NEW YORK — J. Crew Group Inc. has joined the wave of companies making cuts that’s permeating the industry.
This story first appeared in the March 2, 2009 issue of WWD. Subscribe Today.
On Friday, the company eliminated 95 positions and suspended 401(k) matching contributions and merit-based wage increases for the entire workforce, both through 2009. The workforce reduction is primarily at J. Crew’s New York office and in field offices and distribution centers. They include positions that are currently unfilled.
The cuts are expected to generate about $40 million in annualized pretax savings.
Millard “Mickey” Drexler, J. Crew’s chairman and chief executive officer, stated, “As we are all aware, we are operating in a very tough economic environment. This has required us to make some difficult decisions, which we do not take lightly, but feel are necessary to ensure we remain competitively positioned over the long term. However, we believe our financial flexibility, our team and our focus on quality products and the customer will enable us to navigate these turbulent times.”
The company declined to comment on whether further reductions could happen. Neiman Marcus Group and Lord & Taylor disclosed hundreds of job cuts on two separate occasions in recent months. Saks Inc. decided to make one announcement disclosing 1,100 layoffs and said it was unlikely further cuts would be made this year.
J. Crew said affected associates are getting severance and related transition assistance, and that it would take a pretax charge of about $1.5 million in the first quarter of fiscal 2009 for severance payments and related costs. Additional efforts to create efficiencies are under way in areas such as supply chain, store operations, real estate and catalogue circulation.
Previously, the retailer announced a 25 percent reduction in capital expenditures for fiscal 2009.