J.Crew Mulls Madewell IPO

As J.Crew seeks to keep up the momentum of its Madewell apparel business, among other priorities, the retailer is exploring an initial public offering (IPO) for the brand. The offering could happen in the back half of this year, CNBC reported.

J.Crew Interim CEO Michael Nicholson said in a statement, “We believe a potential IPO of Madewell, which had another record year of performance in 2018, could unlock significant value and generate meaningful proceeds that would strengthen our balance sheet and increase our overall financial flexibility to address our 2021 debt maturities, giving us an improved platform to support J.Crew’s turnaround and allowing Madewell to achieve its full potential over the long-term.”

The brand reportedly brings in under a quarter of the company’s revenue. However, its same-store sales are said to show growth, while J.Crew brand is registering declines. J.Crew is experiencing competition from eCommerce firms along with apparel that is of a more casual athleisure variety.

Madewell President Libby Wadle has previously said that the brand’s big secret is its ability to think small to generate very large effects: “We think small. We pay attention — there’s always something to learn. And there’s always a great conversation to be had about what we could be doing differently and better, and it stays dynamic,” Wadle told Glossy in June of last year. “What I’ve learned is to keep it nimble and dynamic, no matter the growth you’re turning out.”

The brand got its start in denim, especially reasonably-priced and stylish jeans — but it has developed a reputation as the hipper and younger brand that replaced J.Crew in the affections of many millennials. Wadle, however, reportedly dismisses that view. The appeal of the brand goes far beyond the demographic of millennials and is largely bolstered by its holistic approach to viewing shoppers as well as their feedback.