J. Crew Will Sell Through Nordstrom as Brand Seeks a Revival


Mickey Drexler

Photographer: Marlene Awaad/Bloomberg
  • Retailer already offers Madewell brand in 76 Nordstrom stores
  • J. Crew has suffered seven straight quarters of sales declines

J. Crew Group Inc.’s flagship chain will start selling an assortment of women’s clothes at Nordstrom Inc. stores, part of a push to revive growth at the moribund brand.

J. Crew will introduce the collection on Sept. 12 in 16 Nordstrom locations, as well as the department store’s website, according to a statement Monday. The agreement builds on an existing partnership with Nordstrom, which already sells J. Crew’s Madewell brand in 76 stores and online.

The move bucks a trend among many apparel brands, which are decreasing their reliance on department stores. But J. Crew could use a low-cost way to find new customers, said Noel Hebert, an analyst at Bloomberg Intelligence. The company, which loaded up on debt in a 2011 leveraged buyout, has suffered seven straight quarters of declining same-store sales.

“Anything they can do to broaden their distribution and reducing their reliance on capital-intensive stores -- that’s a good thing for creditors,” Hebert said. “They’ve definitely got to find new ways to continue to grow the business.”

J. Crew is seeking ways to win back shoppers -- especially women -- after price increases and a shift away from classic styles alienated customers. The retailer has revamped its merchandise, but growth has been elusive. As part of his turnaround plan, Chief Executive Officer Mickey Drexler also has opened more off-price stores and expanded Madewell, the New York-based retailer’s younger, hipper brand.

Drexler is famous for carefully managing the presentation of his company’s apparel, and teaming up with a department store means losing some of that control. But the executive said on Monday that Nordstrom has a similar mindset as J. Crew.

“We both share the same high standards of customer service and store experience,” he said in the statement. “We are known for exceptional design, quality and style, which we know will appeal to the Nordstrom customer.”

Falling Value

J. Crew’s slow comeback has brought headaches to its private equity backers. TPG, which led the company’s buyout five years ago, cut the value of its stake in J. Crew by 84 percent at the end of 2015. The firm told investors that its $478.6 million equity holding in J. Crew had fallen to $76 million.

The agreement with Nordstrom is the only one of its kind in the U.S., and not a push toward selling more clothes through other chains, J. Crew said on Monday. 

Nordstrom began selling Madewell in 2015, and has worked to add more brands that will entice younger female shoppers. The chain added U.K. clothing brand Topshop, Beyonce’s activewear line Ivy Park and beauty brand Charlotte Tilbury. These partnerships make up the majority of the 20 fastest-growing vendors at the chain, co-President Blake Nordstrom said on a conference call this month.

The J. Crew name is recognizable to Nordstrom customers, but not too expensive for younger shoppers, Hebert said. Some of the chain’s luxury collections are out of reach for millennials.

“This is certainly a way for them to express that visibility and remind customers of their relevance,” he said.

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