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., trying to bounce back from years of sluggish sales, is increasingly looking to its Madewell chain to carry the burden.
Though overall revenue increased just 2 percent last quarter, it jumped 32 percent at Madewell, the company said on Tuesday. Chief Executive Officer Jim Brett announced plans to make strategic investments into the division that should earn “highly profitable returns.”
Madewell, a seller of clothing and accessories for women, has become a bright spot at J. Crew by appealing to millennials. It remains a small part of the company, but a faster growth strategy could put it front and center of a potential turnaround.
“We will scale Madewell more rapidly, building upon its proven and consistent record of growth,” Brett said in a statement.
Brett took the helm at J. Crew last year and set about trying to reinvent a chain that had lost relevance with shoppers. The veteran of Williams-Sonoma Inc. assumed the job after long-time leader Mickey Drexler stepped aside.
J. Crew has been striving to recover from an industrywide drop in brick-and-mortar traffic. It's also laboring under a debt load from a leveraged buyout by TPG and Leonard Green & Partners LP in 2011. Making matters worse, it largely missed out on a shift to more sporty apparel that helped bolster sales at chains like Old Navy.
Madewell is now helping restore some of that mojo.
A key profit measure also showed signs of improvement in the fourth quarter. Adjusted earnings before interest, taxes, depreciation and amortization rose 25 percent to $64.6 million, J. Crew said.
Same-store sales declined 3 percent in the period, which ended Feb. 3. But that was a less severe drop than the 5 percent decrease J. Crew posted in the year-earlier period.
With a Super Bowl ad and a social marketing blitz, the Chinese-owned e-commerce platform has quickly built a big fast fashion business in the US. Analysts say its business model points to eventually competing against Amazon and TikTok.
Nike and On report results this week, and will likely take a more upbeat view of the sneaker market than their rivals. That, plus what else to watch for this week.
Start-ups that banked with the failed lender still have their money after regulators stepped in, but the crisis will change how brands approach their finances going forward.
Mango is returning to the United States — after two previous attempts failed — offering higher-priced clothes meant for special occasions and parties. It will target states where online sales are already strong.