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NEW YORK — Millard Drexler is out to rewrite America’s casual code once again.

The man who catapulted Gap and Old Navy into retail institutions and resurrected J. Crew has been stealthily cooking up a casual brand called Madewell, for a fall launch.

“For me, Madewell is just a fun, stimulating idea,” Drexler said in an exclusive interview on Madewell at J. Crew Group Monday. “But I don’t want to simplify things. We are driven by the creative. We are driven by building businesses.”

Madewell is a women’s-only, item-driven line focused on “timeless and ageless” casual merchandise. The attitude is clean, modern and affordable; items are priced 20 to 30 percent lower than J. Crew, and the intent is to provide value without being too volume-driven. The bulk of the business is jeans, chinos, T-shirts, woven shirts, sweaters and fleece sweatshirts, and about 80 percent of the assortment is less than $100. Most of the key items are in the $48 to $78 range.

The first Madewell store will open in NorthPark Center in Dallas in August. It will be followed by another in a major Los Angeles shopping center around that time and a third store opening is being considered this year. Their locations will be announced as leases get signed. Though they are being developed by J. Crew, no connection will be apparent to consumers, officials said.

At J. Crew Group headquarters here, Madewell has been kept secret to the outside world. The project has been in the works for about a year and has been confined to about 1,000 square feet of office space and a team of about 10 employees. The project is being lead by Drexler, the chairman and ceo of J. Crew Group, and Liz Meltzer, head of Madewell merchandising and planning. The team also includes a chief designer and an associate designer, a production head and some planning and merchandising personnel.

Ultimately, Madewell could represent a broadside against Gap, Abercrombie & Fitch, American Eagle Outfitters and other specialty retailers embedded in casual. That’s because whatever Drexler touches tends to take off, and now seems like the right time to move onto a bigger field than where J. Crew plays. The J. Crew business, after floundering for years, has been on track for several seasons and the product seems right, while some other specialty retailers, notably Gap, continue to struggle.

This story first appeared in the May 2, 2006 issue of WWD. Subscribe Today.

Also, J. Crew has bowed its Crewcuts children’s business, with a Crewcuts store in NorthPark opening today, and the J. Crew Group is positioning itself for a public offering, perhaps as soon as this year. A company that shows it’s adept at start-ups can be appealing to Wall Street investors.

With Madewell, there’s a market opening Drexler apparently sees, though it’s as much about creating a market as seizing one.

Is he thinking big with Madewell, even bigger than the $950 million J. Crew? “I can’t predict what’s going to happen,” Drexler said. “Everybody in the world, including Wal-Mart, started with one store. If I dream about it, I like to think [Madewell] could be a big business. But right now, we look at it day to day.”

Still, he’s acutely aware of the potential. “The lower the price point in a business, the bigger it can be,” he said.

With Old Navy, which he launched in 1994, he never envisioned it would grow that fast, faster than Gap ever did, and surpass Gap in volume.

At 3,000 square feet, the Madewell stores will be about half the size of J. Crew stores. While noting that it initially will sell only women’s, Drexler hinted other categories could be part of the assortment. No catalogues or e-commerce are being planned. There will be a Web site soon for content-only, but it eventually could be transactional.

Years from now, the Madewell story — which Drexler a couple of times referred to as “the script” — could be a much different one. He stressed that the brand will evolve, which is a fact of life in the fashion business. “We are going to school with it,” he said, meaning as things are learned, changes will be made. “Any fashion business must constantly evolve — design- and style-wise.”

Drexler would not discuss much in the way of specifics on how he discovered the Madewell name, but mentioned that a friend made him aware of it. In fact, the Madewell label was brought to his attention before he joined J. Crew in December 2003. Madewell is a former workwear company in New Bedford, Mass., dating back to 1937.

According to J. Crew’s 10K filing posted last week, Drexler purchased the name and leases it to the J. Crew Group for $1 a year, so there is no conflict of interest. Eventually, the Madewell name will be owned by J. Crew Group, in which Drexler has a stake.

