J.Crew struggled to win back its base of loyal customers last quarter.
The New York-based company reported a 7 percent loss in same-store sales last quarter as compared to 8 percent noted last year. Its revenue fell by 3 percent to $567.5 million, the company announced in a statement.
The company’s CEO Millard Drexler said a challenging retail environment made it hard for the company to achieve its goals.
The weakening sales come on the heels of its chief investor TPG Capital’s move to write down its stake in J. Crew by 84 percent, thereby lowering its equity holding in the company from $478.6 million to $76 million, according to Bloomberg.
“The market, currently trading the company’s debt at a big discount, is saying that it’s unlikely that the equity has any value,” David Tawil, co-founder of New York-based Maglan Capital LP, told Bloomberg.
J.Crew’s adjusted earnings before interest, taxes, depreciation and amortization edged up to $45.4 million in the first quarter, compared with $44.8 million a year earlier.
The struggling clothing retailer has been working on revamping its product line and reinvigorating its marketing initiatives to appeal again to its once loyal customer base. Over the last year, the company has constantly struggled with style misses, inventory issues and a growing customer sentiment that points toward declining quality, as it worked on budget cuts.
J.Crew’s year-round frequent sales model also seems to have affected its earnings, as Retail Dive pointed out. Many of J.Crew’s customers now tend to wait for sales instead of buying items at full price.
For now, the company is hoping to see an improvement in its overall performance from the increasing sales of its sister brand Madewell, which saw a 17 percent increase in sales to $72.5 million. Its comparable sales increased 6 percent following an increase of 12 percent in the first quarter last year, J.Crew said.
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