Crew’s New Captain: Can Drexler Reverse Ailing Brand’s Drift?

NEW YORK — Texas Pacific Group may have finally found its J. Crew exit strategy in Millard Drexler.The investment group Monday named former...

Aside from playing board politics, Drexler’s turnaround skills will be tested — especially since it’s not the kind of turnaround he’s used to. Crew has a catalog business that appears maxed out in growth potential, despite all the experimentation in recent years with new formats and categories. Even more significantly, Crew has never gotten its retail business in sync with its catalog business. Its 152 stores don’t project the lifestyle image and energetic mood of the catalogs. Moreover, both divisions are challenged to differentiate from other American brands, like Ralph Lauren, Abercrombie & Fitch, American Eagle Outfitters and even Gap’s own Banana Republic.

Growth through retail buildup is precisely what TPG is hungry for, even during a period when analysts contend the U.S. market is substantially overstored. J. Crew has only about 100 full-price stores, after about 15 years in retail, ever since the first J. Crew store opened in the South Street Seaport here. A former ceo, Mark Savary, now at Pepperidge Farms, once said Crew could operate at least 300 stores. This year, only four stores are slated to open.

"It’s been screwed up for so long, but the brand is absolutely salvageable. Mickey will look at the product and rejuvenate the brand," predicted Martin Richter, vice president of the Kazu Apparel Group, a private label supplier.

Drexler took a first step at boosting morale by addressing Crew’s entire crew of around 400 at the 770 Broadway headquarters here Monday morning. He said he would be fine-tuning fall product, and believes there’s huge growth opportunity for the brand, but didn’t specify any immediate plans or strategies. One possibility aside from rolling out J. Crew stores is to introduce J. Crew kids’ stores next to the adult stores. Drexler was very successful rolling out GapKids.

While everyone is applauding his return to the industry after leaving Gap, not everybody is convinced Drexler still has the magic touch. Several also pointed to Drexler’s lack of operational skills, which were exactly what the Fisher family at Gap sought when they found a replacement for him. Pressler has no apparel merchandise experience, but is considered strong on operations.
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