Prepare to see a whole lot less of J.Crew—fewer stores and a scaled-back catalog — in the coming months.
The ailing retailer released its earnings report for the first fiscal quarter of 2017 on Monday, revealing a 6 percent drop in total sales for the company (which includes both J.Crew and Madewell) and an 11 percent drop in J.Crew sales specifically. Cool younger sister Madewell, on the other hand, experienced a 17 percent increase in sales, which translates to a 10 percent increase compared to the first quarter of 2016. The overall losses—the company is currently operating at a $153.3 million deficit compared to a $7.3 million surplus last year—mark J.Crew's 11th straight quarter of declining sales, according to Bloomberg.
Chairman and CEO Mickey Drexler, who announced he would be stepping down from the latter role shortly after longtime creative director Jenna Lyons also left the company, said in a statement: "While we are disappointed with our first quarter earnings, we are optimistic regarding the work we have underway to improve our business. We have a clear vision and action plan in place to meet our customers' needs — wherever and however they choose to shop."
In a conference call with investors on Monday, J.Crew executives discussed an expansion of this "action plan" to salvage the hemorrhaging company, according to Fashionista. The company previously announced the elimination of 250 positions, a reorganization of its management structure, and the slashing of "elitist" prices, and on Monday, it revealed it would be closing 20 total stores—but opening 10 new Madewell locations. Fashionista reports that J.Crew President, COO, and CFO Mike Nicholson also said the company is focused on "evolving pricing architecture to align with customer expectations and improving value perception," and that the merchandising and design teams will work together to bring "stronger value" to the brands' new and existing styles.
And don't hold your breath waiting for the next edition of the glossy J.Crew "Style Guide" to appear in your mailbox. Nicholson said the company will "reinvent" the catalog by cutting back its delivery and shifting those resources to more profitable online sales. J.Crew may also look into expanding its wholesale and franchise opportunities in the U.S. and abroad: The brand became available in Nordstrom stores last year, and Nicholson announced plans on Monday to expand similarly beneficial partnerships. Fingers crossed that everyone's favorite classically preppy brand makes it through these uncertain times.
