NEW YORK, United States — J.Crew named former Victoria's Secret Chief Executive Jan Singer as CEO on Tuesday, bringing to a close a lengthy period of turmoil at the top of the struggling clothing brand.
Singer will join the company on February 2. Interim Chief Executive Michael Nicholson will return to his former position as president and chief operating officer.
Singer is a retail veteran. Before her time in the top job at Victoria's Secret, she was CEO of the women's shapewear brand Spanx, and previously worked at Nike for over a decade. And while she’s faced her fair share of challenges in recent years, resigning from the L Brands-owned Victoria’s Secret in November 2018 as the brand began experiencing increased public scrutiny, she brings a strong resume and a steady hand to the troubled J.Crew, analysts say.
"The appointment of Jan Singer is good news as it gives J.Crew leadership at a time when it desperately needs a sense of direction," said Neil Saunders, retail analyst at GlobalData. "Ms Singer’s background in fashion and merchandising will be useful, as these are at the heart of J.Crew’s problems."
The American fashion retailer, best known for its clean, classic wares that became a pop phenomenon in the late aughts, has been struggling with declining sales and waning customer interest for years. In 2018, J.Crew generated $1.8 billion in annual sales, down nearly 22 percent from five years earlier. It is also burdened with $1.7 billion of debt, limiting the brand's ability to invest in a turnaround.
While it was once considered a closet staple for the American shopper — a brand known for a tomboy-meets-preppy aesthetic crafted by longtime creative director Jenna Lyons — J.Crew lost its cool in the mid-2010s and has yet to show signs of recovery. (The first full collection from well-regarded women's designer Chris Benz hits floors this spring.) In recent years, it's also been eclipsed creatively by sister brand Madewell, which became the denim resource for hip Millennials. Madewell’s success is so profound that parent company J.Crew Inc. has said it plans to spin Madewell off into its own company under the leadership of Chief Executive Libby Wadle.
For the past year, however, J.Crew has been in a holding pattern following the abrupt departure of Chief Executive James Brett, the former president of home goods brand West Elm, who was brought on to relaunch the brand after longtime CEO Mickey Drexler stepped down in June 2017.
Brett’s turnaround strategy was to lower prices and launch sub-brands within J.Crew. He brought Madewell clothing into stores and added extended sizing. He also pushed the retailer away from the psycho-preppy look it became known for under Lyons, who also exited just months before his arrival.
But Brett’s relaunch of J.Crew did not catch on with shoppers. He stepped down after just 16 months, in November 2018, saying in a statement that he and J.Crew’s board were “unable to bridge our beliefs.”
Nicholson, on an investor’s call in March, admitted that the brand’s strategy under Brett had “delivered disappointing results in 2018 as many new strategies we deployed were ultimately not successful and negatively impacted our financial performance.”
J.Crew is looking to an industry stalwart like Singer — who left her role at Victoria's Secret the same month of Brett's exit — to lead the company into the next decade.
“Jan is a dynamic leader with significant experience growing and modernising omnichannel brands,” Chad Leat, the chairman of J.Crew Inc.'s board of directors, said in a statement.
While serving as CEO of Victoria’s Secret, Singer attempted to bring change to the ailing American intimates company. In a conference call in 2017, she said she wanted to bring “choices of sexy” to the Victoria’s Secret shopper, telling investors that while competitors like Aerie were thriving off the bralette trend, Victoria’s Secret could thrive if it stuck to its roots.
But she also tried lowering prices in order to attract new customers and updated styles as frequently as some competing fast-fashion retailers, according to Bloomberg. Neither strategy was successful in reversing the slide in sales.
Singer left her role at Victoria’s Secret after just two years, and just days after Chief Marketing Officer Ed Razek apologised for offensive comments made about the plus-size and transgender communities in an interview with American Vogue.
She will have her work cut out for her at J.Crew, which may soon be forced to sink or swim on its own once the planned spin-off of Madewell moves forward later this year. An initial public offering for the more-successful sister brand would raise badly needed cash for J.Crew ahead of debt repayments scheduled for 2021. But it also leaves the brand without a key source of income should it fail to pull out of its downward spiral.
"Madewell has emerged as the company's crown jewel, accounting for the majority of profits,” Moody’s analyst Raya Sokolyanska said in a September 2019 note. “The IPO could ... help pay down a meaningful portion of the over $1.7 billion in debt, but the ultimate ability to address J.Crew's highly leveraged capital structure depends on the public market's receptivity to apparel retailers and the company's operating performance.”
Much will depend on Singer's turnaround plan, and the company's ability to execute her vision.
"J.Crew is not completely broken," said Saunders. "It is still reasonably well-regarded ... a large part of Ms Singer’s challenge will be to revamp the brand to give it a more contemporary feel that resonates with younger, fashionable shoppers."