci prices,” he said. “So that layer is gone.”
Many analysts support the maneuver. “It’s not bad to dabble in the luxury sphere, but it indicates that J.Crew is no longer trying to overstretch,” Hogan said.
But of course, it won’t be that easy. Brett’s sensible strategy will continue to come up against the sometimes insensible nature of consumer desire.
“There were a number of things that J.Crew needed to do that they have certainly been able to address when it comes to cost-cutting and efficiency,” said Wendy Liebmann, founder of WSL Strategic Retail. “The bigger challenge for them longer term is: are they relevant, are they different?”
There are other ways J.Crew is moving away from a fashion-driven model, some of which have ruffled feathers within the organisation. Designers have been encouraged to rely more on three-dimensional Computer Aided Design (CAD) files rather than sketching things out. This may seem like a small change, but for some J.Crew lifers — those who had been working at the company for 15, 20 years — it cut deep.
As with any major transition, Brett’s arrival and some of the changes he has put in place have resulted in turnover and dented morale. Somsack Sikhounmuong, a 16-year veteran of the company who replaced Jenna Lyons as chief design officer after her departure in May 2017, exited the company in September 2017. Johanna Uurasjarvi, who worked with Brett at West Elm and was creative director at Anthropologie, replaced him in June 2018.
“Culturally, when I first started and talked about what we were going to do, people were uneasy,” he said. “And then as we did it, I'd say they were still uneasy... but a little less uneasy.”
What Brett doesn’t want people to think, however, is that there won’t be fashion. “We have beautiful fashion product, but it's designed not to be weird or trendy, meaning it's beautiful and it's designed to last,” he said. “Fashionable and beautiful are different words than trendy. And that's the distinction.”
Will Brett’s vision, powered by Uurasjarvi, be enough to redefine J.Crew in the eyes of the consumer? It’ll depend on how far pretty — and all its layered meanings — can take them.  

Related Articles:

© 2021 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.
CONNECT WITH US ON
Voices2021
© 2021 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions and Privacy policy.
Voices2021