By  on February 16, 2006

NEW YORK — J. Crew is growing by downsizing. Crewcuts, the retailer's children's collection, will be introduced in earnest this spring for boys and girls ages two to eight, after a short-lived run in the Nineties and some dabbling with a few small-fry styles in recent holiday catalogues. The Crewcuts summer collection will arrive March 31 at 10 J. Crew stores that are carving out Crewcuts shop-in-shops ranging from 600 to 1,200 square feet. Also, a 2,000-square-foot freestanding Crewcuts store, with 1,400 square feet for selling, will open at the North Park Mall in Dallas on April 25. A second location is being negotiated and will be announced soon. Crewcuts comes at a time when J. Crew Group is developing another retail concept completely dissociated from the J. Crew name, with a different price point and target market than J. Crew. Also, the retailer continues to eye an initial public offering after postponing its IPO last year. The offering could happen this year and would have a greater chance of getting off the ground with new brands or brand extensions in the works to whet the appetite of potential investors about growth prospects and growth vehicles.The Crewcuts strategy was in development months before there was any serious thought of an IPO, though, according to sources close to the company. J. Crew Group chairman and chief executive Mickey Drexler declined to comment on the IPO, or the new brand under development, though he did detail the philosophy behind Crewcuts and brand extensions during an exclusive interview. His main points: The Crewcuts investment is "conservative," with only a handful of locations to carry the collection, at least initially, yet the company is "passionate" about children's wear and has been spurred on by requests from catalogue and Web customers for J. Crew in kids' sizes. He characterized Crewcuts as "basically mini J. Crew." "We are going after a J. Crew style that our customers really love for themselves and want for their kids," Drexler said. "For any business to succeed, it's a matter of putting together a certain style and to have a strong point of view. We will have a strong point of view, but it's not a ‘mommy and me' or a ‘take the holiday picture' thing. If you look at J. Crew classics, they all work very well in small sizes."Drexler, the former Gap ceo, knows the children's wear business well, considering he launched GapKids in 1984, babyGap a few years later and, in the Nineties, rolled out Old Navy, which carries a lot of children's clothes. Asked if there's still a big opportunity for children's wear, Drexler replied: "In today's world, there is no wide-open market. I don't think there is ever really a wide-open market in any particular apparel category, but there is always an opportunity if what one brings to the market differentiates from competitors. Certainly, there are enough kids' [apparel] alternatives around. There are enough adult alternatives around, but it's really about the product and bringing something new to the market. No, we don't see a compelling opening, but we do see a market opportunity in clothes like ours."[Through the J. Crew catalogue and Web site,] we have got lots of customer feedback. Crewcuts was always on the top five list of requests. We are not doing this because we need to grow the company at this stage of development," with the adult J. Crew far from its growth ceiling and seeing new products and more stores on the horizon. "We are doing [Crewcuts] because there is an opportunity to provide the J. Crew style for children."The small selection of Crewcuts items seen in the last two holiday catalogues, with baby items in 2004 and ages two to eight last year, was "just for fun," Drexler said. "We were really doing it in a small way."The company is still taking a cautious approach. Crewcuts has a team of about six, without any designers, but with merchandisers and technical staff adapting J. Crew adult looks to children's sizes, utilizing softer and more durable fabrics, providing features such as waistbands so kids can grow into the clothes and bringing in brighter colors they might prefer."We don't have designers," Drexler said. "The investment for us was quite a conservative one," referring to the staffing as well as inventory levels at the outset, and the square footage in the stores devoted to Crewcuts. "We are leveraging existing real estate."Part of our business process is to be a lot more efficient," Drexler continued. "J. Crew opened up stores that were too large. What better way to deal with that."Stores that will have Crewcuts shop-in-shops are in Greenwich and Westport, Conn.; Tysons Galleria in McLean, Va.; Southdale Center in Edina, Minn.; Oak Brook, Ill.; SouthPark in Charlotte, N.C.; Pasadena, San Diego and Corte Madera, Calif., and Chestnut Hill, Mass.A Web site goes live at the end of March, and there will be some exposure in the J. Crew catalogue for the kids' line, but it mainly will be informational, directing shoppers to the Web site. A separate Crewcuts catalogue is not planned, nor are superstores, a strategy that's been employed by many designers and brands wishing to house several categories under one roof and maximize visual impact and sales potential.Asked if Crewcuts portends additional brand extensions, Drexler said: "We take it a day at a time. There is nothing to [read] into this, beyond our customers wanted it and that we felt good about it and we are doing it out of passionate emotion, more than market research. Most quality companies actually begin with really having a passion and love for the product and the fact that customers want it. I don't think there are any rules or regulations. It's all a matter of having a consistent point of view in the style and merchandising." The Crewcuts stores, currently the only other retail concept at J. Crew Group aside from J. Crew and outlets, probably won't display the J. Crew name, though it's possible the company will incorporate a tag line on the window or inside the store indicating, "The J. Crew clothes you love, only smaller." As of last week, no decision was made on that. Even without a tag line, Crewcuts will be readily recognized as part of the J. Crew family. "This is very signature J. Crew. We are taking our famous J. Crew items and making them miniature," said Margot Brunelle, J. Crew's head of marketing. Among the items she cited were cashmere in turtlenecks, crewnecks and cardigans; rugby shirts; navy blazers; pique polos, and seersuckers. She said several of the products have nicknames like "critter" pants that are embroidered with little puppies, ballet slippers, apples or other things, whereas adult chinos have martini glasses, dogs, pineapples, umbrellas or other quirky elements on them. There are also "Wellies," or kids' Wellington boots, "mini Montauk" totes, "beach fleece" for little hoodie sweats and "the pouf" skirt. The collection features some new argyle patterns and color combinations; exclusive prints and fabrics from high-end mills including a Japanese silk seersucker, and Liberty prints. The silk seersucker is from J. Crew's wedding collection and was adapted into a girls' floral dress. There is a boys' version in wool of Crew's men's navy Legacy blazer for dress-up occasions. Cotton-based natural fibers and delicate fabrics such as chiffon are avoided.Sun-washed knits are priced at $14.50 to $29.50, tanks for girls, at $10.50 and $12.50; lightweight chinos, $34.50 to $39.50; party dresses, $52 to $148; party skirts, $36 to $58; cargo pants and shorts, $34.50 to $42, and jackets and blazers, $59.50 to $148."We don't want to take the kids' line into a different direction" from the J. Crew collection, Brunelle added. "That's why we don't have a separate design team. At ages two to eight, children are inspired by what they see their parents wearing. When you go beyond eight, it's a different story."

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