Over the summer, J. Crew posted terrible quarterly results and tried to pin much of the blame on a terrible sweater named Tilly. But it’s quite clear the company’s troubles run deeper, and they’re not going away.
The retailer just released its Q3 numbers, and they weren’t pretty, says Quartz. Sales at the J. Crew brand fell 9 percent, and revenues for the company as a whole slipped 6 percent to $619.4 million. (Madewell sales increased, though!) If that wasn’t dismal enough (it was), there’s the matter of the “goodwill writedown.” The Wall Street Journal walks you through it:
Technically, J. Crew wrote down the value of the goodwill associated with its stores by 57%, or $536 million, while leaving the portion assigned to its online operations unchanged. It also wrote down the value of the J. Crew brand name by $145 million.
Goodwill broadly refers to a company’s intangible assets, like reputation and customer loyalty, and often reflects the premium paid for a company in an acquisition.
As Bloomberg explains, the move is essentially an admission the J. Crew name ain’t worth what it once was. Nor is it surprising, after months of coverage of missteps ranging from specific unsuccessful items to a general shift away from affordability. The New York Times summed up several problems back in June: “Boxy styles. Strange sizing. And customers who loathe paying full price when many items are either quickly discounted or can be bought online for less.”
However, let the record reflect that fucking sweaters aren’t entirely innocent, here: “An unseasonably warm fall hasn’t helped anyone who sells sweaters—look no further than Banana Republic, which also suffered a 12% dip in comparable sales this past quarter,” Business Insider notes.
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