J. Jill Inc.’s chief executive officer Paula Bennett has plans to grow the company, even in the midst of the tough retail climate facing most specialty chains today.
The retailer on Thursday raised $152 million in its initial public offering. The proceeds will go to its majority owner, TowerBrook Capital, which continues to own more than 50 percent of the firm. The company had planned to raise about $176 million through the sale of nearly 11.7 million shares, but the shares were priced at $13 each, under the planned $14 to $16 range. Shares opened at $12.75 for the first day of trading, and closed at $12.65.
According to Bennett, the company elected to go public this year because, “We agree with TowerBrook that we have a great story delivering consistently profitable growth and a great omnichannel business model. We see a lot of growth ahead. The business is strong.”
Come fall, the company will unveil a new e-commerce platform where consumers can see an outfit and click on it and be able to buy all the pieces at once without having to search for the items individually on the site.
Bennett also addressed an overall retail landscape that has been challenging for everyone from specialty chains to department stores as a result of changing consumer shopping preferences. “The perceived industry headwinds are tailwinds for us,” she claimed.
According to Bennett, the company’s “heritage is in the direct-to-consumer business,” and J. Jill was already in position when consumers began shifting their purchases online. The ceo noted that overall online purchases have been growing at 15 percent annually, but, at J.Jill, “we are growing 25 percent a year,” adding that online represents about 38 percent of total sales. Bennett also touted the firm’s data-analysis capabilities, which have helped it design offerings under the J. Jill brand to meet what its customers want.
The company operates 275 stores, with half in lifestyle centers and the other half in what are considered premium malls. Bennett emphasized that while competitors might be closing stores, J. Jill has identified up to 100 locations where the firm could open stores. She said the company’s store model targets net sales of $1 million, and the company has a “50 percent cash return for opening new stores.”
The company also has two subbrands, Pure Jill and Wearever, that operate as shopping zones within a J. Jill store, although down the road there is the possibility of those brands occupying freestanding sites. To show how the chain is able to grow sales, Bennett said Pure Jill in 2012 did $26 million in sales, and in three years annual volume grew to $100 million.
The company designs its own scarves and jewelry to coordinate with the current merchandise offerings. It offers private-label footwear, as well as those of other brands. While there is a handbag offering or two, Bennett said there are no plans to expand into the category. “The average household income [of our customer] is $155,000, and we’ve learned that she wants a name brand at the higher end of the handbag market,” Bennett said.
Merchandise for spring has featured black and white, and a lot of pink, which has been resonating with the consumer. And while competitors are trying to shorten the speed-to-market response, Bennet said the company works on a 50-week cycle, although it can bring in some items closer to a six-week production cycle when it is for items where it has material on hand.
Bennett explained: “Our customer doesn’t want to be first with fashion. That is our competitive advantage. We start out with what works and review it over a 50-week period. We continually adjust along the way.”