J.Crew Has a Sweater Problem
J.Crew is already coming off a “lousy year” in women’s clothing. Now the company is having trouble with an important piece of its business: sweaters.
The privately held apparel company reported weak results on Thursday, with sales at J.Crew's namesake brand sliding 5.2 percent, to $508.7 million, for the quarter. On a conference call with analysts, Chief Executive Officer Mickey Drexler pointed to two categories as the cause of problems for J.Crew's women's line. "The lion's share of our women's issue is isolated to knits and sweaters, which has been an outsize portion of our business," he said.
One of J.Crew's cardigans didn’t fit well, Drexler said. The retailer's Tippi pullover sweaters sold like crazy, but J.Crew didn't order enough of them. Meanwhile, the Tippi's sister style—or its "slightly shrunken cousin," as J.Crew's website puts it—didn't sell as well as anticipated. J.Crew's entire knit business was lackluster in February, March, and April, Drexler said, adding that the company plans to keep things "classic" with its sweater selection in the future.
Executives have been struggling to patch up J.Crew's women clothing business after a dismal year plagued by fashion misses and strategic errors. A significant amount of that business comes from J.Crew's selection of cardigans, pullovers, and knit tops. Failing in that category is enough to dent the bottom line, though Drexler declined to reveal specific sales numbers or percentages.
J.Crew's rapidly growing offshoot Madewell remains on its stellar run, with sales up 33 percent, to $61.9 million. As for its namesake chain, J.Crew expects its womenswear woes to drag on through the end of the year, the company said in a release.
"We just made mistakes," said Drexler.
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