A timeline of J. Crew's rise and fall
By: Kaarin Vembar / Retail Dive
With hindsight, it's not hard to see that a new age of retail started when J. Crew hired Jenna Lyons. In 1990, the company, which started in 1983, hired a new assistant designer straight out of Parsons and thereby put into motion a series of events that would bring about the pinnacle of mall specialty retail, followed swiftly by its near crash-and-burn.
Yet, pinning the rise and fall of a retailer on one person is neither accurate nor fair. Lyons was given room to grow and flourish once she was under the direction of Millard "Mickey" Drexler. Drexler had previously been a director at Apple, and then the CEO of Gap Inc. before he landed at J. Crew. The two made an unlikely pair, but together they designed and executed a vision to build a brand that was synonymous with style and luxury.
It almost worked.
At a quick glance, the below timeline is simply a set of events at one company. Upon closer inspection, a dramatic narrative is revealed about the changing state of retail. There is, quite simply, a "before" and an "after." There was the way that retail always worked, where stores and designers dictated what consumers wanted.
Then, there's the after where everything changed. People started buying clothes online versus going to malls. The Great Recession hit and customers were looking for inexpensive, trendy clothes instead of investment pieces. Social media exploded and launched a wide variety of style influencers to mass audiences. Traditional retailers who were slow to catch on were left scrambling, trying to understand the market while insisting that retail wasn't changing.
Lee Peterson, executive vice president of thought leadership and marketing at WD Partners, thinks that J. Crew is an example of a massive shift in executive thinking when it comes to specialty retail. "Our next line is going to save us — I think those days are over," he says. "Because your next line will be scrutinized by a customer that has more power than you. It looks like J. Crew has got the message .... product is not the answer. It's a piece of it, but it's not the whole thing."
The story of J. Crew encapsulates both the potential and the heartache of the trajectory of the industry.
Of the below timeline Liz Dunn, founder and CEO of retail analytics and consulting firm Pro4ma, said that it tells, "a very clear story of not only the evolution of J. Crew, but also the evolution of retail from this standpoint in the 90s and the 2000s where we were all sort of believing in the idea of the 'merchant prince' or 'princess,' as the case may be."
Reading through nearly 30 years of decision-making at the company is startling. At points, executive leadership appeared to deeply misjudge and misread economic clues. But, at the end of the day, J. Crew is still here. It's a company that has learned from the past and is attempting to rebuild and grow into a new era — to meet the consumer where they are, on the customer's terms.
Jenna Lyons starts at J. Crew as an assistant designer in menswear after graduating from Parsons School of Design.
TPG Capital buys an 88% stake in the company for approximately $500 million.
Millard "Mickey" Drexler brought in as CEO. He buys the name to Madewell.
J. Crew launches The Bridal Collection.
"Mickey Drexler's Second Coming" appears in Fortune magazine.
J. Crew goes public.
Madewell is launched.
Drexler appoints Lyons as the executive director of J. Crew.
First Lady Michelle Obama wears J. Crew on The Tonight Show with Jay Leno.
Lyons introduces the J. Crew Collection featuring an $800 skirt and $1,900 sweater during the recession.
Drexler appoints Lyons as the president of J. Crew.
J. Crew announces that they will be taken private in a $3 billion deal. The New York Times reports that Drexler waited seven weeks to inform the board he was discussing the buyout. He reportedly received a net result of $200 million in cash and an 8.8% stake in the new company.
J. Crew starts showing its collections at New York Fashion Week.
J. Crew's leveraged buyout by TPG Capital and Leonard Green & Partners is finalized.
The company launches e-commerce operations in more than 100 countries.
"Jenna Lyons, the Woman Who Dresses America" appears in The New York Times. Drexler states of Lyons, "She is, in my opinion, one of the most talented, trained, intuitive and commercial designers that I have ever met."
"How Jenna Lyons Transformed J. Crew into a Cult Brand" appears in Fast Company.
J. Crew goes from a net income of $35.4 million to a reported loss of $607.8 million in one year.
Moody's Investors Service downgraded J. Crew due to a, "declining earnings trend stemming from weak execution in a challenging apparel retail environment."
