J.Crew
Encyclopedia
J.Crew Group, Inc. is a multi-brand, multi-channel, specialty retailer. The company offers an assortment of women's, men's and children's apparel and accessories, including swimwear, outerwear, loungewear, wedding, bags, hair accessories, belts, jewelry, and shoes. As of January 30, 2010, it operated 321 retail stores throughout the United States. The company conducts its business through retail, factory, clearance, crewcuts, and Madewell stores, catalogs, and on its Website.
, Talbots
, and L. L. Bean. Popular Merchandise initiated its own catalog operation, focusing on leisurewear for upper-middle-class customers, aiming for a Ralph Lauren
look at a much lower price. The first Popular Club Plan catalog was mailed to customers in January 1983 and continued under that name until 1989. Popular Club Plan catalogs often showed the same garment in more than one picture with close-up shots of the fabrics, so customers could get a sense of how the garment looked on the body and be assured of the company’s claims of quality.
Throughout the mid-1980s, sales from catalog operations grew rapidly. “Growth was explosive—25 to 30 percent a year,” Cinader later recollected in the New York Times. Annual sales grew from $3 million to more than $100 million over five years.
In 1987, two executives left the company to start their own catalog, Tweeds.
In 1989, Popular Merchandise, Inc. became known as J.Crew, Inc. The company attempted - and failed - to sell the Popular Club Plan brand.
Also in 1989, J.Crew opened its first retail store, in South Street Seaport
in downtown Manhattan.
Five months after the opening of its first store, J.Crew added two new catalog lines: “Classics” and “Collections.” “Collections” used more complicated designs and finer fabrics to create dressier and more expensive items, while “Classics” featured clothes that could be worn both to work and for leisure activities.
In the fall of 1989, J.Crew opened three new stores in Chestnut Hill, Massachusetts; San Francisco, California; and Costa Mesa, California, all locations with strong catalog sales. By the end of the year, retail sales nearly hit $10 million.
Despite 1989 revenues that were estimated at $320 million, J.Crew suffered a setback when its agreement to sell its Popular Club unit collapsed at the end that year. In addition, rumors circulated that the company’s Clifford & Wills low-priced women’s apparel catalog was doing poorly.
J.Crew saw revenues reach $400 million in 1990 but reported that its four existing stores had not yet started producing enough profits to cover their overheads. The next phase of store openings included outlets in Philadelphia, Cambridge, and Portland. The company scaled back its plans for opening retail stores from 45 stores to 30 or 35.
. In April 1991, J. Crew mailed 75,000 J.Crew catalogs and 60,000 Clifford & Wills catalogs to potential customers in the province of Ontario
. Response rates to this effort were slightly lower than in the United States, but each order, on average, was higher.
In 2011, J. Crew opened its first international store in the Yorkdale Shopping Centre
in Toronto
, Ontario.
In an interview with the Financial Times
, CEO of J.Crew Mickey Drexler let slip that J.Crew would be expanding to the U.K. with their flagship store being on London's Regent Street. He indicated that the company would be following up their recent expansion into Canada and Canadian ecommerce with a physical store in England, most likely followed by ecommerce elsewhere, such as France and Germany. Although a few locations were reviewed for the London store, including Covent Garden and the East End, the ultimate decision was to open on Regent Street.
Corporation. J.Crew Group was owned by the Cinader family for most of its existence, but in October 1997 investment firm Texas Pacific Group Inc. purchased a majority stake in the firm. By the year 2000, Texas Pacific held an approximate 62 percent stake, a group of J.Crew managers held about 10 percent, and Emily Cinader Woods, the chairman of J.Crew and founder of the J.Crew brand along with her father, Arthur Cinader, held most of the remainder.
Shortly after the announcement of the deal, some in the business community criticized the terms of the deal involving the company's CEO and a majority shareholder. As a result, the "go-shop" period was extended shortly after the initial announcement. In addition, several investigations relating to potential shareholder actions against the company were announced.
