NEW YORK — J. Crew Group Inc. plans for robust store growth this year, despite the declines in mall traffic besetting the industry.
This story first appeared in the March 26, 2014 issue of WWD. Subscribe Today.
The program calls for 20 J. Crew stores, 20 factory outlets and 20 Madewell openings, J. Crew officials said Tuesday during a conference call reviewing the fourth quarter and 2013 results.
Among the J. Crew openings will be four in Canada, two in London and two in Hong Kong as the company proceeds with international growth. The company currently operates 266 J. Crew stores, compared to 248 a year ago. Last quarter, these stores added shipping capability to help fulfill online orders.
Madewell was singled out as a strong performer last year, posting a 38 percent increase in volume to $181 million and opening 17 stores, bringing the business to a total of 66 units. Madewell.com also experienced significant growth.
J. Crew officials see mall traffic as “a bit more challenging than outlet traffic.” The company currently operates 122 factory outlets, compared to 106 a year ago.
Store sales in 2013 increased 6 percent to $1.64 billion on top of an increase of 21 percent in 2012.
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The company is also experiencing robust growth online, as direct sales increased 16 percent last year to $755.9 million following an increase of 19 percent in 2012. The direct business, which accounts for 31 percent of total revenues, includes jcrew.com, jcrewfactory.com, the J. Crew catalogue, madewell.com and the Madewell catalogue.
In 2013, total revenues increased 9 percent to $2.43 billion, with comparable company sales increasing 3 percent, on top of an increase of 13 percent in 2012. Men’s wear and accessories have been performing better than the women’s business.
J. Crew expects to spend between $145 million and $155 million this year on new stores as well as warehouse and corporate office enhancements and information technology.
As reported, J. Crew’s net for the fourth quarter ended Feb. 1 fell 42 percent to $5.9 million from $10.2 million in the year-ago period. The net was brought down by a $6.1 million dividend-equivalent expense.
However, adjusted earnings before interest, taxes, depreciation and amortization rose 7.5 percent to $75.7 million from $70.4 million in the fourth quarter last year.
Revenues in the quarter increased 7 percent to $686.2 million, from $642.9 million, with comparable company sales increasing 3 percent.
During the conference call, there was no word on the company’s future ownership. Talks to be acquired by Fast Retailing Co. Ltd. reportedly recently broke down, suggesting that J. Crew could proceed with an initial public offering with Goldman Sachs. TPG and Leonard Green & Partners bought J. Crew for $3 billion in 2011, taking the company private.