J.Crew's Embattled Women's Side Could Learn From Its Thriving Menswear
There was a period of time when it seemed like J.Crew, helmed by Mickey Drexler and Jenna Lyons, could do no wrong. Its business was booming, its clothes were viewed as fashion-forward and stylish (even FLOTUS was behind them), and Drexler himself was being being described as something like a retail god. (Remember that CNBC special, J.Crew & The Man Who Dressed America?)
But lately, things have taken a darker turn. On Wednesday, J.Crew announced it had laid off 175 employees, mostly designers located in its New York headquarters. On a larger scale, thanks to a leveraged buyout by two private equity firms a few years ago, the brand is now saddled with $1.5 billion in debt. Its financial issues haven't been helped by the fact that J.Crew's women's clothes have been the recent subject of much documented consumer backlash—in part for being too trendy, too much the singular vision of Lyons herself (particularly one disastrous sweater called the Tilly). Now the finger-pointing has started in the wake of an earnings report that revealed sales were down 5 percent this quarter compared to the same quarter last year. Who's to blame? The rise of fast-fashion, athleisure, and Uniqlo?
Where does this leave J.Crew’s menswear business—a side of the company that, under the direction of Frank Muytjens, has notably steered away from the hyper-trendy, fast-fashion fringe? Very healthy, as it turns out. A former employee told us that while the men's side is not without its issues, relatively speaking it is very much outperforming the women's. Why is that? Here, we break down the ways J.Crew men's business has maintained stability within the retail market, and how its women's business could crib a thing or two from the other side.
Resistance to Trend-Chasing
J.Crew's women's business has been plagued by its attempts to compete with high-end, designer labels, namely with the addition of J.Crew Collection, a pricey line which only includes women's clothing and has its own dedicated storefront on the tony Upper East Side of Manhattan. The men's side, by contrast, features products in what could be considered a "mid" price point, with $70 button-up shirts, chinos, and one particularly great $600 dollar suit (we'll touch more on that later.) There is a slightly higher priced line called Wallace & Barnes, which is basically the passion project of men’s design chief Muytjens. Unlike Collection for women, Wallace & Barnes pieces are often amped-up versions of Americana classics and reissued real vintage pieces—not chasing new trends. Across the board, our source told us that non-J.Crew goods for sale in-store—like Mackintosh, Chimala, and Birdwell—consistently are outsold by the house brand. High fashion just doesn't work there.
It's in classics where J.Crew men's has thrived, serving up clothes that men will never, ever get sick of. Sure, there was a period when the Don Draper look hit its peak and every guy was nerding out over the latest pair of wingtip brogues, but since then J.Crew men's has evolved slowly to be a one-stop-shop for good-looking businesswear (a full-line of slim dress shirts, ties, belts, etc.), casualwear (think the now infamous "J.Crew gingham shirt"), and recently, sneakers. But even in that category you won't find any crazy high-tops in neon colors. Rather, it's staples like Vans, Nike tennis classics, and New Balance that line the shelves. These are products that have already earned their place within the pantheon of men's wardrobe staples. J.Crew simply makes them better.
Ladies Love Their Yoga Pants (Men, Less So)
Walk around New York City on any given Sunday and you'll probably feel like there's some public SoulCycle class going on you weren't invited to. That's because women have become obsessed with the idea of "athleisure," a look defined by basically wearing workout gear 24/7. What it means for J.Crew is that ladies are subbing in yoga pants for jeans faster than you can say “spandex”—but the label hasn’t necessarily responded in kind. Between 2013 and 2014, jeans sales in the U.S. fell 6 percent, while yoga pants are becoming the new standard for women. Sales of them and other athletic wears rose 7 percent. Additionally, sales of yoga gear in general rose 45 percent last year. This isn't the end of denim at large. But J.Crew's best performing brand is Madewell, a women’s-only store whose main category is denim. So the market’s tilt to athleisure doesn't bode well for Madewell's future health, even if Mickey Drexler told The New York Times, “I would like Madewell jeans to be the Levi’s of its generation.” The same aforementioned former employee told us that J.Crew has no internal plans of chasing the athleisure trend. Maybe it's too late anyway.
And, yes, while men are certainly catching on to the idea of slim sweats and performance wear in general (we actually prefer the term "sportscore"), most guys don't wear yoga pants, so their jeans are not at huge risk of being totally replaced at brunch.
J.Crew Men's Owns the Most Important Category in Menswear
Our source told us that J.Crew's menswear has remained healthy even amidst the company's downturn in large part because of two words: Ludlow and Crosby. These two suits, the Ludlow being the slimmer version of the two, have become the go-to for editors and everymen alike because they perfectly strike the balance of style and price. Most come in right around $600, and because of the lack of competition at that price point (Suitsupply is surely doing all it can to change that), a lot of guys have turned to J.Crew for their suiting needs, from the suit itself to shoes, shirts, ties, socks, even tie bars. And rather than let it just be successful and reap the benefits, J.Crew men's has doubled down on its suiting business and turn it into its own fully formed subsection. Lots of J.Crew stores around the country now feature dedicated Suit Shops and our source informed us that these sections sometimes outperform the women's departments, which has lead to internal conversations about converting some traditional J.Crew stores into men's-only destinations. Our source did admit that this summer has been rather hard on certain summer-centric suits, like those in linens, cottons, and patterns, but that the category in general remains strong.
Meanwhile, J.Crew women's doesn't have one particular category that women know them for. Maybe at one time it was sweaters, but we saw how that's gone recently.
Men's Online Shopping Is Booming
According to Quartz, menswear ecommerce grew 17.4 percent between 2010 and 2015, the largest category of growth in the online shopping industry. That's great news for J.Crew's menswear future, though it doesn't do much to help the women's side. In fact, our former employee source informed us that over the past three years, J.Crew men's has begun to represent a larger part of the label's overall revenue than ever before (though he did not share exact percentages or sales figures). Perhaps the answer for J.Crew doesn't simply lie in fixing what's wrong with its women's clothes—maybe it’s also about embracing the influence, cachet, and staying power of its menswear.