J.Crew To Promote Sustainable Profit Growth Or To Restructure Management And Staff Structure

Facing the debt crisis, it is possible to go bankrupt.

Group Inc. continues to deepen the restructuring of management and personnel structure, in order to improve the efficiency and vitality of the group and promote sustainable profit growth in the current situation of continuous sales backwards.

Following the announcement of the original president and creative director Jenna Lyons at the beginning of the month, the group today further J.Crew

In the management of the group's chief operating officer and chief financial officer, Michael Nicholson, let the former Ann Inc. president, COO and CFO, who joined in January 2016, assume the central role of revitalization group business, while J.Crew brand President Libby Wadle is pferred to the Madewell brand president.

Meanwhile, Lisa Greenwald, senior vice president of Madewell brand sales, was promoted to chief sales officer of J.Crew brand, reporting to Michael Nicholson.

In addition, 150 full-time jobs and 100 vacancies in the group were revoked, mainly affected by the positions of group headquarters.

The Group expects to generate $10 million in severance expenses and other layoffs in the first quarter, but it can save $30 million in pre tax expenditure each year.

J.Crew Group Inc. chairman and chief executive Millard "Mickey" Drexler said in the announcement that the decision to lay off staff was difficult and necessary. The group promised to support the affected employees through this period.

He pointed out that streamlining the team is the need for business development, simplifying the process is a new demand for accelerating the pformation of the retail industry.

The group currently has 278 J.Crew stores, 115 Madewell stores and 179 factory shops.

They are in the same boat with many traditional retailers. They are affected by the decline of retail passenger traffic and the impact of Internet sales. The same store sales have been declining in the past 10 quarters.

According to the world clothing and shoe net, the same store sales in the 2016 and 2015 fiscal year J.Crew Group Inc. recorded a decline of 6.7% and 8.2% respectively, and they failed to make profits for two consecutive years. The net loss in the 2016 fiscal year was 23 million 500 thousand US dollars, which has narrowed considerably more than the 1 billion 242 million 700 thousand dollar in the 2015 fiscal year (including the impairment loss of 1 billion dollars).

The debt was formed by privatization of private Holdings Company TPG Capital LP and Leonard Green&Partners LP in 2011 for $3 billion, which is now regarded by analysts as one of the classic cases of retail failure LBO.

At the end of 2016, the long-term debt of J.Crew Group Inc. was US $1 billion 494 million 500 thousand, which was 8 times the adjusted EBITDA 1.885 billion US dollars.

The group submitted a 8K document to the US Securities Regulatory Commission SEC on Friday, saying its parent company Chinos Intermediate Holdings A, Inc. and creditors did not reach an agreement on debt restructuring.

More importantly, J.Crew Group Inc. pferred the intellectual property rights of the core brand J.Crew to the offshore entities of the Cayman Islands at a price of $250 million, which the creditors believed would make them unable to use J.Crew brand as collateral, and their shareholding value would also be weakened. Therefore, a lawsuit was initiated to require the group to withdraw the pfer of assets.

And the market believes that creditors' contention for IP means that J.Crew Group Inc. is on the eve of bankruptcy.

In the first 7 weeks of the current fiscal year 2017, the J.Crew brand's same store sales decline increased from 7% in the 2016 quarter to 7% in the fourth quarter of fiscal 2016. Although the Madewell brand achieved 6% and 5% growth in the fourth quarter of fiscal year 2016 and the whole year, the brand accounted for only 15% of the group's income, and the successful strategy of the cowboy centered business has been followed by other retailers.

Mickey Drexler said in its annual report released at the end of March that the group will not be able to reverse its difficulties in closing the 20 loss stores (and opening 12 new stores) in fiscal year 2017.

Although the US retailer is currently in a state of bankruptcy, J.Crew Group Inc. not only has an annual income of 2 billion 400 million dollars, but also has two godfather of "retail Godfather" Mickey Drexler and the former president's "Michel Obama's favorite brand". If the group goes bankrupt, its impact will be even more far-reaching.

Jenna Lyons, a group figure two, was shocked by the news of its departure after serving 26 years.

Jenna Lyons has always been the "woman behind Millard Drexler". In 2012, she was promoted to her present position and became the real spokesperson of the J.Crew brand. She was even dressed as a church generation of American women.

Expert.

J.Crew Group Inc. has upgraded the original dress designer, Somsack Sikhounmuong, to the group's chief design officer.

Analysts pointed out that the group could use the opportunity to abandon Jenna Lyons to repair the current identity crisis - either to improve the quality of products that meet the current price, or to reduce prices in response to gradual deterioration of quality. The strategy of large discount sales and the concept of factory store retail also need to be reassessed.

More interesting reports, please pay attention to the world clothing shoes and hats net.