J.Crew

Outline for Presentation

J.Crew

Conclusions and Recommendations

I. History and Overview of J.Crew

- Jasmine Swift

II. Retail Industry and Competative Analysis

- Rebecca Gornto

III. Analysis of J.Crew's Marketing Program

- Molly Christians

IV. SWOT Analysis of J.Crew

- Alison Ledbetter

V. Future Recommendations and

Concluding Remarks

• Televised sponsorships similar to Polo and the Olympics
• Create Sportswear line
• Selling a "Lifestyle"
• Focus on the Family

Weaknesses

• On Google, they are categorized as $$$ out of four.
• Viewed as expensive
• Limits them from developing into new markets with new products.
• They don’t own any manufacturing facilities and rely solely on independent third party vendors for their products.
• (95% of their merchandise came from foreign factories. 72% from China, Hong Kong, and Macau.)
• No long-term merchandise supply contracts with their suppliers.
• Baby Clothing Supply line huge failure

A main staple in fashion meshing traditional with trendy, made with the best quality.

Strengths

• Loyal customer base
• Known as a quality, classic brand
• Know their particular target market
• They are internationally minded
• Just opened stores in Canada. Plans for Europe and Asia.
• Can order online in many other areas.
• They added 29 stores in fiscal 2011: growth
• Factory Store online
• Student/Teacher Discounts

SWOT Analysis

Opportunities

• Spreading more internationally.
• Asia and Europe
• Even more in Canada
• Expand Lingerie Line
• make special collection
• Famous Jewelry, expand line into special collections rivaling Yurman

Threats

Other clothing distributors coming out with the same styles but at a cheaper price.

• Where the company can take their brand and style in the future since they are deeply rooted in the classic, contemporary wear.

Declines in consumer spending because apparel and accessories are normally discretionary purchases.

• Competition’s size and resources may allow them to compete more effectively.

How up to date they are on fashion trends.

• Since they do import the majority of their merchandise from foreign countries, importing laws, tariffs, fluctuations in the value of relative foreign currencies.

Fluctuations in demand for raw materials in those foreign countries.

• If their independent manufacturers don’t use ethical business practices.

Industry and Competition

A look into the retail market segment

and analysis of competition

Who is their Competition

$$$

15-55 years, women and men, upper middle to upper class

$$

Professional, educated, middle class, ages 35-54

$$

Ages 25-35, middle class

Catalog

Credit Card

Quality

Atmosphere

Industry and

Competition

Who is their Competition

$$$$

All ages, wealthy professionals, luxury hobbies

$$$

Ages 25-35, Middle Class

$$

Slowing changing to younger generations, usually older, middle class

Industry- Specialty Retailing

Mature

Competition- INTENSE

Sell under own, private label

Diverse product lines within industry (apparel

to accessories to electronics)

Store chains in malls, street locations, and outlets

Mostly direct channel to customers (online, store, catalog)

Affected by economy trends

Product – Development Process

Retail Industry

Product

Lead men’s and women’s designers Frank Muytjens and Tom Mora said that idea generation stems from people watching, books, movies, art, and architecture

• Color schemes is a top priority when it comes to design
• Example: jcrew.com provides pre-made color swatches and products organized by color in the current 101 Gift Ideas promotion

More than 14 million employees in America

Retail (apparel) spending totaled $1.11 trillion in 2011

Cyclical, affected by economy

Tough competition

In 2011, e-commerce sales grew 13.7%

New collection introduced each season

• “Story Line” for that season inspires specific style designs

Trending colors and patterns are integrated

• Example: J.Crew Pinterest

Product - Design

Marketing Mix

Price

4 Product Lines to display always evolving image, attention to details, high quality, and consistent fit

• J.Crew Retail stores
• J.Crew Factory stores
• Crewcuts
• Madewell

FACTORY TISSUE SCARF was $39.50 select colors $34.50 item 17394

Brand Objectives

the hill-side® diamond-quilted scarf

$127.00  Item# 22001

Product

• Unique, organic designs made at the highest level of quality

Price

• Vast price range of products

Place

• Exclusive distribution intensity

Promotion

• J.Crew catalog, multiple Social Media channels

Total Quality Management

• J.Crew holds a standardized marketing mix
• Consistent high quality
• Specific target market based on demographics
• Diversification of products and brand line extension

Pricing strategy: “We offer our customers a mix of select designer-quality products and more casual items at various price points, consistent with our signature styling strategy of pairing luxury items with more casual items” –J.Crew Group, Inc.

• Value-based Pricing Strategy
• Example of Product Line Pricing Strategy: J.Crew factory stores versus Madewell stores

Quick video clip from CNBC documentary on J.Crew CEO Mickey Drexler.

“J.Crew® is a nationally recognized apparel and accessories retailer that we believe embraces a high standard of style, craftsmanship, quality and customer service. We are a fully integrated multi-channel, multi-brand, specialty retailer. We seek to consistently communicate our vision of J.Crew through every aspect of our business, including through the imagery in our catalogs and on our Internet website and the inviting atmosphere of our stores.”

