J.Crew Takes a Leading Role in Men's Fashion

Frank Muytjens, head of men's design for J.Crew (JCG), emerges from behind a partition with a handsome model he's just fitted in a dark gray T-shirt. The model walks and poses for about 40 J.Crew designers, store managers, and marketers, all of whom are packed into a showroom at the company's 150,000-square-foot downtown Manhattan headquarters where Chief Executive Officer Millard "Mickey" Drexler can sometimes be seen riding his bicycle. Drexler, the former CEO of Gap (GPS), is wearing jeans and a light blue button-down shirt with rolled-up sleeves. He clutches a BlackBerry in his right hand and leans back in an office chair. This is J.Crew's Spring 2011 Men's Finalization meeting, where the designers and merchants show off next season's fashions for the boss. As the model approaches, he and Drexler bump fists.

"So this is a slim fit?" asks Drexler. Muytjens (pronounced "MOW-jens) nods. "This is a pocket T," Drexler says. "It's a cheeseburger, not just a hamburger. So show me the cheeseburger! I know it sounds weird, but. " His team lets out a collective chuckle. "Do you realize what we've just done? We're reintroducing a slim, pocket T. Frank, am I missing something?"

"Nope," says Muytjens with a grin.

Drexler, 65, has long been admired for his obsessiveness, and in Muytjens, 50, he has found his ideal employee. Clad in a vintage Japanese work shirt and perfectly weathered 10-year-old Levi's cuffed over J.Crew's own brown Sperry Top-Siders, Muytjens is tall and slim with a silver pompadour. He grew up in Holland and moved to New York in 1994 to establish himself as a designer. After working at Polo Ralph Lauren (RL) for eight years, he landed at J.Crew in 2004. In 2008 he took over as head of men's design. Now he's leading the brand's transformation—a gradual updating and upscaling of its preppy look that began when Drexler joined the company in 2003.

The men's fashion landscape has long been dominated on one side by luxury brands, such as Prada and Gucci, that intimidate casual shoppers. On the other side are less expensive alternatives like Banana Republic (GPS) that no longer seem au courant. J.Crew has emerged in this void as the merchant of a new style that bridges work and leisure, youth and age, vintage and contemporary, gay and straight. "Muytjens understood that men don't want to be just one thing and then learned how to provide it," says Ned Martel, editor of The Washington Post's style section. "Anyone in an office cares about how they look, even if their sartorial position is 'I don't care about how I look.' "

Under Muytjens, J.Crew has responded to current style trends—Americana, work wear, slimmer fits—with clothes that come at reasonable price points and don't alienate shoppers. (Most J.Crew suits run about $600.) "Our mission," Muytjens says, "is to make it easier for a guy to shop in our stores. Not more challenging." At the same time, he has adopted Drexler's attention to detail and desire to go for the cheeseburger, as it were. "I don't think many retailers are focusing on the fashion aspect for guys the way J.Crew is," says Christine Chen, a retail analyst at the investment bank Needham & Co.

Menswear accounts for less than half of J.Crew's net retail sales; in the months of April and May, it made up just 37.7% of its national dollar share. However, the rate at which J.Crew's men's operation has been expanding suggests that it will be a growth area for some time to come. "The biggest opportunity for them is in the men's business," says Marshal Cohen, chief retail analyst at market research firm NPD Group. "They've recognized that over the last few years, no one's had more competition than the women's market. So they built stores showcasing their growth opportunity in the men's." It's already paying off. J.Crew made $44.7 million in the first quarter of 2010, up from $20.4 million over the same period a year ago.

The company opened its first men's-only shop in August 2008, not long before Muytjens was promoted to menswear chief. Called The Liquor Store, it's a cozy, dark-paneled, antique-strewn boutique named for the bar that previously occupied its Tribeca storefront in Manhattan. A few months later the company opened its second in New Jersey's Westfield Garden State Plaza mall. A third followed in May 2009 in Manhattan's SoHo. Although the company declines to provide sales figures for the stores, Drexler told investors on a May 27 earnings call: "We're beyond thrilled with the performance of our stand-alone men's stores." A fourth is scheduled to open later this month in a two-floor Madison Avenue location.

Much of J.Crew's recent success in menswear can be attributed to the collaborations with third-party brands that began in fall 2007 when it started selling Red Wing boots. The partnerships—in which outside brands design items to be sold through J.Crew—don't make the largest contribution to overall revenues, but they got the industry talking. J.Crew now teams with both contemporary labels—Warehouse, Billykirk, Mister Freedom, and Superior Labor—and heritage brands such as Alden, Levi's, Sperry, Timex, and Ray-Ban. There are 40 partnerships in total, 27 of which have been spearheaded by Muytjens. Some, such as the collaboration with staid English brand Barbour, trend highbrow. Others, such as this fall's line of New Balance sneakers, are less so. "We're trying to make the brand relevant again," says Muytjens. "We're trying to be a little more edgy, a little more classic with the right twist." Or, as Richard E. Jaffe, a retail analyst at investment bank Stifel Nicolaus (SF), says: "They've tried to create a halo around their menswear by incorporating these iconic brands."

When Muytjens moved to J.Crew in 2004, he was instructed to tack upmarket. As the industry was flatlining in 2008—just when he assumed the top menswear job—Muytjens decided to stay the course. "As soon as Frank took over, it was a whole new chapter," say Jim Moore, GQ's creative director. "I feel like our eyes are really open wider to J.Crew and its potential." Muytjens was one of six designers GQ singled out for its annual "Best New Menswear Designer in America" award this year. He didn't win, but even being nominated was a coup for a designer for a brand normally lumped in with Gap and Abercrombie & Fitch (ANF).

Moore says Muytjens "has a great business plan" in that he works for a large company yet has the freedom to go with his gut. "For example," says Moore, "he keeps bringing back the two suit silhouettes that he's created—the Ludlow and the Aldridge—every season. This is a very smart move because once a guy gets hooked, he's gonna come back. If he loved the khaki suit in the summer, he's gonna come back for the gray flannel suit in the fall. Frank knows that's how guys shop. He manages to be consistent but offers surprises at the same time."

Although the company won't comment on its expansion strategy, analysts expect J.Crew stand-alone men's stores to start popping up in cities such as San Francisco, Los Angeles, Miami, Atlanta, Chicago, and perhaps even secondary and suburban markets. "Regardless of economic conditions," says Drexler, "there will always be a guy who will be searching for what's new, what's exciting, what's scarce. What feels like it might have been in your closet for years—and, frankly, what's special." And so far, he's right.

    Before it's here, it's on the Bloomberg Terminal.