J.Crew CEO confesses the 'very big mistake' that sent the company spiraling
J.Crew CEO Mickey Drexler says one huge mistake sent the company's sales into a yearslong decline.
In an interview with The Wall Street Journal published Wednesday, Drexler said the retailer jacked up its prices at a time when customers were increasingly cost-conscious.
"We gave a perception of being a higher-priced company than we were — in our catalog, online, and in our general presentation," Drexler told The Journal. "Very big mistake."
At the height of the Great Recession in 2008, J.Crew unveiled a higher-priced line, called J.Crew Collection.
The line, spearheaded by Jenna Lyons, at the time the head designer, debuted with a store on Madison Avenue in New York City. It featured items such as a $3,000 jacket "with French sequins in various shades of tortoiseshell hand-sewn into silk chiffon," the now defunct magazine Portfolio wrote at the time.
The higher prices alienated customers when they were strapped for cash and increasingly shopping at discount stores.
"We became a little too elitist in our attitude," Drexler told The Journal.
In December, J.Crew was selling several of its Collection items at staggering discounts of up to 70% off. The website now features a pared-down selection of Collection items, many of which are under $200.
Drexler has also attributed the company's losses to numerous fashion misses.
Last year, J.Crew's total sales fell 6%, to $2 billion, and same-store sales dropped 8% after decreasing 10% the year before. The company has more than $2 billion in debt and less than $150 million in cash.
Drexler is now trying to turn the business around by putting an emphasis on lowering prices and becoming a more "approachable" brand, he said.
"We're getting back to being who we are — much more comfortable, approachable, democratic, and friendly," he told The Journal.