Is It Useful To Follow The Example Of Zara? J.Crew Has Ended 12 Consecutive Quarters Of Declining Sales And Declining Trend.

From the supply chain to emulate fast fashion, at least can guarantee the rapid launch of new products for consumers to create freshness.

After the declining performance and high-level personnel turbulence, J.Crew's business model is being matched with competitors' fast fashion.

In the fourth quarter ended February 3rd, the J.Crew net profit of the US middle end casual wear group rose 33 times to US $36 million 600 thousand over the same period of last year, and the profit before interest tax depreciation and amortization increased by 64% to 64 million 600 thousand US dollars. The sales ended in the 12 quarter of the year, and sales declined and declined, with an increase of 2% to 712 million 600 thousand dollars, with a gross margin of 36.6% at the end of the fourth quarter.

Affected by tax expense and cost, last year, the group lost a net loss of 125 million US dollars, and total sales decreased by 2% to 2 billion 370 million US dollars, a decrease of 6% compared with sales and a gross margin of 37.6%.

The picture shows J.Crew group's detailed performance data last year.

Last year, sales of core brand J.Crew decreased by 8.4% to 1 billion 850 million dollars, and sales in the fourth quarter decreased by 4% to 547 million dollars; Madewell sales rose 23.5% to 421 million dollars, fourth quarter sales increased by 32% to 136 million dollars; sales of other brands increased to 51.8% dollars, and quarterly sales surged to $US.

James Brett, chief executive, said that with the implementation of the group pformation strategy, the strong performance of women's clothing group pulled the overall performance in the fourth quarter, gaining two digit growth.

In the future, we will continue to focus on developing Madewell and expand the product range of J. Crew.

However, from the brand sales performance, we can see that the sales growth of the core brand J.Crew is still lagging behind.

Founded in 1983, J.Crew started with the family mail order business, and later became the best selling clothing brand in the United States with oblique stripes and simple T-shirts.

J.Crew sales in 1990 were as high as $400 million. Two years later, through the cooperation with Itochu, they entered the Asian market and expanded their business territory to Canada and France.

Since 2012, the brand has been exhibited in New York fashion week, and has also returned to the Chinese market in the same year.

J.Crew has used rich colors to deduce the classic single products, and sold it at the mid end price to make it a leading position in the domestic apparel industry for many years.

In 2013, former US first lady Michel Obama visited the British Prime Minister in J.Crew's cardigan. In just a few hours, the brand website was worth $298 and sold out quickly.

With the double promotion of sales and popularity, the ambition of Mickey Drexler, the former CEO of J.Crew, is also expanding.

He then began to raise the price of commodities in an attempt to upgrade the brand to high-end positioning.

However, the design style has not changed with the high price, and it can not only get the high consumption crowd, but also directly lead to the loss of a large number of loyal customers of J.Crew.

After receiving feedback from its consumers, Mickey Drexler immediately summoned the team to discuss the reform measures, but the J.Crew eventually turned to low-end manufacturing and price reduction measures that resulted in the unclear positioning of the brand.

In March 2014, J. Crew was once sold to Japan's fast retailing group at the highest price of 5 billion US dollars, but because of the price difference, the plan finally ended, and J.Crew began to decline.

In the 2016 fiscal year, group sales fell by 6% to $2 billion, down 8% from store sales, and J.Crew sales fell for 12 consecutive quarters in the third quarter of last year.

J.Crew has been popular with consumers, and has repeatedly triggered panic buying because it is Michel Obama's favorite.

In an analysis and commentary by New York Times, Lisa Schemiser wrote that "J.Crew's women's wear has become so unpleasant that it has become blank, plain, and undirectional. It is neither designed nor attractive, or it is the leisure minimalism that J.Crew wants to emphasize, but the price of its clothes is really too expensive for the younger generation of consumers."

In pition strategy, J.Crew is also lagging behind its competitors.

In 2014, Mickey Drexler said it would never set foot in the field of sportswear. After two years' consultation, the Canadian Yoga brand Lululemon has taken the lead in catering to the growing demand for young people's fitness.

Under the constant impact of the downturn in retail business and the rise of the electricity supplier, Mickey Drexler, who has been in the group for more than 14 years, left office in June last year. The replacement of James Brett, now 48 years old, has been an important leading position in Urban Outfitters, Anthropologie and JC Penney department stores.

The problem in front of J.Crew is that it has a total debt of up to 2 billion dollars in addition to its products.

James Brett said in its conference call after yesterday's earnings report that the first thing to do after last year's taking office is to cut costs and repay debts to lighten the financial burden of the group.

It is noteworthy that last year, the group extended its debt maturity to 2021 by restructuring and financing, and realized debt reduction by 300 million US dollars. During the period, J.Crew closed 50 stores.

Thanks to the positive impact of cash flow in the fourth quarter, it plans to increase 10 Madewell stores and 1 J. Crew stores in other markets this year, and close 20 profits.

Stores will streamline the physical retail business, and will also cooperate with retailers such as Nordstrom in the future.

In terms of products, James Brett innovatively starts from the supply chain. By shortening the product development process and launching the commodity centralized pricing plan, it is more important for J.Crew to break the seasonal division and start using the styles of rock and Bohemia as a new theme for each season.

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The chief executive officer, Michael Nicholson, said that the sales performance of the cowboy series was strong last year. The loyalty program launched by the group's brand Madewell was also successful, and the average cost of its members increased significantly.

J. Crew also disclosed last year's digital upgrading plan in its earnings report, including personalized product identification, picking up goods on the same day, booking online products, and many other services.

Net profit decline for three consecutive years seems to have made the market lose confidence in J. Crew. Whether the group can continue its growth is still a question mark.

But Raya Sokolyanska, a senior analyst at Moodie investment company, is optimistic about its profit outlook. He believes that initiatives such as changing business and expanding product categories by providing better value for consumers can fundamentally improve performance.

As of February 3, 2018, the J.Crew group had 235 J.Crew retail outlets, 176 J.Crew factory stores and 121 Madewell stores distributed in the US, UK, Canada and Hongkong.

Some analysts pointed out that with the sudden departure of chief designer Somsack Sikhounmuong in September last year, J.Crew could not change its brand style in a short time, but from the supply chain to emulate it quickly.

At least, it can ensure that new products are launched quickly and create fresh feelings for consumers.