Early History
In 1947, Mitchell Cinader and Saul Charles founded Popular Merchandise, Inc., a store which did business as Popular Club Plan and sold low-priced women’s clothing marketed through in-home demonstrations.The First Catalog
The 1980s marked a booming sales period for catalog retail giants Lands’ EndLands' End
Lands' End is a clothing retailer based in Dodgeville, Wisconsin, that specializes in casual clothing, luggage, and home furnishings. The majority of Lands' End's business is conducted through mail order and Internet sales, but the company also runs more than a dozen retail operations, primarily in...
, Talbots
Talbots
Talbots is a specialty retailer and direct marketer of women’s classic clothing, shoes and accessories. Established in 1947, the company sells items such as the blazer, trench, white shirt, ballet flats and pearls....
, and L. L. Bean. Popular Merchandise initiated its own catalog operation, focusing on leisurewear for upper-middle-class customers, aiming for a Ralph Lauren
Ralph Lauren
Ralph Lauren is an American fashion designer and business executive; best known for his Polo Ralph Lauren clothing brand.-Early life:...
look at a much lower price. The first Popular Club Plan catalog was mailed to customers in January 1983 and continued under that name until 1989. Popular Club Plan catalogs often showed the same garment in more than one picture with close-up shots of the fabrics, so customers could get a sense of how the garment looked on the body and be assured of the company’s claims of quality.
Throughout the mid-1980s, sales from catalog operations grew rapidly. “Growth was explosive—25 to 30 percent a year,” Cinader later recollected in the New York Times. Annual sales grew from $3 million to more than $100 million over five years.
The 1980s
In 1985, the “Clifford & Wills” brand was launched, selling women’s clothing that was more affordable than the Popular Merchandise line. The brand was sold to Speigel, Inc. in 2000 with the intent to boost sales.In 1987, two executives left the company to start their own catalog, Tweeds.
In 1989, Popular Merchandise, Inc. became known as J.Crew, Inc. The company attempted - and failed - to sell the Popular Club Plan brand.
Also in 1989, J.Crew opened its first retail store, in South Street Seaport
South Street Seaport
The South Street Seaport is a historic area in the New York City borough of Manhattan, located where Fulton Street meets the East River, and adjacent to the Financial District. The Seaport is a designated historic district, distinct from the neighboring Financial District...
in downtown Manhattan.
Retail Stores
In March 1989 the first J.Crew retail outlet opened in the South Street Seaport in Manhattan, and the company planned to open 45 more stores.Five months after the opening of its first store, J.Crew added two new catalog lines: “Classics” and “Collections.” “Collections” used more complicated designs and finer fabrics to create dressier and more expensive items, while “Classics” featured clothes that could be worn both to work and for leisure activities.
In the fall of 1989, J.Crew opened three new stores in Chestnut Hill, Massachusetts; San Francisco, California; and Costa Mesa, California, all locations with strong catalog sales. By the end of the year, retail sales nearly hit $10 million.
Despite 1989 revenues that were estimated at $320 million, J.Crew suffered a setback when its agreement to sell its Popular Club unit collapsed at the end that year. In addition, rumors circulated that the company’s Clifford & Wills low-priced women’s apparel catalog was doing poorly.
J.Crew saw revenues reach $400 million in 1990 but reported that its four existing stores had not yet started producing enough profits to cover their overheads. The next phase of store openings included outlets in Philadelphia, Cambridge, and Portland. The company scaled back its plans for opening retail stores from 45 stores to 30 or 35.
Expansion into Canada
In early 1991 the company hired a director of new marketing development and began efforts to expand their sales into CanadaCanada
Canada is a North American country consisting of ten provinces and three territories. Located in the northern part of the continent, it extends from the Atlantic Ocean in the east to the Pacific Ocean in the west, and northward into the Arctic Ocean...
. In April 1991, J. Crew mailed 75,000 J.Crew catalogs and 60,000 Clifford & Wills catalogs to potential customers in the province of Ontario
Ontario
Ontario is a province of Canada, located in east-central Canada. It is Canada's most populous province and second largest in total area. It is home to the nation's most populous city, Toronto, and the nation's capital, Ottawa....