Writer and illustrator Tricia Louvar writes "An Open Letter to Jenna Lyons"for website The Hairpin that expresses dismay over J. Crew's prices and a misunderstanding of its core audience. The post goes viral.
J. Crew's long-term debt is approximately $2 billion.
The company shutters The Bridal Collection.
Drexler gives out his email address so customers can contact him directly.
April 25 - The company announces it will terminate 250 jobs, including 150 full-time jobs and 100 open positions, as part of a cost-cutting measure.
May 24 - Drexler gives an interview with The Wall Street Journal where he confesses that he underestimated the influence of technology on retail. "We became a little too elitist in our attitude," he says. Sales at stores had fallen for the past 10 quarters. "We gave a perception of being a higher-priced company than we were — in our catalog, online, and in our general presentation. Very big mistake," he says.
June 5 - Drexler steps down. He is replaced by former West Elm President James Brett.
June 13 - After reporting plunging revenues the company announces plans to restructure its debt through a debt swap.
Sept. 6 - Chief Design Officer Somsack Sikounmuong steps down. J. Crew decides not to replace him and announces that the role will be absorbed by staff.
Sept. 7 - Fast Company releases the article "J. Crew is falling apart and right before New York Fashion Week." J. Crew is absent from the NYFW schedule.
Nov. 9 - Former CEO Drexler reveals that he approached Amazon about a possible sale but came to the conclusion that selling J. Crew products through the e-commerce giant would undermine their brand.
Nov. 22 - Announces 50 store closures.
Dec. 27 - Quietly launches new "untucked" shirt option with a more relaxed fit.
Jan. 16 - Announces the closure of some stores and outlets.
Feb. 15 - Announces a partnership with WeWork.
Feb. 16 - The company hires former Starbucks executive Adam Brotman as president and chief experience officer.
Feb. 26 - Launches a shop-in-shop concept where Madewell products will be available for purchase in some J. Crew stores.
April 25 - Wins a lawsuit over a debt swap transaction.
May 15 - Moody's Investors Service raises the company's outlook to "positive" due to earnings improvements, cost cuts and Madewell's growth.
June 18 - Announces that the former creative director at West Elm, Johanna Uurasjarvi, will be J. Crew's chief design officer.
Aug. 1 - Opens a men's store in Brooklyn, New York, that includes local brands in the fashion, grooming and home goods categories.
Aug. 6 - Announces a loyalty program.
Sept. 5 - Announces it will be selling its Mercantile line through Amazon.
Sept. 25 - Announces the launch of a new line aimed at younger women.
Nov. 13 - The Nevereven branch launches on Facebook.
Nov. 17 - Announces that CEO James Brett will step down after just over a year on the job.
Nov. 23 - The company's website crashes on Black Friday. Analysts estimate that the company lost $775,000 in sales within the first five hours of the outage. The site continues to have glitches through Cyber Monday.
Nov. 29 - The company states in an internal memo that it will discontinue its Mercantile and Nevereven brands, the latter of which was launched only 16 days earlier.
Jan. 18 - Mickey Drexler announces his retirement as chairman of the company. Chad Leat, who has served as a director of the company since 2017, is elected to succeed Drexler as chairman. Drexler will continue to serve as a strategic advisor to the board and the office of the CEO.
Jan. 31 - The Business of Fashion reveals that Stefan Larsson is in talks to be the next CEO. Larsson was the former CEO of Ralph Lauren.
April - "The company is considering an IPO of Madewell as part of its previously stated initiatives to maximize value, position both the J. Crew and Madewell brands for long-term growth and deleverage and strengthen the company’s balance sheet.” — J. Crew Group
J. Crew is carrying a total of $1.7 billion in debt, the biggest portion of which comes from the company’s $1.4 billion term loan due in 2021. The term loan is partially secured by Madewell assets and includes a provision giving lenders the right to approve a Madewell deal, unless they’re paid off in full.
The exact plans for Madewell are still uncertain as J. Crew tests the market. But the company has to move quickly.
Stay tuned to find out what happens to what was once one of our favorite retailers.....