06 April 2010

J.Crew and The High End

On April 1, in a move of complete sincerity, J.Crew, the mall-based, mass retailer known for khakis and courderoys and catalogues, revlealed its Fall 2010 Ready to Wear Collection, thus signaling what may just be the beginning of the end for them. In the pursuit of serious fashion, J.Crew will alienate those who love them most - the 20something girls interested in fashion, but supporting themselves.

As with most of my peers, I discovered J.Crew in my pre-teens, sometime in the 1994-1995 calendar year, when internet shopping was limited and catalogues were like little treasures meant specifically for you.  Tiffany's, Delia's, and J.Crew, were the ones I would eaglerly wait for and pretty much memorize on a monthly basis.  J.Crew was a little mature for a 12-year-old, but they were reliable for standards - clean cut shorts in a variety of colors and three different lenths, well made t-shirts, feminine winter coats, and adorable bathing suits.  Sound familiar?  Well, jump to today and the J.Crew of standards and basics is all but unrecognizable. Of course mall stores have to evolve with the styles.  J.Crew has gone from the basics of the Gap, to some combination of Floridian and northeastern preppy, to today's luxe, geek chic. But each reimagining of the brand has come with a higher price point for consumers, slowly morphing out of the 20something price range and into the range of hip 30 and 40something mothers and professionals who fancy themselves creative types at heart. 

Jenna Lyons, Creative Director

They've been in the lifestyle industry for quite some time, but hadn't achieved anything of note till the brand decided to make a celebrity out of its Creative Director Jenna Lyons, the statuesque brunette embodiment of the J.Crew girl. Aside from her compelling looks, Ms. Lyons has proven to be a brilliant designer and brand savvy. She recognized that fashion girls in the know want the classics that her brand isn't old enough to claim, thus instead of reinventing the rainboot, they began selling Hunter boots.  And it has only expanded from there - they've found the best of the preppy classics and given them new life next to the trendy florals, sequins, and mixed prints. Take a look around the site and you'll find Barbour coats, Selima glasses, Essie nailpolish, Timex watches, and Ray Ban aviators. She's made J.Crew a highly focused department store. I wouldn't be the least bit surprised if all of a sudden the site started promoting Waterford brandy glasses.

So far, everything is working. Unlike the retail industry at large, J.Crew is thriving, posting $40 million in profits for 2009.  Same store sales were up 4%, and gross margins were up as well (from 38.9% to 44.1%) meaning they've continued to raise price points, they're taking less markdowns, or they are making their clothes more cheaply than before.  Why mess with the new forumla in the name of HIGH FASHION, whatever that is anyway?

J.Crew's Fall 2010 RTW Collection
(As if J.Crew wasn't always ready to wear)
 photos courtesy of J.Crew, via Style.com

The fall collection in and of itself is lovely, and aside from the more styled models, is practically indistinguishable from what we might expect in the fall catalogues - chambray button ups, chukka boots, textured tights, unexpected belting and layering, plaid, piles of necklaces, natural denim, and shearling.  The Style.com review says "the important point is that, following the lead of the company's cleverly curated catalogs, there was ample opportunity to deconstruct the looks and find plenty of gotta-have-them, affordable basics, along with some truly special pieces." To a certain extent, yes, mix the high and the low.  But it's hard to do even that with J.Crew anymore when oxfords start at $69.50 and t-shirts at $29.50.  By the time you get to the truly special pieces...the $200+ shoes, the quirky, chunky socks, the 5 necklaces ($118 each), the belt, the brocade jacket ($300+), you begin resenting J.Crew a little bit for pushing these "casual, accessible" styles that are unaffordable. This look alone costs $1896.50.

The problem here is that the market is saturated with mid level luxury. Saks, Nordstrom, Neimans, Bloomingdales...they've got em all.  J.Crew doesn't need to become a high end boutique in order to stay profitable.  If the rising prices keep going up, the hip ladies funding the $40million profit will begin to reevaluate its worth and go elsewhere.  After all, J.Crew is popular. Very popular.  And when something is this popular, there's a good chance on any given day you'll run into someone wearing the same thing you are.  And where's the fun in that? 


Eliza Coleman said...

Great post, and thanks for adding yourself as a follower to my blog!

ldbahr said...

Thanks! You came highly recommended by Kyle Smith. I'm quite enjoying Wonderlust!


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