NEW YORK – US apparel retailer J Crew Group has announced a sobering set of financial results for the third quarter and first nine months of 2017, with same-store sales down 12 per cent at the company’s namesake brand. While sister chain Madewell saw an increase in comparable sales of 13 per cent, the brand is too small to make any is significant dent into overall sales, which were down by 9 per cent.
J Crew has now said it expects to close 50 stores this year, up from an initial forecast of 30 and evidence of just how difficult it can be for a business in the apparel space to stop the rot when market sentiment turns against it.
Figures show that revenues decreased 5 per cent to US $566.7 million in the third quarter, with comparable sales down 9 per cent following a decrease of 8 per cent in the third quarter last year.
In summer, J Crew received the backing of some key creditors and revealed terms of a debt restructuring deal that roughly cut in half the value of its nearly US$567m in bonds, as well as extending their maturity by two years.
Two investment firms, GSO Capital Partners and Anchorage Capital, purchased J Crew’s debt to facilitate the deal.
However, the company clearly faces a long and potentially arduous road ahead as the major fast fashion retailers continue to mop up market share, leaving mid-priced fashion retailers such as J Crew looking betwixt and between in a fashion sector which appears to have become polarised between luxury and fast fashion.
Jim Brett, CEO, put a brave face on the latest results, saying: “Our goal is to reinvigorate the J Crew Brand to reflect the America of today and to continue to drive strong momentum in the Madewell Brand.
“During the third quarter of fiscal 2017, we drove gross margin expansion and reduced SG&A by delivering on our expense initiatives. As we solidify longer term strategies, we will continue to leverage our strong brand equity and unique capabilities to expand our reach, accelerate growth and maximise profitability.”