- J.Crew announced that its CEO Jim Brett would be stepping down from the company last week. Brett had been leading the charge in J.Crew’s turnaround efforts by lowering prices and expanding its low-cost Mercantile collection.
- Analysts are now concerned that the store’s prices could creep up without Brett at the helm of the business as it slips back into its old ways.
- For the moment, discounts don’t seem to be going anywhere. This Black Friday the retailer is offering 50% off most full-price items.
Last week, J.Crew’s CEO James Brett, stepped down from the company after only just more than a year in the role. Brett, who had replaced longtime leader Mickey Drexler in June 2017, had been leading the charge in J.Crew’s turnaround efforts by lowering prices and expanding its low-cost Mercantile collection.
And it seemed to be working, J.Crew’s same-store sales numbers turned a corner in the company’s most recent quarterly results after dropping for the last four years. In August, J.Crew’s namesake brand reported a 1% increase in comparable sales for the second quarter.
In a statement to the press last week, Brett hinted that a clash with management was the reason behind his departure. This was later confirmed by The Wall Street Journal.
Sources close to the matter told The Journal that Drexler took issue with Brett’s decision to start selling clothing on Amazon as well as his plans to grow the company’s budget line, J.Crew Mercantile, worrying that it would cheapen the brand.
Analysts are now concerned that without Brett at the helm of the business, and the store only at the beginning of a turnaround, that it would fall back into its old ways and prices would creep back up.
Retail expert Neil Saunders of GlobalData retail wrote in a note to clients earlier this week that the management team’s attitude to pricing prior to Brett was damaging to the brand.
“J Crew’s leadership were not sufficiently humble about the brand’s status and were rather divorced from the realities of the retail marketplace. They seemed to cling to the notion that J Crew was a top-notch brand that deserved to charge top-notch prices – even when customers thought otherwise,” he wrote.
He continued: “If the departure of Jim Brett hails the return of these unrealistic attitudes, J Crew is going to slip back and undo all of the progress made to date. Given the precariousness of its financial position, this is a mistake it cannot afford to make.”
Despite this, its discounts and deals don’t seem to be going anywhere this holiday season. This week, J.Crew was offering 40% off most full-price clothing, and 50% off on Black Friday.
More on Black Friday 2018:
- Thanksgiving is killing Black Friday by replacing it
- Black Friday deals sold out at stores like Walmart and Target before Friday even began – and people are furious
- Macy’s, Best Buy, Kohl’s, and JCPenney are being slammed for being open on Thanksgiving – and some people are threatening not to shop with them this holiday season
- Walmart says it’s offering thousands more deals than last year on Cyber Monday in a direct shot at Amazon’s most valuable day
- Walmart shoppers are complaining that stores are running out of iPhones as Black Friday sales begin