J.Crew revenues down 5% as Madewell sales soar, more stores to close
The American retailer reported a 5 percent decrease in total revenues for the three-month period ended October 28, dropping to $566.7 million. Comparable company sales decreased 9 percent, following a decrease of 8 percent in the third quarter last year.
Sales fell 12 percent at the New York-based company’s flagship brand in the third quarter, overshadowing strong growth for its Madewell brand.
Madewell sales increased 22 percent to $107.5 million, while comparable sales increased 13 percent.
Still, Madewell sales are too small to alleviate J.Crew from its troubles, which it has been combating for the last two years.
Meanwhile, a number of management changes has made it difficult to build momentum. Millard Drexler stepped down from the helm of J. Crew after 14 years this summer, leaving James Brett to take over as CEO. Moreover, Somsack Sikhounmuong stepped down as chief design officer in September, after taking over the role from Jenna Lyons in April.
J. Crew also announced plans to close 50 stores this year, up from a previous target of 30.
"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," said Jim Brett, Chief Executive Officer.
"During the third quarter of fiscal 2017, we drove gross margin expansion and reduced SG&A by delivering on our expense initiatives. As we solidify longer term strategies, we will continue to leverage our strong brand equity and unique capabilities to expand our reach, accelerate growth and maximize profitability.”
As of November 21, 2017, the company operates 269 J.Crew retail stores, 121 Madewell stores, and 182 factory stores.
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