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Declining sales at J. Crew drive stores closures

Nov 23, 2017 / United States
Declining sales at J. Crew drive stores closures
J.Crew Group posted another decline in sales in its third quarter, despite strong sales from Madewell, which continues its positive contribution to the group’s performance. More stores expected to close
"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 maximize profitability", remarked Jim Brett, Chief Executive Officer, adding: "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."

In the last quarter, J. Crew Group total revenue decreased by 5% totaling 566.7 million US dollars. Comparable company sales decreased 9% following a decrease of 8% in the third quarter last year. J. Crew brand sales decreased by 12% reaching 430.4 million US dollars. J.Crew comparable sales decreased by 12% following a decrease of 9% in the third quarter last year.

Madewell sales increased by 22% to 107.5 million US dollars. Madewell comparable sales increased 13% following an increase of 4% in the third quarter last year.

Net loss totaled 17.6 million US dollars compared to 7.9 million US dollars in the third quarter last year; this reflects the impact of transformation and transaction costs.

In the first nine months, total revenue decreased by 4% to 1 659.5 million US dollars. Comparable company sales decreased by 8% following a decrease of 7% in the first nine months last year. J.Crew sales decreased by 10% to 1 302.0 million US dollars. J.Crew comparable sales decreased by 11% following a decrease of 9% in the first nine months last year. Madewell sales increased by 20% to 285.2 million US dollars. Madewell comparable sales increased 11% following an increase of 4% in the first nine months last year.

Net loss was 161.6 million US dollars compared to 24.6 million US dollars in the first nine months last year. The net loss this year reflects the impact of non-cash impairment charges, transformation costs, transaction costs, and severance costs. The net loss last year reflects the impact of non-cash impairment charges.

J.Crew also announced plans to close 50 stores this year, up from 30 previously forecast.

J.Crew Group, Inc. is an omni-channel retailer of women's, men's and children's apparel, shoes and accessories. As of the 21st of November 2017, the group operates 269 J.Crew retail stores, 121 Madewell stores, jcrew.com, jcrewfactory.com, the J.Crew catalog, madewell.com, and 182 factory stores (including 42 J.Crew Mercantile stores).

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