Monday, July 27, 2015

This Crew Has Me All Confused

J.Crew is a great brand that cannot make up its mind at the moment.  Of course, an indecisive brand is a unsuccessful one.

It's difficult to clearly see what position J.Crew is trying to communicate.  Is J.Crew clothing for men or women?  Are they selling clothes for work or the weekend?  Does the brand reflect a stylish upscale status or down and dirty brand that will bargain its way to get by.

There isn't a clear answer to any one of these questions for J.Crew.  Its stores are stocked with an assortment of clothes for men and women.  They have suits for a workday at the office or tees  and shorts that will violate the office dress code.  And their mall locals are are supposed to sell style at a premium whereas the factory stores push the same clothes on price.

This fundamental problem of how to position the brand has led to major issues at J.Crew.  Revenue is trending down which is a double whammy for a brand  racked with debt.  This has led to 175 employees being laid off in June.  Worse yet, a serious culture problem may have been exposed after the layoffs when a J.Crew executive mocked those who lost their job.  He too has since been relieved of his duties

Perhaps the worst part is that the Crew's chief is Millard (Mickey) Drexler isn't able to recognize his brand dilemma and the damage its causing.  On a recent earnings call, he attributed the company's poor performance on a single ugly sweater.  According to Drexler, "the right cardigan" would have made all the difference.

Furthermore, for a brand in desperate need of focus, Drexler continues to undermine the upscale position that J.Crew carved out for itself.  This year J.Crew will add 21 new "discount" J.Crew factory stores to compete with its flagship brand.  If that wasn't damaging enough, J.Crew recently launched the undifferentiated J.Crew Mercantile concept.  According to the brand, "For many of our customers, J.Crew Mercantile or Factory is ‘their' J.Crew, both in our stores and on our web site. They appreciate the sharp price points for classic J.Crew styling, and feel they are getting a great value." I guess the name J.Crew strip mall didn't go over well with focus groups - it may have been too direct. 

J.Crew is one confused brand.  It's brutally ironic that one of the best qualities of J.Crew is that its clothes don't have any visible exterior markings, yet, the brand will continue to suffer with positioning that is undefined.

As always, thank you for reading and sharing.