Dive Brief:
- Saying “the time is right for a new chapter,” J. Jill CEO Claire Spofford on Wednesday announced her plan to retire from retail, her career for nearly 30 years. She leaves her posts as J. Jill’s president and chief executive in April, and the board has begun a search for her successor.
- Spofford was tapped to lead the women’s apparel retailer in 2020, shortly after its flirtation with bankruptcy, and took the post in February 2021. She has also had leadership positions at Cornerstone Brands, Garnet Hill, Orchard Brands and Timberland.
- The news comes as J. Jill reported Q3 results that analysts found fairly encouraging: Q3 net sales of $151.3 million were essentially flat to last year, with comps down 0.8%. Hurricane-related disruptions siphoned 50 basis points due from store comps, per a company press release. Gross margin dipped to 71.4% from 72% a year ago, and net income and total comprehensive income rose 6.3% to $12.3 million.
Dive Insight:
J. Jill’s tepid results in Q3 are nevertheless a victory of sorts, given that four years ago the retailer avoided a bankruptcy filing thanks only to an 11th-hour deal with lenders. The women’s apparel specialist is still encountering some reluctance to shop, executives said on Wednesday.
“As we look to the holidays, while we have not yet seen the robust return of the full-price customer that we saw earlier this year, we are continuing to engage with our consumer with festive holiday sweaters and accessories and flowing newness regularly,” Spofford said on an earnings call.
On Thursday, William Blair analysts led by Dylan Carden credited Spofford with setting the retailer on a trajectory from near-bankrupt to resilience in a tough consumer environment, writing in a client note that she has “led the company into a new era of better cash flow generation through disciplined inventory management.”
Jefferies analysts similarly called out the company’s strong management team, controlled inventories and healthy balance sheet.
“We believe [J. Jill] is well-positioned to drive sustainable sales and margins, given the company's operational discipline and focus on profitable growth,” they said in a Thursday research note.
This operational control includes a slow but methodical expansion of the company’s store fleet, with a goal of opening 50 net new stores over the next five years, according to Chief Financial Officer Mark Webb.
At quarter’s end, the retailer was running 247 stores, after closing a hurricane-damaged store in Asheville, North Carolina, this year and opening one net new store last year. In Q3, the company opened three new stores: in Atlanta, the seventh in that metro area; Virginia Beach, Virginia; and Colorado Springs, Colorado.
“We are excited to continue expanding the fleet,” Webb said. “New stores represent an opportunity to capture new customers, grow awareness and deliver healthy financial results with payback periods just under three years and healthy cash-on-cash returns of over 30%.”
