J.Crew preparing to enter the budget fashion sector?

American fashion retailer J.Crew is thought to be busy developing a new store concept to tap into a new area of the industry: the budget fashion sector. Last November, J. Crew Group Inc registered the trademark J. Crew Mercantile to apply to products such as apparel, footwear, accessories,

bags and jewelry, which sparked rumors that the retailer is preparing to launch new products or even a new retail chain.

Sources

close to matter told the Wall Street Journal that the retailer is preparing to introduce a budget retail chain known as J.Crew Mercantile, which is set to offer merchandise at a similar price range to its US outlet stores, J.Crew Factory. The new store format will reportedly help the retailer tap into a new demographic of budget conscious shoppers, without damaging its mainline label image.

J. Crew Mercantile to appeal to budget shoppers

J. Crew is said to be currently searching for new retail locations for the budget-fashion chain, with a handful of leases signed but no stores opened as of yet. The new store concept would be the fashion retailer's newest attempt to tap into different segments of the market and follows a previous move Millard 'Mickey' Drexler, J.Crew's Chief Executive Officer made whilst working as CEO of Gap Inc.

Drexler has been credited for creating Gap's sister label Old Navy, which offers lowered priced apparel than its sibling label and has become the companies leader in both store numbers and revenue in the US.

Sources indicate that a new retail chain would help strengthen J.Crew position in the market, as Leonard Green & Partners and TPG Capital the private-equity firms which own the fashion retailer, could be preparing the brand for an initial IPO.

However, a company spokeswoman told WWD that it was “too preliminary to discuss the subject,” as the trademark application is still pending approval from the US Patent and Trademark Office.

This news comes swiftly after the announcement that the American fashion label was preparing to open its fourth store in London, after opening it first international stores on Regent Street, Brompton Road and Lambs Conduit Street during the past year.

Photos: J.Crew SS 14, trademark for J.Crew Mercantile