J. Crew’s Sales Fall as Chain Faces ‘Challenging’ Retail Climateby
J. Crew Group Inc.’s same-store sales declined 7 percent last quarter, a sign the preppy-apparel chain is still struggling to win back shoppers.
Total revenue decreased 3 percent to $567.5 million, the New York-based company said in a statement Wednesday. J. Crew’s gross margin also contracted, shrinking to 36.1 percent in the period from 37.2 percent a year earlier.
Chief Executive Officer Mickey Drexler cited a “challenging retail environment,” which has hampered the company’s comeback efforts. The chain, which was taken private by private equity firms in 2011, has been revamping products and marketing in a bid to restore its image as a leading retailer.
TPG, one of its private equity backers, cut the value of its stake in the company by 84 percent at the end of 2015. The firm told investors that its $478.6 million equity holding in J. Crew was lowered to $76 million, according to documents obtained by Bloomberg.
J. Crew’s adjusted earnings before interest, taxes, depreciation and amortization edged up to $45.4 million in the first quarter, compared with $44.8 million a year earlier.
The retailer’s 7.75 percent bonds maturing in 2019, which have lost half their value in the past year, rose more than 2 cents on the dollar to 42 cents on the dollar on Wednesday, according to Trace, the bond-pricing reporting system of the Financial Industry Regulatory Authority.