On Wednesday, according to the New York Times, J.Crew “eliminated” nearly 200 positions—175 to be exact—and announced the head of its women’s design team was out, too. J.Crew and its chief executive Mickey Drexler, who previously revitalized Gap and steered the creation of Old Navy, blamed the company’s 10 percent sales drop (and ensuing layoffs) on a sweater called the “Tilly,” which was not a fan favorite and sold terribly.
But in reality, the company’s got about $1.5 billion in debt on its hands and isn’t as successful as the J.Crew Factory stores, where prices are routinely slashed by 50 percent—I know because I shop there. They’re moving Madewell’s designer over to fix things at J.Crew, which is interesting, given that Madewell isn’t exactly a cheap alternative. J.Crew isn’t the only brand feeding the lower-price push; Abercrombie & Fitch, Gap and Aeropostale are suffering too.
Analysts say J. Crew’s costly line is chasing away customers who frequent high-end department stores. Problematically, the strongest growth in the industry has been in the lower end. Discount clothing stores like T.J. Maxx and Marshall’s are thriving. And of Gap’s three brands, its least expensive — Old Navy — has been its strongest performer.
We’re poor, J.Crew!
Contact the author at Hillary@jezebel.com.
Image via J.Crew.