US listed fashion retailer J Crew’s woes are worsening, with the company’s namesake brand dragging the business towards a significant loss.
As a result the company will shutter another 39 stores in the final quarter, taking the total closed for the year to 50.
In the latest quarter, J Crew group-wide comparable sales slid 9 per cent to $566.7 million, a figure made worse by poor figures for the same quarter last year, when sales were down 8 per cent.
The flagship brand’s sales slumped 12 per cent, following a 9 per cent decline in the same quarter last year.
A 22 per cent increase in sales by Madewell, largely down to an expanded store network, failed to stem the damage. J Crew lost $17.6 million in the quarter, compared with $7.9 million last year.
In the nine months year-to-date, the company has accumulated losses of $126.1 million compared with operating income of $34 million in the same period last year, but it says most of that figure is the result of non-cash impairments and restructuring costs.
Jim Brett, who took over as CEO from founder Mickey Drexler earlier this year, put a brave face on the figures, promising to “reinvigorate the J Crew brand to reflect the America of today and to continue to drive strong momentum in the Madewell brand”.
However, complicating any recovery plan is a massive $2 billion debt the company is in the process of restructuring.
“The numbers for the year so far are painful,” observed Retail Dive writer Ben Unglesbee.
