J.Crew to close 50 stores as sales decline

By Allen Cone  |  Nov. 22, 2017 at 2:43 PM
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Nov. 22 (UPI) -- J.Crew Group announced plans to close 50 stores by the end of January as sales decline for the fashion retailer.

The New York-based company operates 572 stores, including 269 J.Crew, 121 Madewell and 192 factory outlet shops, according to a financial filing Tuesday.

Originally, the company planned to close 30 stores. The company didn't specify which of the stores in the United States, Canada, Britain and Asia would close.

Mike Nicholson, the chief operating officer, said store closings are part of plans to change from a "traditional brick-and-mortar specialty retailer" to a "digital-first" business.

J.Crew lost $161 million and total revenues decreased 4 percent to $1.66 billion through three quarters. One year ago at the same time, it lost $24.6 million.

Sales at stores open for at least a year fell 12 percent in the first nine months of the year, compared with a 9-percent decrease through the same point last year.

However, Madewell sales increased 20 percent to $285.2 million through nine month. In 2006, the company introduced Madewell, a modern-day interpretation of an American denim label founded in 1937.

"Our goal is to reinvigorate the J.Crew Brand to reflect the America of today and to continue to drive strong momentum in the Madewell Brand," Chief Executive Officer Jim Brett said.

This summer, Brett replaced longtime CEO Mickey Drexler after leading Williams-Sonoma Inc.'s home-furnishings chain West Elm.

Before departing, Drexler said the company increased prices when customers were becoming more cost-conscious.

"We gave a perception of being a higher-priced company than we were - in our catalog, online, and in our general presentation," Drexler told The Wall Street Journal. "Very big mistake."

J.Crew debuted in 1983 with the mailing of its first catalog. Six years later, it opened a flagship store at New York's South Street Seaport.

J.Crew is among several retailers shrinking their brick-and-mortar operations.

A total of 6,765 stores in the United States had closed through the end of October, according to Fung Global Retail & Technology, a retail think tank. That is a 235 percent increase from last year.

The think tank forecasts there will be a record 9,452 announced store closings by the end of this year, exceeding the previous record of 6,164 closing in 2008.

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