. Response rates to this effort were slightly lower than in the United States, but each order, on average, was higher.
In 2011, J. Crew opened its first international store in the Yorkdale Shopping Centre
Yorkdale Shopping Centre
Yorkdale Shopping Centre is a large shopping mall in Toronto, Ontario, Canada. It contains over 250 stores and is located in the community of Downsview, in North York. It is the fifth largest shopping mall in Canada and also enjoys the highest sales per square foot of any mall in Canada, with...
in Toronto
Toronto
Toronto is the provincial capital of Ontario and the largest city in Canada. It is located in Southern Ontario on the northwestern shore of Lake Ontario. A relatively modern city, Toronto's history dates back to the late-18th century, when its land was first purchased by the British monarchy from...
, Ontario.
Further internationalization
In 1992, J.Crew intensified its push into international markets by hiring a new vice-president for international development. The company already mailed hundreds of catalogs to customers in Japan and Europe, most of whom had become acquainted with J.Crew while traveling or living in the United States.In an interview with the Financial Times
Financial Times
The Financial Times is an international business newspaper. It is a morning daily newspaper published in London and printed in 24 cities around the world. Its primary rival is the Wall Street Journal, published in New York City....
, CEO of J.Crew Mickey Drexler let slip that J.Crew would be expanding to the U.K. with their flagship store being on London's Regent Street. He indicated that the company would be following up their recent expansion into Canada and Canadian ecommerce with a physical store in England, most likely followed by ecommerce elsewhere, such as France and Germany. Although a few locations were reviewed for the London store, including Covent Garden and the East End, the ultimate decision was to open on Regent Street.
Today
Each year the company issues 24 editions of the J.Crew catalog, distributing more than 80 million copies. As of January 2011, the company operates 248 retail stores, including 217 J.Crew stores, 27 Madewell stores, and 9 crewcuts stores, as well as 85 J.Crew Factory outlet locations. Additionally, the company has 76 locations in Japan, which are operated under license by ITOCHUITOCHU
, until 1992 "C. Itoh" in English, is a Japanese general trading concern based in Umeda, Kita-ku, Osaka and Aoyama, Minato, Tokyo. It has a common origin with Marubeni Corporation. Itochu is a Fortune 500 company.-History:...
Corporation. J.Crew Group was owned by the Cinader family for most of its existence, but in October 1997 investment firm Texas Pacific Group Inc. purchased a majority stake in the firm. By the year 2000, Texas Pacific held an approximate 62 percent stake, a group of J.Crew managers held about 10 percent, and Emily Cinader Woods, the chairman of J.Crew and founder of the J.Crew brand along with her father, Arthur Cinader, held most of the remainder.
J.Crew Taken Private in a Management led Buyout
On November 23, 2010, the company agreed to be taken private in a $3 billion deal led by management with the backing of TPG Capital and Leonard Green & Partners, two large private equity firms. The announcement of the offer from two investment firms—including one that used to own J.Crew—came as the retailer reported Tuesday that its third-quarter net income fell 14 percent, hurt by weaker women's clothing sales. The company also lowered its guidance for the 2010 year. Under the deal as proposed, J.Crew shareholders would receive $43.50 per share in cash, representing a 16 percent premium to the stock's closing price the prior day of $37.65. CEO Mickey Drexler, the former Gap Inc. chief credited with turning J.Crew around since coming aboard in 2003, will remain in that role and retain a "significant" stake in J.Crew. As of September 2010, he has owned 5.4 of its outstanding shares as of September. TPG, one of the investment firms in the deal, took a majority stake in J.Crew Group Inc. in 1997 and remained majority shareholder until the company went public in 2006.Shortly after the announcement of the deal, some in the business community criticized the terms of the deal involving the company's CEO and a majority shareholder. As a result, the "go-shop" period was extended shortly after the initial announcement. In addition, several investigations relating to potential shareholder actions against the company were announced.
External links
- jcrew.com, J.Crew official website
- madewell.com, Madewell official website
- Lomax, Alyce (August 19, 2005) "A J. Crew Review". The Motley Fool.