After a long and storied career, Millard “Mickey” Drexler will step down as chief executive officer of the J. Crew Group in mid-July and at that time will be succeeded by James Brett, currently president of West Elm, the home furnishings division of Williams-Sonoma Inc.
Drexler will remain chairman, with Brett reporting to the board of directors and running the company. He also will join the board.
“I am relaxed-ish,” Drexler told WWD in an exclusive interview, of the management handover. “It’s a large day for me. I have been running companies for 37 years and the announcement today is a major change in my life….I am excited about where the team is and the strategic plans we have. There’s excitement about J. Crew and Madewell — brands that people love and admire.
“Jim has a proven track record of pushing for innovation and growing omnichannel brands. He has 25 years of retail experience, not that experience is the issue. He has had various leadership positions at Urban Outfitters, Anthropologie — there’s a proven track record there. You meet a lot of people during this [succession] process who might have impressive résumés but really haven’t had a chance to build a business. Jim has had a chance to build a business.”
Financial sources estimated that Brett has grown West Elm from sales of about $250 million to about $1 billion.
“He’s a merchant. A brand guy,” Drexler continued. “He likes design, and he is a customer person. Those are the four critical elements that go into making a strong leader.”
In a statement, Brett, 48, who has also worked for J.C. Penney and the former May Department Stores Co., said J.Crew has “tremendous opportunity to play a more meaningful role in our lives, and I look forward to leading it through its next phase of growth.” He could not be reached for further comment.
“Brett comes in on Day One as ceo,” Drexler said. “There will be some overlap but not a lot. I want Jim to have the opportunity to work with the team without my interference. New bosses should have the opportunity to be the boss.”
Asked about his new role just as chairman, Drexler said, “I have to work this out. The script has not yet been written. I’m here to mentor, to be helpful, to teach and help strategically when called upon. If you ask me the question in three or six months, I’ll have a much better answer.”
Drexler — who invested $100 million in the company, owns 10 percent and has a strong relationship with the board — said it was his decision to step down. “I have been running companies for 37 years,” he said, noting that he’s 72. He turns 73 in August.
“I am a young, old guy. I have ‘shpilkes.’ I am always in a state of impatience. I have been here for 14 years. I thought it was time to move on and lessen up on the day-to-day. The [succession] plan had been in motion for some time. I told the board a year ago I was ready to step down and move to chairman. We worked together looking for the right talent to lead the next phase of growth….When we found Jim, we knew we had to move quickly.”
Still, Drexler no doubt would have preferred to be leaving as ceo with the company in better condition. Instead, he’s handing over a tough turnaround assignment. J. Crew has $1.5 billion in debt and is fighting with some creditors over a move late last year that put nearly three-quarters of the J. Crew trademark in a separate subsidiary. The retailer’s revenues slipped 3.2 percent to $2.4 billion last year, with a 7 percent comparable-sales decline.
“I think this is the most challenging period apparel retailing has seen maybe ever,” Drexler said. “People aren’t shopping the way they used to shop. There’s a revolution going on out there — an online revolution, but we have been doing a lot of strategic work. We have great people in place and we’re moving forward.”
Asked how much online will represent the total retail industry pie, Drexler replied, “Who knows what the answer is? With the advent of mobile, everyone has a shopping mall in their hands. Over the last 30-plus years, I have seen the industry change, shift and morph. Stores will still have a place but frankly, not the same place. It’s just morphing into a new way, along with the old way. Brick-and-mortar is here to stay.”
Drexler has certainly seen a lot of highs and lows throughout his career. He’s 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 there. While there he launched from scratch Old Navy, which continues to be the engine that keeps the group in the black, and also the GapKids division. He 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 dollars in sales.
But after a string of sales declines, Drexler departed. 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.
Shortly after his ouster at Gap, Drexler invested in and became chairman and ceo of J. Crew Group in January 2003. He founded Madewell in 2006, a label derived from an old workwear factory in New England.
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 had been looking to sell the retailer for several years. Drexler was brought in to work his magic and put the brand back on the growth track.
Within only a few years, Drexler had transformed J. Crew into an internationally recognized, popular multichannel brand with quirky colorful styles, quality fabrics and a hip attitude. The retailer became the poster child for the “high-low” mix of fashion and for pushing the concept of affordable luxury, offering such fabrics as Loro Piana cashmere but at just over $100 retail.
