Dive Brief:
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J. Crew Friday said it’s opening its first “J. Crew Mercantile” store in Dallas later this month, and plans to open more nationwide at some point.
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The struggling retailer, which recently laid off 175 staff at its headquarters and replaced its head women’s designer, has developed the “Mercantile” brand to house the same products that are specifically designed and manufactured for its outlet stores.
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The brand is akin to Gap Inc.’s Old Navy brand, which is a lower-priced retailer that has been outperforming Gap’s namesake brand.
Dive Insight:
J. Crew’s reputation for high quality and classic design has taken a hit recently, with some previously die-hard fans saying the retailer has abandoned those attributes to the point where its apparel isn’t worth the extra money anymore.
J. Crew CEO Mickey Drexler likely knows what he’s doing — two decades ago he's the one who came up with Gap’s Old Navy brand, which has solidly outpaced Gap for several quarters now; last quarter U.S. sales there were nearly double that of Gap’s.
But what about J.Crew’s outlet stores? Are they to be rebranded as Mercantile stores? Is there overlap or are the two concepts interchangeable?
When you think of Old Navy, a J. Crew Mercantile brand could make sense, at least if it isn’t seen as simply a cheap knock-off of the namesake brand. For that reason, it’s curious that the company is including “J. Crew” on the label — a move that risks increasing expectations for quality or diluting the reputation of the namesake brand itself.