Dive Brief:
- Longtime J. Crew CEO Mickey Drexler has announced his resignation and current West Elm President James Brett has been tapped to take the reins starting mid-July, according to a company press release.
- The announcement, which confirms a December report from WWD that executives had been searching for a successor, comes just two months after the departure of style guru Jenna Lyons. The company has reportedly been in talks to restructure its approximately $2 billion debt load for several months.
- Drexler, who has been CEO since 2003, will continue to serve as board chairman. “I am relaxed-ish,” Drexler told WWD on Monday. “It’s a large day for me. I have been running companies for 37 years and the announcement today is a major change in my life… I am excited about where the team is and the strategic plans we have. There’s excitement about J. Crew and Madewell — brands that people love and admire.”
Dive Insight:
Drexler, who will turn 73 in August, has been running companies for 37 years and he feels “relaxed-ish” about handing over the reins of the business he led for over a decade. “I thought it was time to move on and lessen up on the day to day,” he told WWD. “The [succession] plan had been in motion for some time. I told the board a year ago I was ready to set down and move to chairman. We worked together looking for the right talent to lead the next phase of growth… When we found Jim we knew had to move quickly.”
The executive shakeup comes after months of rumored talk of a possible debt restructure at J. Crew. In October, Drexler reportedly began huddling with consultants at McKinsey & Co. on a strategy to turn the struggling apparel retailer around. But things haven’t gotten much better.
In February, the company filed suit in New York State Supreme Court, Commercial Division, alleging that an ad hoc group of lenders aimed to disrupt its capital restructuring plans. The struggling apparel retailer is in discussions with creditors to renegotiate its approximately $2 billion debt load. Over the years, J. Crew has disappointed many of its most ardent customers by cutting back on the quality of make and fit.
Six years after TPG Capital LP and Leonard Green & Partners L.P. acquired J. Crew for $2.8 billion, taking it private, the merchant is the latest in a string of retailers whose turnaround capital needs have bumped up against the profit-taking goals of private equity owners.