“Through my network and travels, I see certain things. This was something a friend told me about,” Drexler said. “I immediately fell in love with the name. I love it. The name did evoke a certain feeling about a business. We think the name is very well related to the concept. I loved the script, the feeling of something old. It created a vision in our mind. But you can’t put in words what you love or like about something. It’s intuitive or instinctive.” With Madewell, the name came before the concept. It’s a little different from the case of Old Navy. As the story goes, the quirky, low-priced concept came first, then the name, after Drexler spotted the Old Navy bar on Rue St. Germain in Paris and felt the moniker was perfect for his new chain.

But while Madewell’s roots are in industrial garb, the new brand won’t reflect this heritage. “The heart of it is very casual clothing,” said Meltzer.

The key categories are T-shirts in various washes, colors and fabrics, priced primarily from $12.50 to $24.50; hooded sweatshirts, either pullover or zippered, priced around $48 to $58; jeans in three core fits and about 10 washes, priced from around $68.50 to $125 for a premium denim; twill chinos, ranging from $58 to $88; corduroy five-pockets, for $68.50; cotton and wool sweaters, priced from $48 to $78; accessories, running from leather bracelets for $18 to a leather camping satchel for $98; ankle boots, for $158, to boots in suede, for $248; wool blazers, ranging from $198 to $248, and a washed twill blazer, priced at $88, to a leather bomber jacket, retailing at $268.

According to Meltzer, “Like J. Crew, we pay a lot of attention to details and color, but Madewell has its own, very distinctive personality.”

Meltzer joined J. Crew Group about a year ago from Calvin Klein, where she was vice president of merchandising for jeans. She worked with Drexler at Banana Republic in the early Nineties as a merchandise manager, and in the mid-Nineties, was a divisional merchandise manager at J. Crew for casual clothing.

“J. Crew runs from weekend to wedding, whereas Madewell is very focused on key categories and key items,” said Margot Brunelle, head of marketing for J. Crew Group. “We don’t see it competing with J. Crew.”

The origins for the new business were “not about research. It’s about creating the best pair of jeans and chinos,” Brunelle said. She also said, “We feel age does not describe a customer type today. This is about real, honest product. There’s nothing gimmicky about it. It’s not logoed. There’s just the Madewell label inside.”

She cited the differences Madewell will have compared with other casual lines, which she said often emphasize layering and are very young in appeal. “Madewell is not about age. We are not specific in that way. We are not going after the teen market.”

She called the line wear-now and “not girly, not trendy or tricked out. It’s timeless casual clothing with a great attitude.”

Asked about the look of the Madewell stores, Drexler said, “I hope the store looks good 20 years from now. They will be timeless, simple and hopefully the merchandise will speak for the style, not the architecture.”

“They will be very easy to shop with a focused assortment,” Brunelle mentioned, with T-shirts on one side of the store, jeans on another. Through display, the stores will instruct customers on how to put the pieces together. She added that they will have “a boutique feel and be highly organized.”

There will be no ads, at least at the outset, but as a teaser to create some buzz, Madewell will sell some of its product starting at the end of June at the Scoop store on 14th Street here. Two years ago, Scoop started selling certain J. Crew men’s shirts, and Drexler liked the arrangement. With Madewell, it’s a way to test the products before Madewell stores open, and create some preopening buzz, as well.

Why not make Madewell-type product under the J. Crew label? “J. Crew is a lot more of a lifestyle business, from wedding to swimwear to work,” Drexler explained. “J. Crew is more expensive. We felt that, to speak to a focused piece of the business, we needed a new entity.”

He emphasized Madewell has “a little more edge and is skewed slightly younger, but it’s not teenage.”

“We are not doing this because our company is too large and needs another rollout strategy,” Drexler stressed. “There is certainly enough casual clothing out there. We are doing this because we love the idea. In my mind, anything in the fashion business that is exciting or good does reasonably well over time.”