NEW YORK — J. Crew Group Inc. reported that net income for the fourth quarter ended Jan. 28 increased more than threefold to $15.1 million from $4 million in the year-ago period.
The net was pushed down in the year-earlier period due to purchase accounting and costs associated with the $3.1 billion acquisition of the firm by TPG Capital and Leonard Green & Partners in March 2011, taking the company private. Total acquisition costs were $65 million, including $20 million that was recorded in the fourth quarter of 2010.
Fourth-quarter adjusted earnings before interest, taxes, depreciation and amortization advanced to $59.5 million from $51.6 million a year earlier, about a 15 percent gain. That’s considered a better indication of how the company is actually performing since it erases the impact of acquisition, purchase accounting and other items.
Revenues increased 13 percent to $530.9 million, with comparable-store sales increasing 6 percent. Direct sales increased 10 percent to $170.8 million. Gross margin increased to 37.8 percent from 37.4 percent. Gross profit this year reflects the impact of purchase accounting of $2.7 million.
For the year, adjusted EBITDA slipped to $282.2 million from $288.2 million. Pro forma net earnings fell to $51.5 million from $121.5 million in fiscal 2010. Revenues increased 7.7 percent to $1.85 billion from $1.72 billion.
The company also reported compensation for its top executives. Chairman and chief executive officer Millard “Mickey” Drexler earned his usual $200,000 but has options valued at $11.32 million as well as $1.67 million in other compensation. Drexler, 67, signed a new agreement extending his employment through March 7, 2015, subject to automatic one-year renewals. Drexler also has an opportunity to earn an annual bonus award, with a target opportunity of $1.2 million, based on performance metrics set by the board.
When Drexler joined the company in 2003, he invested $10 million of his own money to buy a substantial equity stake. He also paid $1 million for a grant of stock options and a grant of restricted stock. His annual base salary was set at $200,000 in 2003 and has not increased.
With the acquisition, Drexler contributed 2,287,545 shares worth about $99.5 million in exchange for a stake in J. Crew’s new parent company. Drexler owns between 8 and 9 percent of the company’s shares.
President and executive creative director Jenna Lyons received a salary of $1 million, and received stock options valued at $2 million.
Stock and option awards are reported due to Securities and Exchange Commission requirements. The compensation recorded in these categories was not necessarily realized.
From overseeing America’s fastest-growing speciality retailers to codifying cool, WWD talked to the women who are leading the way for the future of beauty. Check out our Instagram Stories to see how these women built today and are creating tomorrow. (📸: @hannah_khymych) #wwdbeauty
For @laperlalingerie's spring 2018 show, the brand chose to host their event at @thevenetianmacao. With Chinese megastars @bingbing_fan and @hubing in attendance, La Perla debuted a rock ‘n’ roll-inspired collection. The show marked the start of Sands Macao Fashion Week, which runs from October 19 to 24 — the city’s first such event. Pictured here are models backstage with glimmering eyes. #wwdfashion (📷: Cheuk-Yin To)
Trending for spring 2018: top stitch design. Gone are the days of stitch just for seams — designers are using the once-minimal detail to create strong decorative elements. (📷: Paola Testa; Styled by @andrew_shang) #wwdfashion
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)