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.
When Jan Singer started her job as chief executive of the J.Crew Group in February, one of her predecessors gave her a piece of advice. “I told Jan … ‘edit ugly,’” said Millard “Mickey” Drexler, who transformed Gap and J.Crew into cultural phenomena with sales to match, on a podcast in April. “Throw out everything that will turn off the customer.”
Singer, who declined to comment for this story through a representative, had reason to listen to Drexler, even if he left J.Crew in a bruised state when he stepped down from his chief executive role in 2017. After all, he had recommended her for the job.
However, recapturing the magic of the Drexler boom years is not necessarily part of the agenda. Instead, Singer wants to regain the cultural capital J.Crew possessed before Drexler and his creative partner, Jenna Lyons, transformed the American-prep mainstay into a fashion label that, for a short while, had as much heat as any European luxury brand.
J.Crew would once again be known for quality, elevated basics: the best T-shirt, the perfect pencil skirt, that ultra-warm “stadium” coat. Lyons was in creative control when some of these brand icons were established, but she is better remembered for her singular personal style and the hordes of shoppers that attempted to emulate it. For inspiration, Singer is said to often reference another J.Crew heyday: late-1990s, early-2000s collegiate New England.
“J.Crew has been in my life my whole life,” Singer, who was born and raised in Brockton, Massachusetts, said on a recent Politico podcast. The look was captured best in J.Crew’s then-popular catalogues: ice-blond 20-somethings with ski-slope flushed cheeks wearing fuzzy cashmere turtlenecks; boys in rugby shirts...playing rugby.
She began to communicate this back-to-basics approach to her colleagues.
“The thing that makes J.Crew great, when we were really on our game, is being very committed to key defining items,” she told Politico. “When I got this job, I got [texts] around, ‘I’m a Tipi sweater girl, I’m a Pixi pant wearer…’ Putting those front and centre as classic, iconic objects of desire is everything. People right now want to trust that things fit, that they have quality, and they’re consistent.”
Redefining J.Crew was a herculean task, no matter the circumstances. The retailer was weighed down by a mountain of debt after a failed turnaround, and the CEO job had been vacant for over a year before Singer accepted it. Then, not a month into her tenure, came the pandemic, and with it Chapter 11 bankruptcy protection, a debt restructuring, and a whole new set of challenges. Whatever plan Singer had in the works was put on hold while she managed the crisis.
But now, as the company emerges from bankruptcy in a better financial position, questions remain. Does Singer have the right vision for J.Crew? Can she execute? What happens to sister-brand Madewell, which was gearing up for an initial public offering last year? And how long will the new owners, which have faced their own controversy in recent weeks, be willing to wait for a turnaround to take shape?
The Not-So-Easy Search For a CEO
Singer was not J.Crew’s first choice to lead the company. When then-chief executive Drexler was planning to retire in 2017, the board hired Jim Brett, who had most recently led home goods store West Elm. It was not the succession plan Drexler wanted.
Brett attempted to transform the business from an emotionally charged fashion label into a cold, practical collection of products. It was a strategy that worked for his previous employer, Urban Outfitters, but proved a poor fit at J.Crew. Employees defected, and Brett clashed with Drexler, who had stayed on as board chairman and still owned 10 percent of the company at the time. While many of Brett’s ideas were sound, he tried to do too many things at once, lacking the sensitivity to understand that the consumer would not so easily be swayed. His plans were also expensive for a company that had been loaded up with debt over the years.
Brett was ousted in November 2018. This time the board wanted Drexler’s advice. But J.Crew wasn’t an easy sell: Stefan Larsson, a veteran of Ralph Lauren, H&M and Old Navy, was interested, but concerns that the retailer’s billions of dollars in debt would limit the resources available to engineer a turnaround made it hard to recruit him and others. (He is now president of PVH.) In the end, Singer, who most recently had run Victoria’s Secret’s lingerie division for about three years after a short stint as chief executive of shapewear label Spanx, was the leading candidate. She had the approval of Drexler, whom she had gotten to know over the years: and she was interested.
“I’ve tracked this business and been a part of it my whole life. I’ve known the former leaders,” Singer told Politico. “I knew about J.Crew and knew about the situation and made it my business...to really understand what the financial implications were…what the paths forward were…to be able to take a calculated risk on this role.”
In some ways, Singer was a model candidate to lead J.Crew. As one of the few female executives to reach the c-suite in apparel retail, her background included leading a $4 billion lingerie business and running the biggest division at the world’s largest sports brand — Nike — where she worked for a decade.
