Merchant Innovation

J.Crew’s Tanking Numbers Make Acquisition Seem Increasingly Possible

Fashion is known for elevating certain trends one season and turning its back on others the next, and it can seem like shoppers do the same thing to certain brands sometimes. According to recent sales numbers, a pillar of chic urbanware could be at the mercy of one such swing.

The Street reported that J.Crew’s flagging sales numbers have thrown the brand’s ownership situation into doubt. A recent sales report found third quarter sales to have fallen 11 percent, which comes on top of another 2 percent decrease in year-0ver-year sales in the same quarter. For comparison, The Street noted that J.Crew’s quarter-to-quarter losses surpassed that of Sears (9.6 percent) — a brand that more than a few experts have already begun planning postmortem columns about.

“We said on the last call, 2015 would be difficult, and we’re doing the best we can do to get the business moving forward,” Mickey Drexler, CEO of J.Crew, said on an earnings call last quarter, as quoted by Business Insider. “I did say to the team, ‘The only one who really matters here in terms of judgment is the customer.'”

However, it might not be the consumer that gets the final say on J.Crew’s future. The Street noted two companies that might take serious looks at bringing the J.Crew brand under their wings — Coach and Fast Retailing. While the former could use J.Crew’s products to round out its stores’ current offerings and leverage its own brand presence to boost traffic, the latter could piggyback on name recognition to help the spread of owner Tadashi Yanai’s expanding network of Uniqlo locations in the U.S.

“If you’re in [this] business, you have a DNA that’s optimistic, but I think you’ll see a lot of positive changes that have gone on now. But until we have a call that speaks to numbers that make all of us happy, we’re not happy,” Drexler said, according to BI.

If things don’t improve, it’s unlikely his mood, or that of his stockholders, would either.


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