Obama, The Clothing Brand J.Crew, Is Now In A Dilemma.

American clothing brand in deep mire

Sales decline has been recorded for 12 consecutive quarters, and it has been increasingly blurred and constantly losing consumers.

According to the world clothing and shoe net, J.Crew sales decreased by 4.5% to 567 million US dollars in the three months to October 28th, and sales in the same store dropped by 12%. Profits before interest tax depreciation and amortization increased 27% to 67 million 900 thousand US dollars, but the net loss expanded from 7 million 900 thousand US dollars last year to 17 million 600 thousand US dollars, and the gross profit margin was 40.1%.

Among them, the group has the same name.

J.Crew sales fell 11.8% to $430 million, while sales in the first nine months decreased by 9.96% to $1 billion 300 million, while the sales of another brand Madewell increased 22.2% to $107 million 500 thousand, and sales in the first nine months rose 12.3% to 265 million dollars.

The chief executive officer, Michael Nicholson, pointed out in a conference call after the earnings announcement that in order to drive the growth of performance, the group had to pform to the digital channel and develop the full channel business. Since this year, the group has closed about 50 stores and will close 9 stores by the end of the year, reducing the total number of global stores to 535.

J.Crew, founded in 1983, has grown into a world-famous mid - end fashion group by making costumes that represent the spirit and interest of the United States. At that time, J.Crew relied on family mail order business.

In the field of casual wear, he took the lead.

J.Crew combines the style of classic products with bright colors, which has attracted many brands of fashion circles to imitate its style. Since 2012, J.Crew has been designing its fashion week in New York, and has also returned to the Chinese market in the same year.

In 1990, J.Crew sales amounted to $400 million. Two years later, through its cooperation with Itochu, J.Crew began to enter the Asian market, and J.Crew's territory expanded to Canada and France.

In 1997, the 70 year old founder, Arthur Cinader, decided to retire. Most of J.Crew's shares were sold to TPG Pacific Group of Texas at a price of $560 million.

In October 12th of this year, Arthur Cinader died at the age of 90.

On the day of the inauguration of former US President Obama, his wife, Michel Day's green gloves and two girls' blue and blue coat, all came from J.Crew, which officially became the "national costume" of the United States.

However, for a long time, J.Crew, once a fashionable brand, once had to face the dilemma of declining sales and profits.

The group's new chief executive, James Brett, said in an interview this July that its goal is to revive the J.Crew brand while continuing the double-digit growth momentum of Madewell.

However, some analysts believe that compared with J.Crew, Madewell is too small to pull J.Crew group out of the mire of declining performance.

Due to its low performance, J.Crew ended its contract with Jenna Lyons, a creative director who has joined the company for the past 26 years.

But Jenna Lyons will remain in the J.Crew as a creative consultant, and her position will be taken over by the designer Somsack Sikhounmuong and the design team.

Some people in the industry believe that J.Crew will change the original design style of the brand and lose some loyal consumers.

For J.Crew, whose CEO and creative director have not changed, investors have felt unprecedented pressure and panic. Change has become the most important and urgent issue in brand issues.

However, what J.Crew should most worry about at present is that competitors who are already in the same situation have begun to recover slowly.

According to fashion headline data, the US apparel brand Gap finally broke the 14 consecutive month of sales decline in the first quarter of October 28th, sales rose 1% to 3 billion 840 million US dollars, a 3% increase over sales.

After a series of reform and restructuring measures, the third quarter sales of the US youth clothing brand Abercrombie&Fitch also increased, up 4.5% to 859 million US dollars compared with the same period last year, which is higher than that of Wall Street analysts. The sales increase is 4%.

It can be seen that after the big reshuffle of the apparel retailing industry in the United States, the truly powerful brands have been left behind, and the brands that can not keep pace with the times have been phased out.

At the same time, J.Crew also had to face the tough challenges posed by the rapid rise of fashion brands such as H&M and Zara and the gradual loss of consumers' freshness.

In regard to the decline of J.Crew, analyst Lisa Schemiser wrote in an analysis and commentary of a newspaper in New York, "J.Crew's women's wear has become all the same without any surprises. It has become blank and plain. 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." the CEO of Mickey Drexler, who had already stepped down, acknowledged this in her early interview with the Wall Street journal.

The $2 billion debt tied to capital has become the biggest stumbling block on the road to J.Crew recovery.

The source of this huge debt stems from the radical capital operation of J.Crew's major shareholder TPG Capital, Leonard Green & Partners and Millard Drexler, that is, in the form of leverage, borrowing and purchasing J.Crew's equity to fill the gap of operating capital, rather than seeking other ways to improve the company's profitability.

Analyst Joe Nocera stressed that even if J.Crew does not exist behind the greedy investors will also have many problems, assuming that J.Crew is still a listed company, its stock performance will not look good, but in Mickey Drexler or will become TPG and Lenoard Green scapegoat.

Today, J.Crew's $567 million debt has been postponed to 2021 under the guarantee of Blackstone Group's credit agency GSO.

However, the James Brett J.Crew is still in a state of disorder. There is analysis that unless James Brett can successfully restructure its debts, it will be an unfinished task to revive J.Crew.

More interesting reports, please pay attention to the world clothing shoes and hats net.