But Singer had never been given free rein over a retailer before. At Nike, she wasn’t directly responsible for marketing. And at L Brands, the brand CEOs were often simply there to keep the trains running on time: strategic decisions were made by group chief executive Les Wexner and his core advisors.
Singer was good at crafting a narrative. At Spanx, where she worked closely with founder Sara Blakely, coworkers said her idea was to take the department-store label from innerwear to outerwear. At Victoria’s Secret, the idea was to move away from a shopping experience comfortable for a man, and designs made to attract a man — to building a brand centred on female empowerment. At both companies, she was blocked by an existing infrastructure that limited her ability to implement her vision.
At J.Crew, Singer’s initial narrative was, in some ways, to look backward. Collections would be streamlined, with a goal to win back once-loyal customers who were turned off by the fashion-forward direction the line took at the end of Lyons' tenure.
To regain momentum, her first change would have to be in design. After Brett’s exit, the company hired designer Chris Benz, whose first job out of university was working at J.Crew before he started his own namesake ready-to-wear line. Benz was known in high fashion for his charmingly outrageous sense of colour and dazzling personality. After his label closed, he took on a job at Bill Blass, owned by men’s shirtmaker Peacock International Holdings, mostly designing shoes.
When Brett’s creative director, Johanna Uurasjarvi, was shown the door, Benz immediately worked his connections there, winning over, according to people with knowledge of the situation, chief merchant Lisa Greenwald, who believed Benz could move the brand forward. She and human resources head Lynda Markoe — who has since left for the homeware retailer Bed, Bath & Beyond — were said to believe that J.Crew needed to have a fashion point of view and cater to a younger consumer in order to grow and develop. Despite Benz’s lack of experience at such a large business, his proposal was seen by his proponents as energetic and fun.
Drexler didn’t agree. He had kept in loose touch over the years with Benz, as he did with many of J.Crew’s ex-designers, but advised the company not to hire him to the top design role, according to people with knowledge of the situation. He instead advocated for Olympia Gayot, an ex-J.Crew designer who was working at Victoria’s Secret at the time. Gayot — who is known for her straightforward design sensibility — and Singer did not overlap at L Brands.
So when Singer joined the business in February, “getting rid of the ugly” could be construed as coded language for getting rid of Benz, whose first full collection was about to hit stores. In sessions where Benz would walk Singer through a new collection, it was clear to employees that Singer felt that the lines were “all over the place,” and that she wanted to focus on items that were proven hits, according to people who witnessed the interactions.
A New Start
In May, the company filed for Chapter 11 bankruptcy protection, converting approximately $1.65 billion of its debt — accrued from leveraged buyouts — into equity. New York-based hedge fund Anchorage Capital Partners loaned J.Crew $400 million and helped it secure a credit line of an additional $400 million in exchange for control of the company. During bankruptcy protection, the group renegotiated several real estate deals and was able to exit the process in August.
While Singer hasn’t brought in a string of her own people to populate the team, she did take the opportunity to restructure, cutting jobs in several departments and most notably let go of Benz, replacing him with Gayot, Drexler’s choice. While he hadn’t been involved with the company for two years and was now running a competing business with his son Alex Drexler and former J.Crew designer Somsack Sikhounmuong, his shadow was long, and Singer valued his advice.
But her plan beyond hiring Gayot remains unclear to several people who have worked closely with her during this time, as well as others who have less interaction with her day-to-day. Current and former employees describe Singer as friendly and positive but said they are still confused about the future of the brand. Some question whether relying on an old formula — especially one that draws so heavily on a mostly white, preppy culture — is really the way to go in the midst of a racial reckoning.
Retail analysts, too, have yet to see any positive developments on the sales floor, where the product mix hasn’t changed much since Singer’s arrival.
“J.Crew has to rebuild in terms of casual wear, not career wear,” said analyst Jane Hali. “They’re really known for both, but I have to say that I was just in the store recently and they haven’t pulled their act together yet.”
It will take at least a year, if not more, to see Gayot’s imprint on the collections, as retailers like J.Crew design 18 months ahead. The company’s menswear business is also in crisis, having not evolved since its late-aughts heyday, and currently without a head designer.
Singer had professed an interest in hiring Abercrombie & Fitch’s Aaron Levine, according to two people, but it’s an unlikely pairing, given that the creative director currently runs both the men’s and women’s groups at the Columbus-based retailer.
