J.Crew; The Rise and Fall
As what was considered to be its peak J Crew along with sister Brand Madewell were exhilarating through 100 countries with a total of 500 physical stores. What was once a popular brand with celebrities, often seen worn by politicians was later diminished.
With a timeline that will begin by 1997 J.Crew hit a financial stag with what was seen as a potential to grow and recognition was developed in the eye of private equity firm TPG Capital. Buying about 88% of the stake in J.Crew which was worth over $500 million a change in leadership within the business was made making way for the hire of retail star Millard Drexler who then became the CEO in 2003.
Drexler who was known as “The Merchant Prince” due to his history of being able to turn around Ann Taylor and GAP before taking a position at J. Crew. Jenna Lyons who was a part of the company since 1990 was given the Vice President of women’s designs upon the hire of Drexler. The duo then made decisions which often focused on the brand's authenticity, this led to a change in where fabrices were sourced, a design rehaul on all stores were made, and creative control were later handed over to the designers.
Taking J.Crew public in 2006 the company saw a spike in cash. With a $20 per share the company then raised $400 million, allowing Drexler to then open the first Madewell store that year. As all of these decisions were becoming fruitful back to back, J.Crew revenue reached $1.3 billion in 2007. With everyday customers and celebrities gravitating towards the brand J.Crew was seeing its best years.
In 2008 then First Lady Michelle Obama famously wore J Crew during her appearance on “The RomightbShlw with Jay Leno”, with celebrities and public figures like Taylor Swift, Jennifer Love Beeitt repping the brand J.Crew was then labeled as the staple for perfect pieces for a modern day professional. With the presence of a recession in 2008 J.Crew still showed little signs of slowing down in the popularity department. While retail sales began to plummet to a 35 year low, J.Crew instead was able to make gains with the company making $363 million in the third quarter of 2008 with a 9% increase from the third quarter of the previous year.
Fast forward to 2014 with customers beginning to favor fast fashion brands such as Zara and H&M, J.Crew clothing became expensive leading up to the net loss of about $658 million. With sales continuing to drop from the years 2015-2017 led to J.Crew not being able to return fw investments previously made by the private equity firm which resulted in a $1.7 billion debt.
With Drexler stepping down as CEO and replaced by Jim Brett, sales continued to plummet due to the occurrence of the current global pandemic. With the decision of having to resort to filing for bankruptcy, and the need to convert the $1.6 billion debt owed in wrought as well as to revive $400 million from lenders, does J.Crew have the ability to fully reinvent themselves to attract new customers? Only time will answer that question
By: Nathalia Lampkin
Instagram: @nathalia_lampkin