Millard “Mickey” Drexler has stepped down as chairman of J. Crew Group Inc. and is being succeeded by Chad Leat, another member of the J. Crew board.

Drexler, the former chief executive officer of J. Crew, is retiring to devote his full time to Drexler Ventures LLC and other interests. Drexler Ventures was launched in July 2017.

Drexler Ventures invests in and advises emerging brands, including Outdoor Voices, which sells men’s and women’s activewear, and Warby Parker, the eyewear company that for every pair of eyeglasses sold, another is donated to a needy person.

Drexler owns 10 percent of the J. Crew Group, which is principally owned by TPG Capital and Leonard Green & Partners.

With his departure from J. Crew, the 74-year-old Drexler will continue to hold onto his stake and also serve as a strategic adviser to J. Crew’s office of the ceo and the J. Crew Group board.

The office of the ceo is running the company and is composed of Michael Nicholson, president and chief operating officer; Adam Brotman, president and chief experience officer; Lynda Markoe, chief administration officer, and Libby Wadle, president of Madewell. The company has been searching for a new ceo since Jim Brett left the position in November after only 15 months on the job. The company’s official statement was that Brett left by “mutual agreement.” Brett succeeded Drexler as ceo in July of 2017.

Millard “Mickey” Drexler  GARETH JONES

On Friday, Drexler said, “It’s been a privilege to have had more than 15 years with J. Crew Group both as ceo and chairman of the board. J. Crew and Madewell have been long admired as iconic American brands, and I am thankful to have been a part of their evolution throughout the years.”

New chairman Leat said his priorities will be “to ensure that the J. Crew brand moves quickly to capitalize on recent momentum and to support Madewell’s growth toward becoming a $1 billion brand, while also working with the board to identify strong, permanent leadership to guide the company in its next chapter.”

Leat, who has served as a director of J. Crew since January 2017, thanked Drexler for “years of invaluable contributions to the business and to the J. Crew brand” and for his “continued strategic counsel” to the board and the office of the ceo.

Leat is a retired vice chairman of Global Banking at Citigroup. He has worked in the markets and banking for 30 years and is considered an innovator in corporate credit and mergers and acquisitions finance. He built and led numerous successful and profitable businesses at Citigroup, JP Morgan Chase and their predecessor companies. Leat is on the boards of Norwegian Cruise Line and TPG Pace Holdings Corp. and serves as chairman of MidCap Financial plc.

 

Chad Leat 

Drexler, considered among the few “merchant princes” in the retail industry, is often credited with creating “casual chic” by catapulting Gap Inc. into a household brand name in the Eighties and Nineties and generating billions of dollars in revenues. While there, he launched Old Navy, which continues to be the main engine that keeps Gap Inc. in the black. He also launched the GapKids division. Drexler spent 18 years at Gap Inc., becoming president in 1987 and ceo in 1995. During his tenure, the company grew from $400 million to $14 billion in sales.

But after a string of declines at Gap, Drexler left the company. He has bluntly stated he was “fired.” Ironically, not long after he left, sales gains surfaced, which could be attributed to programs Drexler put in place before he was ousted.

In 2003, Drexler invested in and became chairman and ceo of J. Crew Group. He founded Madewell in 2006, a label derived from an old workwear factory in New England. Earlier in his career, Drexler served as president and ceo of Ann Taylor from 1980 to 1983.

When he joined J. Crew, the brand was a preppy catalogue, mostly sold in the East. While maintaining a loyal customer base, the brand had lost its appeal. TPG Capital and Leonard Green & Partners acquired J. Crew in 1997 and brought Drexler in to work his magic and put the brand back on the growth track. Under Drexler’s leadership, J. Crew grew into a leading global fashion brand, but for much of the last three years, the J. Crew brand floundered with fashion misses and pricing concerns, while Madewell has been soaring. Compounding the situation was management’s lack of attention to technology advancements disrupting the industry. But last year, the J. Crew brand launched its first loyalty program, a platform for third-party brands and implemented several changes to its web site. The company has also been wholesaling the J. Crew and Madewell brands, primarily to Nordstrom.

Last quarter, some improvement showed. The group narrowed its loss for the third quarter to $5.7 million from a loss of $18.4 million in the year-ago period, while adjusted earnings before interest, taxes, depreciation and amortization were $53.6 million compared to $68.4 million in the year-ago quarter. Officials cited top-line sequential improvement at the J. Crew brand, growth at Madewell and growth in wholesaling. The group reports its fourth-quarter results in March.

J. Crew Group operates 227 J. Crew stores, 127 Madewell stores, jcrew.com, jcrewfactory.com, madewell.com and 175 factory stores, including 42 J. Crew Mercantile stores.

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