J.Crew’s Glory Days May Be Key to Its Resurrection

After a bankruptcy filing, the brand is looking at a new start

J.Crew storefront
J.Crew filed for Chapter 11 bankruptcy protection on Monday.
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Key insights:

J.Crew has always been known for its preppy sensibility, fueled by a selection of classic pieces, like cable-knit sweaters and chino shorts, mixed with a trendier touch including sequins, bows and a few ruffles. This week, J.Crew is known for becoming the first retailer to file for bankruptcy amid the Covid-19 pandemic.

It indicates how far the brand has fallen. Once, it was the ideal of a mall brand: carrying high-quality items people wanted to buy, and that were fashionable enough to attract the attention of the bigwigs in the industry.

In recent years, though, shoppers have complained about quality, discounts, sales so ubiquitous that consumers know to never pay full price, and styles that no longer resonate with its target audience.

A photo from a J.Crew catalog
J.Crew

“It came in and it was super hot, with great quality that blew customers’ minds,” said fashion writer Christina Binkley. “Then comes the huge expansion, and quality drops, prices drop. The brand has really never found its magic again since then.”

Bankruptcy isn’t the end of J.Crew’s story: Since the brand is filing for Chapter 11, it will restructure, not liquidate. J.Crew’s recent bankruptcy news is more of a sign of an unmanageable debt load and the risks of a private equity-funded leveraged buyout than a tale of a brand that’s lost its grip on its consumer. The brand’s glory days are arguably behind it,  but it has room for redemption: A loyal fanbase remains—and if social media is any indication, even more consumers are waiting in the wings to return when the company finds its footing again after three years of a rotating executive team, and perhaps with a more specialized approach to its business.

J.Crew has always held a comfortable place in the retail hierarchy: When it started, its wares were enough of a splurge that buying them felt special, but affordable enough to still be accessible to the average American consumer.

“They were like the upscale version of Gap and the downscale version of Ralph Lauren,” said Bob Phibbs, CEO of the New York-based consultancy The Retail Doctor.

An image from a recent J.Crew catalog
J.Crew

In the ’80s, the brand launched as a catalog, which would go on to be one of its most powerful tools, depicting what appeared to be the ideal preppy lifestyle. Its first store opened in downtown Manhattan in 1989. The ’90s were tougher—TPG Capital, a private equity firm, purchased a majority stake in 1997 in a bid to boost the business.

Everything changed in 2003 when retail veteran Mickey Drexler, formerly of Ann Taylor and Gap, took over as CEO. He joined forces with Jenna Lyons, the vp of women’s design who would go on to be the brand’s president and creative director. Over the next decade, the retailer saw its sales peak. (That’s thanks in part to then-First Lady Michelle Obama, who wore J.Crew on numerous occasions.)

By the mid-2010s, it hosted a presentation every season during New York Fashion Week, and Lyons had become a fashion icon, famous for her print-mixing and affinity for feathers.

Lyons’ own aesthetic represented the path J.Crew had taken, a decidedly more high-fashion take than the classic pieces it had built its devoted fanbase around. A prime example of the phenomenon was the debut of a line called “Collection,” with items closer to couture—and at a higher price point.

In that moment, “the fashion world was hands down in love with J.Crew,” said Binkley.

But, there was a fatal flaw to J.Crew’s love affair with the fashion world.

“When you looked at the numbers, it turned out that it was really only the fashion [world],” added Binkley. “It was appealing to a limited segment of very fashion-minded people.”

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