Mickey Drexler Is Stepping Down From J.Crew

Lucy Hill
June 6, 2017

Sales fell 6% in 2016. J.Crew is trying to atone for its missteps by lowering prices and pivoting its marketing strategy, slashing prices on approximately 300 items. Drexler, who will stay on as chairman, invested $100 million into J. Crew and owns 10% of the company.

Prior to the J.Crew Group, he was at Gap Inc. for 18 years and is credited with turning it into the retail giant it is (even launching Old Navy). "There's excitement about J. Crew and [sister brand] Madewell - brands that people love and admire".

"Given elevated leverage, deteriorating operating trends and negative cash flow projections, debt restructuring risk is increasing in advance of J.Crew's May 2019 holdco note maturity ($567 million due)", Fitch said, predicting that the company will lose between $50 million and $60 million of free cash flow in 2017. Brett will assume the CEO position this July and will also join the Company's Board of Directors. "I am relaxed-ish", Drexler told WWD, which had an exclusive interview about the change at the top of the retail company.

"This is an exciting time for J.Crew as we continue to make significant changes to position our company for long-term success", Drexler said in a statement.

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"Jim has a proven track record of pushing for innovation and growing omni-channel brands", said Drexler in his statement. West Elm's former CEO Jim Brett has been named as his replacement.

Brett most recently served as President of West Elm, a member of the Williams-Sonoma, Inc. portfolio, since 2010, where he oversaw all aspects of the brand.

Despite the risks, Silverman remained optimistic that J.Crew can turn its situation around. Young millennial consumers often prefer the deals and eclectic offerings proffered by e-tailers and brands like H&M and Zara as opposed to the more focused offerings championed by Drexler during both his time at Gap and J. Crew.

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