J Crew to spin off high-flying Madewell denim brand
The Madewell denim brand is set to be split off from J Crew as part of a planned IPO by parent Chinos Holdings.
Documents lodged with the US Securities and Exchange Commission on Friday show Chinos plans to raise funds to pay off some of its US$1.7 billion in debt, although the volume of shares and their projected value have yet to be revealed.
Under the plan, Chinos Holdings will be renamed Madewell Group.
“We have consistently grown at Madewell, but we have retained both our focus and the start-up mentality of our earlier days, which allows us to remain nimble, challenges us to get creative and motivates us to always look toward the future,” said Madewell CEO Libby Wadle in a statement.
The Madewell denim brand is considered to be more successful than its sister J Crew which has been struggling to maintain market share and brand appeal in recent years. In the second quarter of this year, Madewell sales rose 15 per cent to $139.7 million with same-store sales up 10 per cent. That followed a 28-per-cent rise in sales in the same quarter a year ago. J Crew sales, however, fell by 7 per cent in the second quarter, to about $400 million, with comp-store sales down by 4 per cent.