J Crew makes small gains, despite tough year

It has been a tough year for American retailer J Crew, who this week reported another decline in sales in the last quarter. While overall the J Crew Group saw profits boosted by a buoyant Madewell brand - sales jumped 26 percent to 92.5 million dollars, sales of its flagship brand J Crew fell 2.6 percent to 604.5 million dollars.

But sales declines have been somewhat regular occurrences at J Crew, a company that has been in limbo ever since last summer when customers began to shun its product offer. At the end of last year J Crew announced it replaced its womenswear design chief and started the process of cutting 175 jobs.

Companies respond drastically when sales are down

Big companies often take drastic measures when sales are under performing, sometimes replacing entire teams, rather than changing their approach to design and product offering. There has been little acknowledgment of the company selling highly priced overly-designed goods, despite its preppy and clean high street image.

Last year one of J Crew's loyal customers summed up the company's turmoil in a very poignant open letter: "If only I, an ordinary mother on a modest income, could afford to wear a 400 dollar cashmere skirt, silk barely-there blouse and belt to a one-time business-casual event," she wrote.

J Crew's best-loved products made way for tricky styling

Instead, J Crew's staple of clean lines, affordable basics and great quality, made way for tricky styling and in some ways alienated its core customer. Last summer J Crew's Tilly sweater got a life of its own, when it became a symbol for all that was wrong with the company: dubbed as too expensive and poorly fitting, J Crew's chief Mickey Drexler was quick to acknowledge company failed to deliver the "perfect" cardigan and v-neck sweater that season.

But sales margins have gotten better, despite ongoing losses: The latest quarter "represented a positive ending to a difficult year," noted chief executive Millard Drexler, "we believe we are better positioned having made important changes in our product and marketing and through the careful management of expenses and inventory.”

“Our women’s business has been a key area of focus for us and we remain committed to getting the product where it needs to be. In Q4, we saw strength in women’s jackets, pants and shirts and the improvement in the sales trend for sweaters and knits. Additionally, our men’s business was also highlighted by strength in pants and jackets and an improved trend in sweaters and knits.”

Last year, the company continued to write down the value of J Crew brand and in December said it had hired a retail industry veteran to revamp operations.

Image:J Crew