After a recent collaboration with Comme des Garcons failed to boost sales, J. Crew is moving in the other direction by expanding its “value-driven” J. Crew Mercantile line.
Previously sold only in J. Crew Factory stores, Mercantile products are now being sold for the first time at a retail location. Dallas’ The Shops at Park Line will be the first to have a J.Crew Mercantile store with other malls to follow.
The announcement followed a tough first quarter for J. Crew, with sales tumbling by 5%. Many blamed J. Crew’s struggles on poorly conceived designs like the Tilly sweater, which CEO Mickey Drexler called “a big mistake.” After the Tilly fiasco, the company appointed a new head of women’s design from hipster subsidiary Madewell and cut 175 jobs.
But J.Crew’s decline extends to its digital assets. The brand’s social media following is lackluster compared to that of competitors Express, Zara and French Connection. Its rank in L2’s latest Specialty Retail Index fell to an unimpressive 43rd among 80 brands in the study. Most of J. Crew’s decline can be attributed to its underdeveloped site, which lacks features such as in-store inventory.
The strategy of creating a lower-cost alternative like Mercantile worked for Drexler in 1994, when he launched Old Navy in his role as Gap president. Last quarter, Old Navy nearly doubled Gap’s sales and Gap plans to emulate its subsidiary’s speedy production schedule. While Mercantile can broaden J. Crew’s appeal to mass market shoppers, however, outdated digital assets could continue to harm the brand.
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