About J. Crew Operating Corp.

The crews appearing in the glossy pages of J. Crew catalogs are far from motley. The retailer is known for its preppy fashions, including jeans, khakis, and other basic (but pricey) items sold to young professionals through its catalogs, websites, and some 465 retail and factory stores in the US, Canada, and now London under the J. Crew, crewcuts (for kids), and Madewell banners. Madewell is a women's-only collection of hip, casual clothes. CEO Millard "Mickey" Drexler, recruited from The Gap to revive J. Crew's ailing fortunes, has led a renaissance at the firm, capped by a public offering in 2006. J. Crew was taken private in 2011 by TPG Capital and Leonard Green & Partners.

Change in Company Type

TPG Capital and Leonard Green & Partners (LGP) bought J. Crew in March 2011 in a deal valued at about $3.1 billion, including the assumption of $1.6 billion in debt. They retained Drexler, who owns nearly 10% of the business. (TPG and LGP own the rest.) The buyout sparked numerous shareholder lawsuits, which were settled in September 2011 when investors, upset about the deal's mechanics, agreed to a $16 million settlement. Some investors accused Drexler of using the deal to enrich and entrench himself at their expense. Amid strong sales growth, the company is exploring going public again in 2014.

Geographic Reach

New York-based J. Crew has stores in 44 states and the District of Columbia. The US market accounts for essentially all of the retailer's sales. Beyond the US, it operates a dozen stores in three Canadian provinces: Alberta, British Columbia, and Ontario, and three in London.  J. Crew launched its e-commerce site to over 100 countries in 2012 and is looking overseas for brick-and-mortar locations.

Sales and Marketing

The retailer relies on the J. Crew catalog as the primary vehicle for marketing and advertising. The catalog, which drives in-store as well as direct sales, utilizes high-quality photography and art direction, to burnish the J. Crew brand. Beyond the book, the company relies on online, print, and outdoor advertising. Catalog costs totaled about $51.6 million in fiscal 2014 (ended January), up from $44.5 million the prior year. The retailer also offers a private-label credit card that accounts for about 16% of its total net sales. The chain's customers are affluent, college-educated, professional and style-conscious women and men.

Financial Performance

Shrugging off the Great Recession, J. Crew has enjoyed a decade of steady and, more recently, robust sales growth. Indeed, in fiscal 2014 (ended January) sales increased 9% to $2.4 billion, driven primarily by an increase in sales of men's apparel, specifically shirts, pants, and suiting, and women's clothing, specifically sweaters, knits, and shirts. Same-store sale rose 3%, after rising 13% in the previous annual comparison. The strong sales performance in fiscal 2014 came on the heels of a 20% jump in sales in fiscal 2013 versus 2012. While sales have risen steadily, profits have not. Indeed, net income fell 8% in fiscal 2014 versus the prior year, its third-consecutive year on a downward trend. Costs of good sold, including buying and occupancy costs, and other expenses, including interest and income taxes, were blamed for the profit decline in fiscal 2014. Cash flow from operations has, for the most part, kept pace with increasing sales.


To continue to grow sales, J. Crew is focusing on expanding its direct and retail store businesses internationally. The chain opened its first J. Crew stores in London in fall 2013 and is looking to expand to other countries in Europe and Asia. It entered the Canadian market in 2011. It's also adding stores at home, adding 50 locations in fiscal 2014. For the price-sensitive shopper, J. Crew is growing its factory store operation. J. Crew Factory stores are located primarily in large outlet malls and sell a specific line of merchandise tailored after products sold in the previous season at J. Crew retail stores and online.

The company credits its on-target fashion sense and lean inventories for its strong performance. (Of course, having the First Lady Michelle Obama sport its fashions probably didn't hurt either.) Sales are also getting a lift from the expansion of the Madewell and crewcuts formats (both launched in 2006). Fast-growing Madewell offers women's apparel, including a new line of suits, that is priced 20% to 30% lower than J. Crew merchandise at more than 65 stores.

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J. Crew Operating Corp.

770 Broadway Fl 1112
New York, NY 10003-9522
Phone: 1 (212) 209-2500
Fax: 1 (212) 209-8735


  • Employer Type: Public

Major Office Locations

  • New York, NY

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