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.
Leading luxury brand are shaking things up to keep up with streetwear. Case in point: the arrival of @mrkimjones as artistic director of @diorhomme. Jones, who succeeds @@Kris_Van_Assche, is seen as one of the handful of designers who can actually straddle the luxury and streetwear worlds — which could lead to even more changes at established brands. What could this mean for the rest of the menswear landscape? Head to WWD.com to find out what experts predict #wwdfashion (📷: @franckmura)
“It’s like buying groceries. You’re going to buy the best mango, the best mozzarella, the best things. You have to, or others are going to take it all,” said @gabrielahearst on why she uses only the finest fabrics. Last week, Hearst received her first @cfda nomination for Womenswear Designer of the Year, and earlier this month she opened a permanent showroom in Paris. To read @jessiredale’s interview with the designer and find out why this is shaping up to be a big year for her, head to WWD.com. #wwdfashion (📷: @francoisgoize)
“It’s an interesting thing, playing a younger version of your mother. It’s an interesting concept. I adore my mom and love her in every capacity, but it was just something that had never crossed my mind,” says @anniemstarke on playing a young Joan Castleman in “The Wife.” The same role will be played by her mother Glenn Close. Read more about her growing up in the film industry as the daughter of producer John H. Starke and Close and what she has planned for the future #wwdeye (📷: @nataliamantini)
@asics is launching a new streetwear sneaker inspired by its latest ambassador, @steveaoki. The Hyper-Kenzen x Aoki, which will launch at @footlocker stores exclusively tomorrow, is a slip-on style that incorporates the brand’s proprietary Gel technology through beads integrated into the midsole for comfort and endurance. Read the full story on WWD.com.
@beyonce chose a custom gown by @falgunishanepeacockindia for mother @mstinalawson 's second annual Wearable Art Gala last night. The gown, which took 10 days to make, was inspired by Nubian warrior queen Amanishakheto. Reporting by @hernameislex . #wwdeye 👑 🐝#beyonce
After dressing @justintimberlake for his Super Bowl halftime performance last month, @stellamccartney has designed the star’s "Man of the Woods" tour wardrobe. Timberlake will be wearing a mix of pieces from McCartney’s fall men's collection as well as custom designs and items from his own closet. #wwdfashion