J. Crew Group last week eliminated dozens of positions at its New York corporate headquarters, as the retailer continues to cut costs to improve its balance sheet in advance of a potential initial public offering of its Madewell brand expected this year.
Two sources said the latest cutback occurred at the J. Crew brand only, and that about half of the positions eliminated were filled; half unfilled. The precise number of cuts could not be learned, though one source close to the company said, “Hundreds would not be accurate. It was under that.” There have been other streamlinings, including two years ago when about 250 jobs at headquarters were knocked out. J. Crew has also been closing underperforming stores.
“Hiring is not frozen. The company is continuing to invest,” the source added. The J. Crew Group did hire a chief customer officer this month, but is still searching for someone to fill the role of chief executive officer. The position has been vacant since Jim Brett left last November, and the company is being run by Michael J. Nicholson, who is serving as interim ceo of J. Crew Group.
“As part of our continued work to strengthen J. Crew’s business, we’ve reduced a limited number of filled and open positions primarily at our corporate headquarters,” a spokeswoman told WWD on Friday. “These are never easy decisions, but they are a result of our ongoing efforts to strengthen our balance sheet, position J. Crew for long-term success and maximize the value of the Madewell brand for future growth.”
Beside a Madewell IPO, the parent company is considering other strategic alternatives. But an IPO would create a Madewell stand-alone business plan, help de-leverage the J. Crew Group, potentially give a new lease on life to the troubled J. Crew brand, and eventually pay a return to the company’s private equity backers, TPG Capital and Leonard Green & Partners. J. Crew Group has $1.7 billion in debt, the biggest portion of which comes from the company’s $1.4 billion term loan due in 2021.
WATCH: Cindy Crawford Reveals How She Became a Supermodel and Business Mogul