The End of J. Crew Was Inevitable

By Hazel Cills | May 6, 2020 | 4:00pm

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On Monday J. Crew officially filed for bankruptcy. It makes the store the first official major brand casualty of the covid-19 pandemic, but J. Crew’s problems existed long before retailers were required to close their brick and mortar stores.

Since 2011, J. Crew has been flailing under the weight of nearly $1.7 billion in debt, the result of a $3 billion buyout that took the brand private and placed it in the hands of two private equity firms. The company has streamlined with waves of store closures and job eliminations over the past several years, and the success of the company’s sister brand Madewell, which has eclipsed J. Crew in both sales and style, has only underlined its problems. Even though J. Crew tried to rebrand itself again and again, jumping from well-designed smart staples to expensive statement pieces, it has failed to capture loyal customers. The cashmere blend cardigans and trendy work ensembles that were once the store’s specialty couldn’t stabilize a brand in an ongoing identity crisis. The preppy customer that J. Crew spent decades cultivating disappeared and no J. Crew woman materialized in her place.

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J. Crew’s downfall began when it strayed from the clothes that made the store a household name. The brand first found success through catalogs. J. Crew grew out of the 1940s company Popular Merchandise, Inc., which sold clothing door to door like Avon makeup or through catalogs. In the early ’80s executives at Popular Merchandise decided to focus on what J. Crew founder Arthur Cinader called “classically oriented women’s clothing,” to cash in on the rise of brands like Lands’ End.

The catalog first appeared under the J. Crew name in 1983, with “crew” chosen in reference to the sport, and the company’s leisurewear found a customer base in upper- to middle-class consumers. The design of the brand was anchored by Cinader’s daughter Emily Scott who became J. Crew’s design chief and president of the catalog in the early 1990s.

“She has a very precise notion of esthetics; when she envisions a sweater or a pair of chinos, she has firm ideas about the placement of buttons, the lengths of the cuffs and the texture of the fabrics,” a 1997 Observer article on Scott reported (it also included an anecdote about Scott screaming at an assistant for not buying the right Halloween pumpkin for the office). “I know I am tough to work for,” she said.

Scott kept J. Crew basic but elegant. She based her designs for the brand on “the clothes she had in her closet after college” and described J. Crew as “about all-American style, comfort, freedom.” The unadorned brand specialized in simple designs with no logos like mix and match swimsuits, cashmere sweaters, and khaki. In catalog pages from the 1990s, freshly tan, WASPy models with cardigans slung over the shoulders smile from country club lawns or sip hot cocoa in a ski chalet. J. Crew sold a patriotic Ralph Lauren look for much less, and it sold well, drawing in $320 million in sales in 1989. By 1990, J. Crew had a flagship store in New York’s South Street Seaport.

While J. Crew looked the part of a stable, successful company, by the late 1990s and early 2000s there were problems on the inside. The family-owned J. Crew changed ownership in 1997, when Cinadar and Scott sold a majority stake in the company to private equity firm Texas Pacific Group for $500 million. The deal had issues: initially, that number was supposed to be $560 million but J. Crew’s sales were in decline and TPG demanded a lower price, the New York Times reported. The deal ultimately foreshadowed the problems of J. Crew to come: J. Crew lost $11 million in 2001 followed by a $40 million loss in 2002.

Then came the brand’s so-called savior, former Gap CEO Mickey Drexler. He came to the company in 2003 with an aggressive vision to bring back the preppy staples that made J.Crew iconic, to revive a languishing brand without a clearly articulated point of view. But he introduced the high/low aesthetic that became J. Crew’s signature well into the 2000s: $400 blazers appeared alongside $50 shorts, and then those $400 blazers turned into $1,500 cashmere coats.

Suddenly, J. Crew wasn’t just playing the part of an upscale brand, but trying to become one. “I look at companies as price-players or quality-players,” Drexler told New York. “The only way to go with J.Crew was quality.” It worked, and J. Crew expanded into children’s wear and bridal. The catalogs, dubbed “Style Guides,” began to look more like Vogue editorials than advertisements. In 2006 J. Crew reported it had posted eight quarters of growth for same-store sales. The company went public that same year. In 2009, Michelle Obama wore J. Crew to her husband’s inauguration and would continue to do so over the course of his presidency.

As Drexler was bringing the brand back to life, he was building a ladder for designer Jenna Lyons, who started at the company as a menswear designer. Lyons eventually replaced Drexler as she climbed from designer to creative director in 2008 and, eventually, president in 2010. Drexler helped transform Lyons into a recognizable designer with a cult fanbase, both working together to solidify J. Crew’s pairings of aspirational, daring fashion (a sequined pencil skirt, leopard pony hair heels) with accessible basics (denim shirts and t-shirts.) Fawning magazine feature after feature was dedicated to Lyons’s aspirational personal style and the store was suddenly known for its fashionable experimentation. It seemed to be working: in 2011 J. Crew’s total sales were just under $2 billion, the Guardian reported in a 2012 profile of Lyons.

Lyons, with her tailored suits and statement glasses, became a figurehead for the brand as if she were running a high fashion label, not a chain store in a mall next to Forever 21. While she successfully created an image for what the J. Crew woman looked like, it always felt out of step with reality. In 2016 she appeared at the Met Gala with Lena Dunham, having appeared on an episode of Girls a few years earlier, in a pair of matching tuxedos. Though Lyons was a favorite of the fashion world, her vision for J. Crew never translated into actual sales.

Into the 2010s, Lyons’s frivolous approach began to crumble, especially as Zara and ASOS were delivering high-fashion moments to customers by cranking out affordable, straight-off-the runway knock-offs. Sales for women’s apparel and accessories were slipping and customers complained about J. Crew’s sizing and quality issues. The brand went from a net income of $35.4 million to a reported loss of $607.8 million in 2014, CNBC reported. In 2015 Drexler vowed to bring back basics, saying that the store “clearly got sloppy when you miss the fundamentals that you need to have.”

As the brand was pushing upwards, elevating clothing for consumers into high-fashion territory, the retail landscape was trending downwards into comfort. Like most brick and mortar retailers in the past decade, J. Crew couldn’t compete with online retailers like Amazon, a broader problem for the industry at large. (That it was also loaded with debt by a private equity firm puts J. Crew in line with companies like Toys ‘R’ Us, which also floundered under private equity ownership.) But J. Crew’s out-of-touch aesthetic fundamentally misunderstood what women actually wear and what they’re willing to spend on it. Gold sequined harem pants, it seems, didn’t appeal to shoppers. For a brief moment, J. Crew tried to tap into the $97 billion market of athleisure, but with no success.

Lyons stepped down in 2017 and the totality of her role, overseeing all design aspects and brand image, was splintered across departments once again. Since then J. Crew sales have continued to nosedive, leading to its bankruptcy today. The store, with its chinos, blazers, and leopard pencil skirts, has no woman to sell to. Neither does Banana Republic, or The Limited, or Abercrombie & Fitch. Everything J. Crew was selling, luxury for less (but not that much less), the bookish formality, the unified aesthetic, and designer loyalty, just doesn’t reflect what customers are actually purchasing. The J. Crew woman doesn’t exist anymore, and given the ups and downs of the company across its lifetime, maybe never did.