Retail

J.Crew’s Latest Brand Reset May Put Amazon Deal In Jeopardy

More changes are underway at J.Crew, and some of those changes may risk ending its newly-forged sales relationship with Amazon.com.

The long-struggling J.Crew company has announced it is pulling the plug on its lower-priced Mercantile line and the newly-launched Nevereven brand, according to Wall Street Journal reports based on a recently-circulated internal memo.

The changes undo some of the changes made by recently-departed CEO James Brett.

The memo reportedly announced the plan to “return the J.Crew brand to profitable growth” and “more diligently manage our balance of investments and expenses.”

The memo further noted that the company’s intended focus will be on its lower-priced “factory” business. The phased removal of the Mercantile brand is reportedly designed to free up additional resources to focus on both factory stores and its website.

“We believe that a ‘good’ price tier opportunity is better served by the J.Crew label,” the memo says.

Mercantile, however, is currently the only line for sale on Amazon.com. Its inclusion on the eCommerce giant’s site was a deal Brett made before his departure, and at the time it came as a surprise since J.Crew had long eschewed a presence on the site for fear of cheapening the brand.

The elimination of Mercantile calls into question J.Crew’s deal with Amazon.com Inc., which was one of many moves Brett attempted to make to help expand J.Crew’s appeal to a broader group of customers — moves that eventually created strife between him and the board. The dispute reportedly came to a head at a board meeting in recent weeks, and ended with Brett leaving the firm. In the wake of his departure, four current executives have formed an “office of the CEO.”

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