After seeing its typically loyal customers turning away at the tail end of 2014, J.Crew hasn't yet found relief from its dropping sales. In the three months leading up to May 2, the first quarter of the fiscal year, sales in stores that have been around a full year fell 10 percent. Adding back in revenue from new stores, J.Crew brought in $509.7 million — 5 percent less than it took in for the same period in 2013.
Taking analysts' questions on a Thursday afternoon webcast, CEO Mickey Drexler copped to the fact that these results are disappointing — but noted that the women's clothing business has been hard overall for retailers, many of which are leaning on "rampant discounting" (his words) to drum up sales. He says he took a research trip on Wednesday, checking out J.Crew's competitors, and didn't find the scene looking very good.
"In preparation for getting my head right for this call, I shopped all the competition, and I didn't exactly see a lot of stores where I'd run and buy a lot of women's clothes, frankly," Drexler said.
But this isn't to make excuses. There were things J.Crew definitely could have done better, Drexler says. Whereas the brand struggled with the fit of its clothing last quarter, spring brought about some buying mistakes in its typically lucrative sweater department.
"We didn't have the right cardigan. We had a cardigan, but it didn't fit that well, so that was one problem we had," Drexler says. "The Tippi we didn't buy enough of, and we got too much Tilly, which is a relative of the Tippi."
And stores sold out of the "perfect crew" style too early. While listening to a discussion of Tippis and Tillys is a little funny, they represent a serious side of J.Crew's business: Drexler says a third of sales come from a mix of knits and sweaters.
You might be wondering about Madewell. Things were typically dandy, with sales up 33 percent to $61.9 million. Not bad! Here's hoping J.Crew can pull itself together in the near future.