By Maria Armental
J. Crew Group Inc. swung to a loss in the third quarter as the
privately held retailer wrote down the value of its retail-store
operations and posted other related charges.
The New York retailer warned it may book further write-downs in
future quarters.
J. Crew, which started in 1983 when it mailed its first catalog,
is trying to broaden its customer base by launching a new company,
J. Crew Mercantile, that would price clothing and other merchandise
higher than the retailer's outlet stores but lower than its
full-line stores, The Wall Street Journal has reported, citing
people familiar with the operations. J. Crew's Chief Executive
Millard Drexler made a similar move when he was CEO of Gap Inc. and
launched Old Navy.
The retailer--taken private in a $3-billion 2011 deal by TPG
Capital and Leonard Green & Partners--is also working on a
potential initial public offering, the Journal has reported.
For the period ended Nov. 1, the company reported a loss of
$607.8 million, compared with a profit of $35.4 million a year
earlier. J. Crew logged write-downs of $536 million tied to its
stores reporting unit and $145 million for its trade name.
Revenue, meanwhile, rose 6% to $655.2 million, although sales at
existing stores, a closely watched metric that compares sales at
stores open for at least a year, fell 2%.
Gross margin narrowed to 40.2% from 43.9% a year earlier.
As of Dec. 4, J. Crew operates 281 J. Crew stores, 83 Madewell
stores and 138 factory stores in addition to associated websites.
J. Crew, which opened its first retail store in 1989 in New York's
South Street Seaport, opened two stores in Hong Kong in May,
marking the retailer's return to Asia after it pulled out of Japan
in 2008.
Write to Maria Armental at maria.armental@wsj.com
Access Investor Kit for Gap, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US3647601083
Subscribe to WSJ: http://online.wsj.com?mod=djnwires