J.Crew is cutting hundreds of corporate jobs and reshuffling its top management in a bid to finally halt a deep sales decline.
The apparel retailer said on Tuesday it was getting rid of 150 full-time and 100 open positions, primarily at its headquarters in New York City. J.Crew also announced a few major changes in its highest echelons, including naming a new chief merchant for its namesake brand and a new president for its smaller, but thriving, Madewell label.
The moves come as J.Crew struggles to stanch a chronic sales bleed: comparable sales fell 6.7% in its most recent fiscal year on top of an 8.2% drop the year before. J.Crew’s private equity owners, TPG Capital and Leonard Green & Partners, took a $1 billion write-down in 2015 because of the brand’s deteriorating popularity. Like other apparel stores, J.Crew has struggled with declining mall traffic, the agility of fast-fashion rivals like Zara, and a surfeit of merchandise on the market. Much of its pain has been self-inflicted as well, with major fashion misfires in recent years.
“Today’s retail environment is changing more rapidly than ever before. Customers demand greater speed to market, convenience and personalized shopping experiences,” J.Crew Group CEO Mickey Drexler said in a statement. “At J.Crew, we are embracing this change and making necessary adjustments to our business and teams to move us forward in a more efficient and dynamic way.”
Among the changes in the C-suite, COO and CFO Michael Nicholson will also head the J.Crew brand, overseeing its planning, merchandising, marketing, and design functions. And Lisa Greenwald, a top merchant at Madewell, will become the chief merchant at the J.Crew brand.
J.Crew recently shocked the fashion world when it said Jenna Lyons, its iconic executive creative director and the company’s No. 2 executive, would be leaving the company this year. Lyons helped turn J.Crew into one of the nation’s most popular fashion chains, but more recently proved unable to improve the company’s performance.
Tuesday’s announced job cuts are expected to save the company about $30 million annually, but J.Crew will take a charge of about $10 million in the first quarter of fiscal 2017 for severance payments and other termination costs. But the clock is ticking for the retailer to improve its finances: A good portion of J.Crew’s $1.5 billion debt comes due sometime in 2018, a crushing load for a company with some $2 billion in annual sales.
