Following the deal with Texas Pacific Group where the buy-out firm acquired a controlling interest for $560m one of J Crew’s co-founders, Emily Woods left the company. According to one of the key designers in the company under TPG the company’s approach to design was primarily focused on costs: “We’d get a list—X amount of styles, six $55 pants, seven $70 pants. We’d be picking fabrics and designing into boxes of criteria. It completely stifled creativity.”
As J Crew’s clothes became too “boring” for its typical customers the losses of the company started to widen, from $11m in 2001 to $40m in 2002. The atmosphere in the company was further worsened by the fact that 3 CEOs were gone over the course of 5 years. TPG’s goals of expanding the business and growing the brand did not seem to materialise.
One of the reasons that the merchandise was becoming dull and no longer appealing to customers was that most production / designer decisions were cost-driven. The creative team was responding to the cost side with the products that could be produced at a reasonable price. However, these were not the products that the customers wanted and no matter how they were priced, they were not selling very well.
The next recruit by the TPG was Mickey Drexler, who had earlier been fired from J Crew’s rival, Gap. Largely credited for turning Gap around and growing its revenues from [ ] to [ ] over the course of a decade, Drexler eventually fell out with the founder and made some wrong decisions about the company’s growth. In the end this proved a crucial “learning” for his turnaround of J Crew.
Mickey Drexler was known in the retail community for turning around both Gap and earlier –Ann Taylor. He was often c...
... middle of paper ...
... by J Crew:
1. J Crew kids line – “CrewCuts” – something J Crew did not do before but this was done on the basis of the example of the United Colours of Benetton, but in the quality / style framework consistent with the new strategy J Crew adopted
2. J Crew Bridal – a new line that was set up to reflect what the customers were buying. IT was discovered that al of of customers were buying simple cocktail dresses in different colours as bridesmaid dresses, so the company was quick to capitalise on that and create a separate line.
3. Collection - this was the top price/ quality segment, which represented items selling for sometimes several hundred dollars.
4. Madwell – a more upmarket / trendy clothes for younger people
The increase in J Crew’s offerings were immediately reflected after the takeover and continued to grow after the initial surge in new stores in 2008.
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