J. Crew plans to reduce prices to combat poor sales
To combat slumping sales, the retailer will be reducing the prices of 300 pieces. The brand will maintain some of its higher-end items, but slash the prices of many of its basics.
J. Crew’s sales fell 6 percent to $2 billion in 2016, and the brand has also cut hundreds of jobs. Mickey Drexler, chairman and CEO of the New York City-based company, says the new pricing strategy is an attempt to reestablish J. Crew as an affordable and approachable brand. Drexler says the mass retailer has become too high-end and fashion forward for much of its customer base.
The brand’s longtime creative director and president Jenna Lyons was responsible for taking J. Crew in a higher-end direction. Lyons recently announced her departure after 26 years at the company. She will remain on as a consultant until the end of the year.
To compete with fast fashion retailers like Asos, J. Crew will not only reduce its prices but also change its supply chain to get new designs into stores at a faster pace.
Even as J. Crew has struggled to improve sales, figures for the company’s lower-priced brand Madewell have remained strong. The company’s revenues as a whole fell 3 percent in 2016, but individually the Madewell brand saw a 14 percent increase in sales.
Amidst slow sales, the company has also seen significant restructuring to its leadership. Somsack Sikhounmuong was recently named the chief design officer. Seeing the success of the Madewell brand, the company promoted Madewell senior vice president of merchandising Lisa Greenwald to chief merchandising officer for the J. Crew brand.
An analytics team will determine how to optimize prices for the brand going forward. For now, simpler pieces such as dresses have been priced at $78, compared to $800 skirts the brand has sold in recent years.
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