NEW YORK – J. Crew Group, in a major reorganization triggered by difficulties at its J. Crew brand and recent disappointing financial results, is eliminating 175 jobs from its corporate headquarters and has named Somsack Sikhounmuong head of women’s design for the J. Crew brand.
Sikhounmuong succeeds Tom Mora, who will be leaving the company.
The 175 jobs represent between 12 and 13 percent of the total workforce at the headquarters here.
Asked if additional layoffs were planned going forward, a J. Crew Group spokeswoman said, “Not at this time.”
For the past two years, Sikhounmuong has been the head of design for Madewell, which has been on a roll, while the J. Crew brand has been struggling, mostly with its women’s apparel, while men’s wear has performed well. Prior to Madewell, he held various design positions at J. Crew from 2001 to 2012. Sikhounmuong is expected to bring a fresh approach to J. Crew, and will continue to report to Jenna Lyons, president and executive creative director of J. Crew Group.
Lyons’ role remains unchanged. She oversees the creative vision for the overall company, and is involved in everything from the design of the collections, to the catalogues, copy and windows. While she is considered very hands-on in directing the design of the collections, she is not a day-to-day designer.
Joyce Lee has been named head of women’s design for Madewell. Lee has been a senior member of the Madewell design team for seven years and will continue to execute that brand’s design vision, the company said. Prior to Madewell, Lee held design positions at Michael Kors and Marc Jacobs. She will now report to Lyons.
“We are making meaningful and strategic changes across our organization to better position us for future growth. While many of these decisions were difficult, they are necessary,” said J. Crew chairman and chief executive officer Millard “Mickey” Drexler. “With Somsack in his new role, we will continue to focus on making critical improvements to our J. Crew women’s assortment including fit, design aesthetic and styling. We know what needs to be done and while many of these initiatives take time, we have a committed team in place to make it happen.”
Other strategic and organizational changes are being made in store operations, production, sourcing, and merchandising. “These changes reflect J. Crew Group’s commitment to long-term growth, and at the same time, streamline operations to support its omnichannel business and reduce overall expenses,” the company said in a statement. One change involves shifting the head of operations for Madewell to heading up operations for J. Crew stores, J. Crew Direct and J. Crew factory outlets.
The last time J. Crew had cutbacks was in 2008, primarily involving freezing unfilled positions and related to the Great Recession. The current round of layoffs involves filled and unfilled positions.
“We don’t feel good about seeing people leave, but it’s necessary to right-size the organization for the business, streamline operations across the board to run as efficiently as possible, leverage existing talent, and stay focused on our long-term growth initiatives,” the spokeswoman said.
Last week, in reporting disappointing results for the quarter ended May 3, J. Crew indicated that it doesn’t expect things to get any better for at least the rest of the year. The retailer wrote down the value of the Crew brand, posting $533.4 million in noncash impairment charges and reported a net loss of $462.4 million. Sales at J. Crew decreased 5.2 percent to $508.7 million, but at Madewell jumped 32.6 percent to $61.9 million.
Drexler pointed to sweaters and knits as the culprits, though he also noted that J. Crew Collection, the most expensive piece of the business, was over-marketed. “Frankly, there are many things that we do well and the lion’s share of our women’s issue is isolated to knits and sweaters,” Drexler said during a conference call last week.
He called those two categories “outsized” and said going forward, “we’ll be tightening our assortments and investments and mix and our sweaters will reflect more classics.” It is believed that sweaters and knits represent 25 to 30 percent of J. Crew’s business.
Drexler said pants have Crew’s better fits and styles; tops are less boxy and more tailored, and J. Crew’s “iconic classics are coming back in full strength.”