Crew began presenting its collections during the New York Fashion Week, with Drexler holding court at the mobbed scene as buyers and press came to pay their respects. In the midst of the crowd would be Jenna Lyons, the staff designer who Drexler promoted to president and creative director. Lyons became the public face of J. Crew, with the fashion and consumer press lauding her for her “nerd chic” approach and pointing to her style — from her oversize glasses to her mix-and-match patterns. J. Crew’s status was further cemented when former First Lady Michelle Obama admitted to wearing it.
When TPG and Leonard Green brought Drexler in, J. Crew had sales of $600 million. Drexler grew revenues to $2.3 billion and the owners staged one of the most successful retail initial public offerings in history.
In 2011, they took J. Crew private again in a $3 billion deal, but that came with a heavy debt load with principle payments coming due beginning in 2019. Nonetheless, the owners have been able to get back seven times their investment after the last of their shares were sold.
Drexler’s legendary success can be attributed to his own quirky and casual style, hands-on approach and unorthodox management methods — he would blurt out observations to the staff over the company loudspeaker and regularly hold staff-wide meetings to get feedback. He avidly answered e-mails from customers, and he projected an aura that talent was drawn to, and never wore a suit and tie to work except when J. Crew went public in 2006.
Drexler maintained a long-term view of retail, as a brand builder, always pushing, risk-taking and outspoken over industry issues, condemning the rampant price promoting of the past decade as “a race to the bottom” and maintaining that retailers must have control over the product they sell, while the department store model would be challenged by the power of brands. On customer service, he once said, “Most people in service today just don’t care. We listen. A lot of it is good manners.”
While viewed as an obsessive micromanager by some, Drexler once said when he pays attention to details, then everyone at the company does, too.
But despite his merchant prince skills, J. Crew has been in an extended drought like other fashion retailers, hurt by the rise of fast-fashion, discounting and mobile shopping. The company has also suffered from fashion miscues, quality issues and, in recent years as J. Crew’s prices rose more and more, it started lacking a perception of providing value that consumers have increasingly demanded from all brands — all of which Drexler and his team have been attempting to correct.
Among the steps he has implemented to right the assortment: J. Crew renewed the focus on “heritage” products, which include such items and categories as blazers, cashmere, dresses and suitings; linked with New Balance for a women’s active line, though some critics said the move was late in coming given the activewear boom; began wholesaling J. Crew and Madewell to Nordstrom, and reduced some prices.
In April, the top management team was reorganized and 150 full-time and 100 open positions were eliminated, primarily from corporate headquarters to save $30 million annually. Michael J. Nicholson, president, chief operating officer and chief financial officer of J. Crew Group, added responsibility for the J. Crew brand: Lisa Greenwald was named chief merchandising officer of the J. Crew brand, and Libby Wadle became president of the Madewell brand. In further evidence of how deep-rooted J. Crew’s problems were, Lyons left the business, though she had seen her position lessen over the last 18 months with designer Somsack Sikhounmuong, originally with the Madewell division, moving into J. Crew brand and having a bigger impact.
In addition to Gap and J. Crew, Drexler turned around the fortunes of Ann Taylor, which he ran as president and later ceo from 1980 to 1983. He started his career at the former Abraham & Straus and also worked at Bloomingdale’s and Macy’s.
“When I embarked on a challenge of joining a business, I called it fixing a company,” Drexler said, expressing his philosophy on retail. He said he “falls in love with a new vision….I love to build, I love to fix if necessary, to be creative, and I like the mathematics of business. I build teams. I love doing that and I work very closely with the teams. I am teacher, mentor and also a boss at the same time. It’s very gratifying to know that you impacted people’s lives in a positive way.”
Inevitably, Drexler’s departure as ceo of J. Crew Group will be compared to his departure from Gap Inc. But he said there is really no comparison and that unlike Gap, it was his decision to step down at J. Crew. He also defended his tenure at J. Crew, noting the growth of the brand; the launch of Madewell, which is performing well, and that the owners made a lot of money. “There’s no story here. I’ve been working for 37 years and had a spectacular career. I built huge shareholder value. I am ready to move on. We’ve found the right person. I am comfortable with that.”
Asked what he will do next aside from being on the J. Crew board, “Frankly, I don’t know. I’m not used to not being full time. I’ve been reading the sales sheet everyday. I spent my entire career from the day I joined Bloomingdale’s looking at sales sheets. I am still going to be looking at J. Crew but in a different position from a different perspective.”
He’s also on the Warby Parker board, serves as a trustee for Teach for America and was a director of Apple Inc. from 1999 to until 2015.
Would he start up another business? “I think about anything and everything all the time. You can’t stop your brain from thinking.”