J. Crew stores to feature Madewell shop-in-shops

Dive Brief:

On Feb. 26, J. Crew will begin offering merchandise from the company's denim-focused Madewell brand in some J.Crew stores, the company told Retail Dive in an email.
Madewell will introduce shop-in-shops inside six J.Crew store locations, in New York City (at a new location at Columbus Circle), Florida (Tampa and Aventura), Iowa, New Hampshire and Connecticut, and there is also a new Madewell store opening in New York on the Upper West Side, the company said. To celebrate the new Columbus Circle location, on March 1-3 the company is hosting Western chain Stitch Collective Ft. Lonesome for a residency where they can chain-stitch names and exclusive New York-themed patches on Madewell denim, according to the release.
Former CEO Mickey Drexler, who also pioneered Gap Inc.'s similarly positioned Old Navy brand, launched Madewell in 2006. Old Navy has gone on to outperform its higher-priced sibling and is the fulcrum of Gap Inc.'s current growth strategy, but Madewell is too small a brand to move the needle much for struggling J. Crew.

Dive Insight:

Madewell, a 78-year-old clothing company purchased by J. Crew 23 years ago, is in many ways filling a gap left by … The Gap, selling high-quality jeans and other items at attractive price points to the older-than-teenagers crowd, but hasn't grown enough to balance the plummeting sales at the company's flagship. Some analysts have wondered if the smaller unit could be spun off to capture its value, as J. Crew has struggled not just with fashion misfires and quality problems but also with crushing debt. Longtime CEO Drexler stepped down over the summer amid the retailer's debt-burdened struggles.

In November, as J. Crew reported a devastating third quarter — total revenue fell 5% to $566.7 million against the year-ago period and same-store sales fell 9% — new CEO James Brett promised that he was working to "reinvigorate the J.Crew Brand to reflect the America of today." The sales numbers were announced along with the brand's plans to shutter 50 stores in 2017 and another 39 for the fourth quarter.

The retailer's massive debt load has interfered with the brand's performance and prospects, but despite its troubles, J. Crew retains a strong identity, which could make a closer association between Madewell and J. Crew a win for each.

Last week, the company tapped Adam Brotman, Starbucks executive vice president of global retail operations and partner digital engagement, to become president and chief experience officer. His arrival comes amid evidence that Amazon is swiftly rising in apparel, including its own private-label lines, particularly among young people. In a statement emailed to Retail Dive, he called J. Crew "already an iconic brand" and said he would work to help "build world-class customer experiences across every touch point, whether technology or digital platforms, in-store, or at the intersection of both."