- J.Crew Group, Inc. (JCG)

Total Quality Management

Product - Suppliers

Place - Direct

Strict span of control with CEO Mickey Drexler

• Inspects
• Ensures
• Creates

Product – Development Process

Offers all products available as well as extended sizes and colors

Markets uniquely designed products only found on their website

• Promotes temporary targeted market campaigns
• Example: 101 Gift Ideas for Christmas

J.Crew partners

• Sperry, Timex, Red Wing

Customized products to fit J.Crew’s requirements based upon merchandise vision

• Example of a individual supplier: Quoddy hand-made moccasins in Perry, Maine. J.Crew sells these shoes in New York, Chicago and Los Angeles

Direct distribution strategy

Intermediary in global sales outside of U.S.

• Serves as a tool for market research on new products and markets
• Example: Seen high sales from Hong Kong, China so J.Crew plans to open a store

Place - Stores

• Design team takes product to Senior Management and is carefully inspected
• Technical Design team makes sure each new product is constructed in high quality and fits into each specific brand line
• Jcrew.com used for test marketing

Map of J.Crew Factory Store Locations

Price

Promotion

Parallel to all other types of distributions used, the majority of locations are in the East to South East.

All stores are “sized to the market” meaning the square feet depend on how much business the location is generating

• The largest retail store is located in New York and the largest factory store is in Connecticut
• Designed to express clean, sophisticated and welcoming feel

266 retail stores and 362 factory stores

• 8% growth
• J.Crew
• crewcuts
• Madewell

Promotion - People

• Demand elastic
• 2009 revenue $1,578,000,000
• 2011 revenue $1,855,000,000
• Higher prices than most competitors work because of the perceived value J.Crew customers see in the quality products
• New limited edition “collection” product line priced higher intended to raise customers perceived value of the entire brand

Promotion –Social Media

COLLECTION CASHMERE

FAIR ISLE TURTLENECK

$650.00 item 21905

ANCHOR SCARF

$98.00 item 23422

MACALISTER OXFORDS IN SUEDE

$148.00 item 10427

“The Romantics” (2010) dressed characters in J.Crew attire advertising towards the younger 20-somethings

• Pictures with the cast in the J.Crew catalog creates joint equity for both the company and the movie

Michelle Obama wore a J.Crew outfit from head to toe on her appearance on Jay Leno

• Proud to have a famous icon of professionalism and determination creating brand awareness

Examples of J.Crew’s broad Price Range Items (All products from jcrew.com)

Promotion – E-tailing

Facebook page

• Daily status updates
• Example: After black Friday their status read “Give us the scoop: what did you buy during yesterday’s Black Friday blowout?”

Pinterest profile

• Displays artsy photos of design inspirations

Promotion – Print Advertising

Jcrew.com is not only used as a sales channel but as well as a promotional venue

• Photography parallel to the J.Crew catalog using designer quality photos and realistic life situations
• Example: Videos integrated with pictures of the products to display an entire outfits. Under the men’s department there is a model wearing one color scheme of a button-up shirt, sweater, jacket, watch, corduroys and boots carrying a Christmas tree and interacting with the camera.

J.Crew catalog primary function is to promote and advertise the brand and products

• Visuals of the high quality, traditional, preppy products seen in the store layout incorporated into everyday usage of the products
• Professional, designer quality photos

4.1 billion catalogs in 2011

An in-depth analysis of J.Crew's Market Strategies and Marketing Mix.

Overview of J.Crew

MarketingProgram

Products

Personal Shoppers

Clothing

• Men’s formalwear
• Menswear
• Swimwear
• Womenswear
• Jeans and Pants

3 styles:

• Everyday Fit, Favorite Fit, City Fit

Wedding

• Bridal Gowns
• Bridesmaids Dresses

Line Extensions

Crewcuts (Kids)

J. Crew wedding’s and parties

J. Crew Collection (Limited-edition and exclusive items)

Madewell

New specialty shops for men and women.

Shoe and handbag salons

Products

Breif history background

and products sold

Accessories

• Cuff Links/Notions
• Handbags
• Men’s hats/Women’s hats
• Jewelry
• Lingerie/Hosiery
• Men’s shoes/Women’s shoes

Timeline

August 2011: J. Crew goes global. Opened first Canadian store.

2012: Released e-commerce site in over 100 countries.

2012: Re-launched personal shopper program.

2012: Taking steps to move into Asia and Europe.

Timeline

2006: Drexler took the company public again.

2008: Debuted the extremely popular Ludlow suit

2010: Madewell.com launched March

2011: Taken off stock exchange in 3 billion dollar buyout. Acquired by TPG Capital and Leonard Green &Partners

Timeline

Overview of J.Crew

Timeline

1997: Company sold to Texas Pacific Group

2002: Mickey Drexler fired for decline in Gap’s fortunes

2003: Mickey Drexler took over as CEO.

2004: Hired Frank Muytjens from Ralph Lauren to be men’s designer.

2006: Introduction of Madewell (modern interpretation of an American denim label founded in 1937)

Products

Clothing

Men’s formalwear

Menswear

Personal Shoppers

Swimwear

Womenswear

Jeans and Pants

3 styles: Everyday Fit, Favorite Fit, City Fit

1938: Founded as a mail-order business by Arthur Cinader

1983: J. Crew began mailing catalog

1988: Launched J. Crew factory

1989: First store opened in Manhattan.

1996: Started J. Crew website.

• J. Crew debuted in 1983 with the mailing of its first catalog.
• 1989 J. Crew opened its first store in Manhattan, NY.
• In 2003, Mickey Drexler took over as CEO after his work with Gap and Ann Taylor

Pushes service, quality and innovation