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J.Crew’s Overseas Push: Retailer Going Global on Net-a-porter

J. Crew’s products will be featured on Net-a-porter’s Web site starting in mid-May.

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J. Crew’s boyfriend fatigue jacket and collection cocktail dress.

Courtesy Photo

Natalie Massenet and Millard “Mickey” Drexler.

Natalie Massenet and Millard “Mickey” Drexler.

Courtesy Photo

J. Crew is going global with Net-a-porter.com.

In its first major push overseas, the retailer’s products will be featured on Net-a-porter’s Web site starting in mid-May. Currently, J. Crew operates stores only in the U.S. and is available in North America and Japan through its catalogues and Web site. However, the brand’s recognition factor and distribution could grow considerably since Net-a-porter ships to over 170 countries. J. Crew’s growth via Net-a-porter will also depend on the degree the Web site plays up the brand’s merchandise.

“When we go live in May, this will be announced to our millions of subscribers, celebrated with a cover and a story in our weekly magazine. It is going to be a big deal for us,” said Natalie Massenet, the founder and chairman of Net-a-porter.com.

Net-a-porter, which is strictly women’s and offers over 300 designer and contemporary labels, will carry an edited selection of J. Crew’s women’s apparel, shoes and accessories. In addition, J. Crew will provide some exclusive styles and colors to the London-based site.

“This wasn’t like a well-planned out, thoughtful strategy other than we love what Natalie does and hope she loves what we do,” said Millard “Mickey” Drexler, chairman and chief executive officer of J. Crew Group Inc.

There’s a bit of irony to the deal. Drexler has been outspoken about the designer business and retailers that sell the merchandise, at times saying the sector is overpriced while characterizing J. Crew’s offering as designer-quality and style though lower priced. But in disclosing the plan with Net-a-porter, Drexler was bullish about the Web site, putting it in a class by itself. “I think Net-a-porter is by far the best in the world at what they do. Their site, their packaging, their assortment, their editing — it does not get any better,” Drexler said.

The arrangement with Net-a-porter will provide a new playing field benchmarking J. Crew’s performance relative to luxury designer labels. The two companies were brought together by “our non-agent agent, Stephanie Greenfield” six months ago, Drexler said, referring to the former co-owner of the Scoop specialty chain where, in the past, J. Crew has occasionally sold some exclusive styles. J. Crew has also wholesaled some men’s wear to Ron Herman in Los Angeles, but Net-a-porter marks the first major distribution strategy outside of J. Crew’s own stores, catalogues and e-commerce. Net-a-porter will buy the J. Crew goods, owning them like it does other merchandise from designer collections.

Asked where he thinks demand for J. Crew products will be greatest, Drexler replied, “I wouldn’t know. This is new for us. I am guessing the U.K. I know we have enormous demand throughout the world. What we do is not country centric.”

Massenet said she expects the U.K., the Middle East and the Far East will be good J. Crew markets, though she added, “The days of geographical barriers on fashion are over. Consumers are seeing J. Crew in all the fashion magazines mixed in with designer labels.

“We have been having a lot of fun with Mickey and Jenna” Lyons, J. Crew’s creative director, she added.

Net-a-porter’s buy ranges from 50 pounds, or $77.43 at current exchange rates, for a bikini top to 1,000 pounds, or $1548.68, for a bridal dress, and in between “cute little shoes, designed jewelry, a rainbow assortment of cardigans….There will be close to 50 stockkeeping units for the launch but we are working on a rolling offer,” said Massenet.

In its official release, Net-a-porter said the range is expected to grow quickly to over 90 different designs including evening and day dresses, chinos, miniskirts, jumpsuits, cashmere sets, boyfriend shorts, cotton T-shirts, jackets, desert boots and statement jewelry. J. Crew’s men’s and children’s wear will not be on the site.

“It’s going to be fun,” added Drexler. “They present clothes in the most elevated and cool way — more than any site we know.”

Drexler said he couldn’t predict how much volume J. Crew might do with Net-a-porter. But Massenet said, “J. Crew has the potential to be one of our biggest brands if we played this right.”

“There is no pressure on any of us,” Drexler added. “We didn’t sit down and map out a big strategy.”

Massenet declined to provide details about the exclusives being provided. However, it’s probable the merchandise on Net-a-porter changes more often than other labels on the site since J. Crew, as Massenet pointed out, is faster to generate new product than designers. Net-a-porter sells designer as well as contemporary labels. J. Crew would fall more within the contemporary price range.

It’s not unusual for companies to use data obtained from Web sites or catalogue mailings to determine the best locations for planting stores. But Drexler said, “We’re not looking at this as a bricks-and-mortar indicator. We are doing this for fun, distribution and fashion.” Asked if one day J. Crew might open stores outside the U.S., Drexler said, “I never say no about anything.”

Generally, the J. Crew goods will ship from the factories where they are produced direct to Net-a-porter distribution centers in Long Island City and London.

Net-a-porter.com, launched in June 2000, sells collections from the likes of Chloé, Marc Jacobs, Burberry, Miu Miu and Stella McCartney, and is considered the first Internet site to sell luxury fashion around the globe. It’s also established an Apple iPhone app and virtual trunk shows, has a full-service wedding boutique online and is investing in the expansion of its distribution centers.

For 2008, Net-a-porter, a privately owned company, reported $147.6 million in volume, up from $110.5 million in the previous year. The company says its average order is $1,000, and that there are over 3 million visitors a month, with about 10,000 new customers each month.

The $1.5 billion J. Crew Group Inc. operates 227 stores, 78 outlets, 17 Madewell stores, as well as catalogues and a Web site.

 

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