Store logo signOpening of J Crew Store in Regent Street, London, Britain - 08 Nov 2013

J. Crew is out to create a “new American style.”

That’s how Jim Brett, chief executive officer of the J. Crew Group, on Tuesday characterized the essence of the upcoming relaunch of the J. Crew brand, just after the company reported that it narrowed its losses in the second quarter due to sustained steady growth at Madewell and improvement at J. Crew.

The J. Crew brand has been struggling for several seasons, but last quarter hit a “watershed” mark by returning to positive comp sales growth for the first time in four years, Brett said.

The second-quarter loss shrunk to $6.1 million compared with $18.5 million in the year-ago period, while operating income rose to $33.3 million compared with $4.8 million in the second quarter last year.

The company said this year’s second quarter reflects a benefit from a lease termination payment related to relocating the corporate office from Greenwich Village to lower Manhattan, and transformation costs.

Total revenues increased 3 percent to $587.6 million. Comparable sales increased 5 percent. By brand, J. Crew sales decreased 5 percent to $428.9 million, but rose 1 percent on a comparable basis.

As expected, the Madewell division did much better, with sales up 29 percent to $121.7 million and comparable sales increasing 28 percent.

Brett’s goal for Madewell: make it a $1 billion brand. Madewell men’s wear will launch soon. “We expect Madewell to be the leading premium denim brand in the world,” Brett said.

The relaunch of the J. Crew brand is set for Sept. 10. “The focus is on classic, enduring American style reflected with a few key aesthetics,” Brett said during a conference call.

New subbrands will arrive reflecting different aesthetics such as New England prep; relaxed natural and soft-muted colors of the West Coast, and a new value equation with a “youthful spirit” at the J. Crew Mercantile value division.

In addition, there will be “a bolder expression of fashion in a newly designed J. Crew Collection,” Brett said. “Color will return, with a breadth of fits, sizes and proportions and good, better, best prices.”

He expressed the group’s need to become “world-class listeners” to better understand customers. J. Crew should cater to “individual style” and is building “user-generated content with the hashtag “#meetmycrew.”

“To express one’s style, you don’t need to carry every trend and aesthetic,” Brett said.

In citing J. Crew Group’s “aggressive strategic growth agenda,” Brett said he sees “bottom-line profitability in the coming year; that a third of total assortment will be offered in extended sizes in the third quarter; that wholesaling J. Crew and Madewell to Nordstrom continues to grow and the distribution is widening to other large retailers around the world including Hudson’s Bay Co., Liverpool, Galeria Kaufhof, John Lewis and Galeries Lafayette, among others.

Additionally, franchise partnerships are being formed including in the Middle East and Asia.

“All of our brands will be purpose-driven with the goal of representing unity and diversity,” Brett said, explaining how the company has adopted a “purpose-driven model” revolving around “dignity, sustainability and advocacy.” Among the activities, encouraging recycling clothes and supporting the Girls Inc. and Charity: Water organizations.

Touching on brick-and-mortar, Brett, who succeeded Mickey Drexler as ceo a year ago, said, “We continue to rationalize our fleet but will opportunistically test concepts,” such as the new J. Crew men’s store in the DUMBO section of Brooklyn and the Madewell Commons store in Austin, Tex., which “embraces local culture and activities.”

Other turnaround efforts have revolved around expense-cutting, increased digital penetration, sourcing changes involving cost negotiations and emphasizing its most iconic J. Crew products such as rugby shirts and roll-neck sweaters.

“As we report an acceleration in comparable sales growth for the company to 5 percent, we also celebrate a watershed moment as we return to positive comparable growth in our J. Crew brand for the first time in four years and continued stellar performance at Madewell with 28 percent comparable sales growth — which we believe puts Madewell solidly on a path to becoming a $1 billion brand,” Brett said in a statement.

“Achieving these results prior to our planned Sept. 10 launch of the ‘New Crew’ is a reflection of the foundation that has been built over the last year,” Brett added. “Our financial results reflect revenue growth, continued expansion in gross margin and a marked shift in expense from significant costs last year that were needed to restructure our business, to planned investments this year in support of our aggressive strategic growth agenda — which we expect will allow us to scale the business and return to bottom line net profitability in the coming year.”

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