We visited J. Crew’s flagship store and saw why the brand is in trouble

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Women’s workwear at J. Crew’s Fifth Avenue store, New York.
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Business Insider/Mary Hanbury

J.Crew is in trouble.

The company announced Monday that its longtime CEO Mickey Drexler is being replaced. Jenna Lyons, J. Crew’s creative director of 26 years, is also out.

Same-store sales have been down at J. Crew for the past three years; dropping by 8% in 2016, following a 10% decrease the year before, and the company has more than $2 billion in debt and less than $150 million in cash.

We went to check out a store in April to see what it’s like to shop there and find out why the brand is struggling:


We visited J. Crew’s flagship store on New York’s Fifth Avenue on a Wednesday afternoon In April. The store is blocks away from its major competitors, Zara and H&M.

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Mike Mozart/Flickr

While J. Crew has seen three straight years of declines in same-store sales, these stores have seen growing sales, luring customers in with cheap prices and constant turnover of fashionable clothing and accessories.

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REUTERS/Albert Gea

In a recent interview with the Wall Street Journal, outgoing CEO Mickey Drexler said that the retailer’s biggest mistake over the last few years was that it had raised 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.”

Source: The Wall Street Journal


Drexler told the Journal: “We became a little too elitist in our attitude.” J.Crew priced its consumers out of the store.

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J.Crew

Source: The Wall Street Journal


On our visit to the store, it’s instantly apparent from outside that J. Crew is trying to fight back and become more competitive on price. A sign in the window reads “No – Brainers. Great Style at Great Prices.”

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Business Insider/ Mary Hanbury

This “No – Brainer” collection is an attempt to go back to selling basics and more simple clothing after being criticized for alienating core customers with its more outlandish designs.

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Business Insider/Mary Hanbury

While the line has been mocked on social media…


The prices do seem more reasonable and, in most cases, the designs are simpler. This “No – Brainer” off-the-shoulder top, for example, is being sold for $59.50.

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J. Crew

There’s also a 30% discount on most items including its newest arrivals bringing the price of the top down to $41.65.

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J. Crew

But it’s still not enough to keep up with Zara, which is selling a similar looking item (in a different color) for $35.90.

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Zara

Lyons was criticized for making the brand unaffordable and impractical, Business Insider previously reported.

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Mike Coppola/Getty Images

In 2015, writer Tricia Louvar wrote an open letter to Lyons on The Hairpin, prefacing it with “you are pretty dope,” but stating that, dopeness aside, the clothes J. Crew was selling were unaffordable and not practical. “If only I, an ordinary mother on a modest income, could afford to wear a $400 cashmere skirt, silk barely-there blouse and belt to a one-time business-casual event,” she wrote.

Source: Business Insider


Lyons’ signature geek-chic look is still apparent in the clothing on sale — but these clothes do seem wearable.

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Business Insider/Mary Hanbury

However, pricing is still an issue and in some cases, arbitrary. This plain white dress costs $248.

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Business Insider/Mary Hanbury

While pants cost a more modest $115. Though it’s still a lot more expensive than Zara, it is on par with its sister brand, Madewell.

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Business Insider/Mary Hanbury

Next, we took a look at sportswear. J. Crew partnered with New Balance in October of last year to create a line of athleisure clothing, in hopes of cashing in on one of the only bright spots in retail. But we are shocked by how expensive it is. This pullover is $85.

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Business Insider/Mary Hanbury

And a flimsy white tennis dress is $100.

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Business Insider/Mary Hanbury

We headed to the sale section to see if there were any bargains. All we found were the remnants of J. Crew’s offbeat designs from last season.

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Business Insider/Mary Hanbury

And these clothes hadn’t been reduced by much. This sequined cardigan still cost $79.99.

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Business Insider/Mary Hanbury

Upstairs, menswear had a matching line of basic items.

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Business Insider/Mary Hanbury

But prices here seemed steep. Chino shorts were $69.50, for example, which is $37 more than an equivalent pair at Uniqlo.

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Business Insider/Mary Hanbury

Men’s athletic wear was also expensive with running pants costing around $90 a pair.

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Business Insider/Mary Hanbury

But most shocking of all was kidswear. The clothing seems almost as expensive as the adult’s clothing. Girls’ cotton dresses cost around $70.

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Business Insider/Mary Hanbury

… which is probably why this section of the store was empty.

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Business Insider/Mary Hanbury

We definitely felt there was an improvement in womenswear but overall the prices still felt high across the store.

The bottom line: J. Crew’s new leadership will have to make the store more competitive on prices in order to turn the brand around.