NEW YORK — J. Crew Group Inc. is running strong and bringing its business to new markets.
“It’s been a nice year so far,” Millard “Mickey” Drexler, chairman and chief executive officer, told WWD. “Every day we get a bit smarter about our business, but you can never let your guard down.”
On Wednesday, the company reported a robust second quarter, marked by a return to the black and strong sales and full-price selling across several categories. Executives also cited plans to add more men’s wear stores this year, and divulged the time frame for opening the first J. Crew stores in Europe and Asia, meaning the company is getting close to signing leases. A London store is seen opening in the second half of 2013, and a store in Hong Kong is seen opening in the first half of 2014.
Last year, J. Crew crossed borders for the first time by launching international shipping, partnering with Net-a-porter, and opening a store in the Yorkdale Shopping Centre in Toronto, marking the first brick-and-mortar move in its international expansion plan. Last March J. Crew expanded its international shipping to 107 countries, up from 29, and more recently revealed a plan to distribute to Lane Crawford in Asia.
J. Crew reported net income of $22 million for the second quarter ended July 28, compared with a $10.5 million loss in the year-ago period. Last year’s loss was due to nonrecurring inventory and litigation costs associated with its acquisition by TPG Capital L.P. and Leonard Green & Partners L.P. in March 2011. In the 2011 period, the amortization of inventory from purchase accounting cost the company $22 million, and litigation costs reached $6.5 million.
Total revenues in the latest quarter rose 21 percent to $525.5 million, while comparable company sales increased 14 percent. Gross margin increased to 45.1 percent from 36.5 percent, reflecting healthy full-price selling.
Operating income increased to $62.1 million, compared with $12.3 million in the second quarter of 2011.
Men’s wear, according to the company, increased at a higher rate than women’s last quarter, and executives cited plans to open two more units this year, including a Ludlow shop in Copley Place in Boston on Sept. 18, and a J. Crew men’s shop in The Grove in Los Angeles on Nov. 21, bringing the total to nine men’s units. J. Crew men’s wear, Drexler said, has become “quite well known as a strong franchise. Our Ludlow suit business is a business unto itself, as is our shirt business.” Ludlow is a J. Crew label.
With the rollout of men’s stores, “We are ramping up, only selectively,” Drexler said. “We are not running fast. We are running strategically and appropriately….I don’t think men have had a great choice in the last number of years to buy high quality at prices that are reasonable.”
Overall at the company, “We intensified our product offerings from a creative point of view,” Drexler said. “I would characterize the J. Crew product and merchandising as standing out in the marketplace. People voted with their pocketbooks, but we worked hard at it, and we continue to innovate and create every day….A lot of designers sell primarily accessories. We are in the apparel and accessory business.”
Drexler said that the brand’s pricing below designer and the fact that J. Crew is not sold at discount in channels other than its own “long-term builds loyalty into the customer base.” He also said not being a business that designs products flaunting the logo enhances the appeal. “We maintain the friendliness of the brand.”
Drexler also said that certain categories were identified for intensification this year, though he declined to specify, and also stressed the marketing efforts, including reformulating the catalogue, were intensified as well.
Regarding the Madewell brand, Drexler said, “We are expanding it both storewise and onlinewise. We’re very excited. We’re launching our fourth catalogue in September.”
“What he has done at Vuitton is really exceptional,” said @gameofthrones’ actress Gwendoline Christie on @mrkimjones’ final show for @louisvuitton. “He has rebooted luxury in terms of making it commercial, viable and contemporary. And most importantly artistic. He has never compromised his artistic vision for the sake of commodity.” (📷: @zefashioninsider)
After seeing a demand for men’s wear from its customers, British contemporary women’s wear label @ariesarise has added a men’s wear component and will launch a unisex collection with @mrporterlive. The 20-piece collection includes jackets, denim, logo T-shirts and more with deconstructed ‘90s vibes. Set to launch on January 18, you can shop the pieces on Aries’ website and on mrporter.com. #wwdfashion
“And so spending so much time with a character who thinks like that, inevitability you try and analyze yourself and go back and think about your own demons and dark chapters that you had in your life,” says @thedanielbruhl of his role in TNT’s “The Alienist.” The show, set in the Gilded Age of New York, also stars Dakota Fanning and Luke Evans. Head to WWD.com to read about how 39-year-old Brühl prepared for the role and why he thinks the show is so relevant to today #wwdeye ( 📷: @Eriktanner)
Now that Celine Dion’s collection has topped $10 million in sales, the pop superstar, fashion icon and newly-minted industry player is eyeing growth in Asia. Read the full report by @tiffanyap, link in bio. #wwdnews #celinedion
“My personal philosophy to beauty is paying attention to oneself. I love to be outdoors, lots of fresh air, trying to take care of yourself as best you can. I always notice that comes through,” says Felicity Jones, the global face of @shiseido-owned @cledepeaubeauteus, which launches today. Head to WWD.com to read more about the actress’ love for beauty and how she prepared for her new role in “The Basis of Sex,” playing the young Ruth Bader Ginsburg. #wwdbeauty (📷: @dandoperalski)
Among the familiar faces at @off____white’s show was a surprise figure: Japanese artist @takashipom, pictured here on Wednesday morning. Other show-goers included @jerrylorenzo, who spoke about his upcoming project: a @nike collaboration for back to school, with designs inspired by his childhood on the West Coast. Sitting in the front row were Future, Don Crawley, @miguel and more. See the rest of the photos on WWD.com #wwdeye (📷: Stephane Feugere)
According to @laurentsai, former “Terrace House: Aloha State” cast member, she didn’t know she was auditioning for the Japanese version of “Real World.” “I was telling a couple of my friends and someone’s like, ‘That sounds a lot like Terrace House.’ I was like, ’No it can’t be.’” Turns out, it was. But Tsai isn’t just a reality star — she’s an illustrator who has worked with Starbucks Japan and most recently, she’s dipping her toes into the fashion world. Head to WWD.com to read about her time on the show, modeling and her art. #wwdeye (📷: @danieldorsa)
More changes are coming to New York Fashion Week: Beginning with the spring 2019 collection, @alexanderwangny will move his New York show to June from September, adopting a biannual schedule with collections shown in June and December. Additionally, the @cfda is planning for an official summer/winter fashion season taking place as soon as June and December 2018. Read more about the upcoming changes on WWD.com. #wwdnews #wwdfashion (📷: @slovekinpics)