Dive Brief:
-
After flirting with bankruptcy amid some of the toughest challenges to retail during the pandemic, J. Jill on Tuesday reported expanding margins and better-than-expected sales results. Net sales in Q3 dipped 1% year over year to $150 million, as comp sales (including stores and e-commerce) fell 1.2%.
-
As the women’s apparel retailer kept a lid on both expenses and promotions, gross margin expanded by 100 basis points to 69.9%, according to a company press release.
-
Inventory was up 5.7% from a year ago, in part due to earlier receipt of holiday merchandise. Gross profit edged up 0.5% to $105 million, as net income shrank 20.6% to $8.9 million.
Dive Insight:
Like most retailers, J. Jill this year has noticed some consumer wariness around buying unnecessary items. But CEO Claire Spofford on Tuesday told analysts that careful merchandising, rather than discounts, has successfully coaxed shoppers in.
“While we did begin to see some hesitancy from customers as inflation and macroeconomic concerns increased, she continued to find pieces she likes to remain willing to pay full price for unique and special items, which we float regularly throughout the quarter,” Spofford said, noting that “unique pieces” and dresses both sold well.
“We continued to see very little price resistance for products that were truly unique and special,” she also said.
The retailer is expanding its customer base by making clothing for more people and merchandising more inclusively, she said. In August, J. Jill announced changes to its sizing methods and merchandising approach, doing away with missy and women’s, presenting styles in a full range and instituting price parity across sizes.
J. Jill is also piloting an elevated collection dubbed Pure Jill Elements in seven stores, aimed at customers 35 to 55 years old and featuring “special artisanal pieces designed for the customer who is a fabric enthusiast and who values unique details that can command a higher price point,” Spofford said. “Early reads from this pilot have already provided helpful insights and opportunities where we can potentially stretch our value proposition over time.”