“A lot of what she was coming in and saying about streamlining collections and homing in on the brand resonated with a lot of people,” said one former employee, who was laid off during the late-summer restructuring. “But most are resigned. The company is not in a good place and we don’t know what will bring it back.”
The Madewell Factor
For the last few years, the bright spot at J.Crew Group has been denim-heavy Madewell, first incubated by Drexler in the mid-2000s. Appealing to young women besotted by the casual French-girl cool that was washing over the culture at large — in the same vein as French contemporary brands like Sandro and Sezanne, a Madewell collaborator — it took off in the 2010s.
The just-right denim silhouettes, chunky sweaters and dusty colour palette were irresistible, and by the fall of 2019 when Madewell filed for an initial public offering — a spin off that would have helped the group pay down its mounting debt load — it was on track to generate over $600 million a year in sales, with positive comparative sales growth in 41 out of 42 quarters. The J.Crew board had entertained selling Madwell to another group — Levi’s is one that looked at it — but was advised it could get a valuation 20 to 30 percent higher on the public market. (Levi’s, according to two people familiar with the negations, had proposed $2 billion. A Levi’s representative did not respond to a request for comment.)
Although many analysts believe Madewell has plenty of room to expand — especially in physical retail, as over half of its sales are generated online — it stopped growing as quickly in 2019 as its menswear launch flopped and the product began to feel stale.
“Denim is a very competitive market,” said Raya Sokolyanska, an analyst at Moody’s. “It’s hard to market successfully and maintain momentum. It requires capital, and there aren’t a lot of brands that are able to stay relevant and in demand for decades.”
By the time the pandemic set in, the IPO was cancelled as it became increasingly difficult to negotiate what the company felt were fair terms with its creditors.
However, J.Crew Group executives and analysts alike are confident that Madwell can still go public or sell over the next year or year and a half. While some colleagues feel that chief executive Libby Wadle has not moved the brand’s aesthetic forward enough and the brand has suffered for it, she is able to execute quickly on new projects, such as MWL, a leisure line conceived and executed in just months to respond to new pandemic-era needs for casualwear. (Wadle does not report to Singer, but directly to the board.)
“Madewell is all about comfort and non-career wear,” Hali said. And that’s where you want to be right now."
Wadle and Madewell stand in contrast to Singer and J.Crew, which has not launched anything new this year. Crew, the brand’s new, more casual concept, is still in progress.
Is a Turnaround Even Possible?
Singer may have as much as two to three years to execute on her vision, given the extraordinary circumstances under which she has had to operate. The company’s $400 million loan is not due until 2027.
Hedge funds are typically not patient investors, but Anchorage — which likes betting on high-glamour businesses like film and fashion — has a different reputation. It first invested in the movie studio MGM in 2010, when it was exiting bankruptcy, and is only attempting to sell it now, according to a report in the Wall Street Journal. However, last year, Anchorage’s flagship fund was down 1.4 percent, according to the WSJ report, and there may be more pressure to achieve quick returns.
Plus, the relationship has recently been complicated by information recently revealed about Anchorage chief executive — and J.Crew board member — Kevin Ulrich. A recent report in Institutional Investor alleges that Ulrich failed to share with investors that he was recently accused of “sexual battery.” The suit, according to a filing, has been “voluntarily discontinued without prejudice.” An Anchorage representative declined to comment on the matter.
The problem, of course, is that in order to sell J.Crew — potential buyers could be another specialty retailer, such as the Urban Outfitters Group, American Eagle Outfitters or, more likely, the Abercrombie & Fitch Group — Singer needs to make it more valuable. Any buyer will need to pay a premium in order to satisfy shareholders.
Apparel retail turnarounds are not common, especially at public or highly leveraged companies. Most analysts believe that while Madewell has an opportunity to regain the momentum it has lost, J.Crew’s hefty reliance on promotions can only be remedied by a clear plan that is attractive to younger consumers who have not shopped the brand before.
“The core customer has moved on,” Hali said. “I would target someone in their 20s. You want to be fashion forward; there are already so many great, traditionally preppy lines.”
This does not seem to align with what executives think Singer wants to do. But at the same time, they’re just not sure exactly what that is. “Product at the centre,” Singer told Politico. “That’s the game right now.”
The next year will be a test of whether Singer’s product-first strategy will pay off. “Fashion turnarounds are very difficult,” Sokolyanska said. “It takes a combination of efforts, and it’s hard to do even in a good environment.”
Editor’s Note: This article was revised on 24 November, 2020. A previous version misspelled the Libby Wadle’s name.