J.Crew has filed for bankruptcy: The rise and fall of America's iconic preppy clothing brand

Mary HanburyMay 4, 2020, 20:25 IST

Getty/Spencer Platt

J. Crew filed for Chapter 11 bankruptcy on Monday.
The company said it had reached an agreement with its lenders to convert about $1.65 billion of its debt into equity. As of February, it had nearly $1.7 billion in debt.
In the early 2000s, sales were booming at the company and it was considered to be one of America's most popular chains.
More recently, it has struggled and faced an identity crisis after being criticized for being unaffordable and impractical.
Here's the story of the rise and fall of the company.
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J.Crew has become the first major US retailer to file for bankruptcy during the coronavirus pandemic, which is forcing it to keep its stores closed, therefore, taking a big hit on sales.

But while the coronavirus pandemic might have been the nail in its coffin, its troubles predated this tricky period. For the past few years, it has been trying to execute a turnaround under new management after several years of sliding sales.

In its heyday, in the mid-2000s, it garnered a reputation for being one of America's most iconic preppy chains. Find out more about the rise and subsequent fall of the company below:

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On May 4, the company announced that it had filed for Chapter 11 bankruptcy protection, making it the first major retailer to fail during the pandemic.

AP Photo/Gene J. Puskar

In March, J.Crew was forced to close its stores as the coronavirus pandemic swept across the globe.

Getty/Bill Tompkins

Singer has had her work cut out for her, as of February, the company was saddled with nearly $1.7 billion in debt.

AP Photo/Gene J. Puskar

It wasn't until early 2020 that the brand got a new CEO – Jan Singer, the former Victoria's Secret's CEO.

AP Images/ Evan Agostini

The company kicked off 2019 with store closings and shortly after Drexler announced he was stepping down as chairman and leaving the company completely after more than 15 years there.

Michael Cohen/Getty Images for The New York Times

The company kicked off 2019 with store closings and shortly after Drexler announced he was stepping down as chairman and leaving the company completely after more than 15 years there.

Many of the changes that Brett put into action — including launching new label Nevereven and growing J.Crew's low-cost apparel collection — were quickly overturned.

J.Crew shut down its new brand Nevereven just two weeks after it launched. J.Crew

Many of the changes that Brett put into action — including launching new label Nevereven and growing J.Crew's low-cost apparel collection — were quickly overturned.

Sources familiar with the matter told The Journal that Drexler had taken issue with Brett's decision to start selling clothing on Amazon, as well as his plans to grow the company's budget line, J.Crew Mercantile.

A listing on Amazon's site. Amazon

Sources familiar with the matter told The Journal that Drexler had taken issue with Brett's decision to start selling clothing on Amazon, as well as his plans to grow the company's budget line, J.Crew Mercantile.

It seemed to pay off. J.Crew's same-store sales numbers turned a corner in August 2018 after dropping for the previous four years.

Getty/Spencer Platt

In June, Drexler stepped down from his role as CEO but stayed on as chairman of the company. Jim Brett took over as CEO.

AP Images

In the interview, Drexler promised to lower prices and "adopt a more accessible image," The Journal wrote.

Moses Robinson/Getty Images for J.Crew

In early 2017, Lyons left the brand, Drexler cut jobs and addressed the company's woes in an interview with The Wall Street Journal.

Jenna Lyons, J. Crew President and Creative Director. Getty Images / Dimitrios Kambouris

Same-store sales continued to drop throughout 2015, 2016, and 2017 as competition from cheaper rivals such as Zara and H&M intensified.

A Zara store in Spain. Business Insider/Mary Hanbury

Customers also complained about the fit and quality of its clothing.

Business Insider/Mary Hanbury

It was criticized for becoming unaffordable and impractical.

Fernanda Calfat/Getty Images for Mercedes-Benz Fashion Week

But by the end of 2013, as the brand had gradually become more expensive and more exclusive, it suffered an identity crisis. Profits declined 42% that year, and the company suffered a net loss of $657.8 million in 2014.

AP Photo/Vincent Yu

But by the end of 2013, as the brand had gradually become more expensive and more exclusive, it suffered an identity crisis. Profits declined 42% that year, and the company suffered a net loss of $657.8 million in 2014.

"In the mid-aughts, J.Crew cracked the code of all-day dressing for the 'creative class' by combining the formal with the informal: it sold tuxedo jackets you could wear to the office and sequined blouses that could work under military jackets," Joshua Rothman wrote for The New Yorker in May 2017.

Models sneak a conversation during the presentation of the Fall 2012 collection of J. Crew on Tuesday, Feb. 14, 2012 in New York. AP Photo/Bebeto Matthews

"In the mid-aughts, J.Crew cracked the code of all-day dressing for the 'creative class' by combining the formal with the informal: it sold tuxedo jackets you could wear to the office and sequined blouses that could work under military jackets," Joshua Rothman wrote for The New Yorker in May 2017.

The brand started to take off with celebrities; Michelle Obama was among its loyal high-profile fans.

Malia and Sasha Obama are seen wearing coats from Crewcuts by J.Crew in 2009. AP Photo/Chuck Kennedy

Under Drexler and Lyons' leadership, sales growth peaked between 2004 and 2013.

Drexler and Lyons are photographed with Diane von Furstenberg in 2015. Rob Kim/Getty Images

The J.Crew brand became known for its classic androgynous and geek-chic look, channeled by longtime creative director, Jenna Lyons, who was crowned as "the woman who dresses America" by The New York Times.

Mike Coppola/Getty Images

The J.Crew brand became known for its classic androgynous and geek-chic look, channeled by longtime creative director, Jenna Lyons, who was crowned as "the woman who dresses America" by The New York Times.

It wasn't until Mickey Drexler became CEO in 2003 that the company turned itself around and enjoyed years of sales growth, however.

Mickey Drexler is the chairman and CEO of J.Crew and former CEO of the Gap. AP/Seth Wenig

J.Crew first launched as a catalog in 1983 and was originally targeted toward price-conscious customers.

Facebook/J.Crew

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J.Crew has filed for bankruptcy: The rise and fall of America's iconic preppy clothing brand

On May 4, the company announced that it had filed for Chapter 11 bankruptcy protection, making it the first major retailer to fail during the pandemic.

In March, J.Crew was forced to close its stores as the coronavirus pandemic swept across the globe.

Singer has had her work cut out for her, as of February, the company was saddled with nearly $1.7 billion in debt.

It wasn't until early 2020 that the brand got a new CEO – Jan Singer, the former Victoria's Secret's CEO.

The company kicked off 2019 with store closings and shortly after Drexler announced he was stepping down as chairman and leaving the company completely after more than 15 years there.

Many of the changes that Brett put into action — including launching new label Nevereven and growing J.Crew's low-cost apparel collection — were quickly overturned.

Sources familiar with the matter told The Journal that Drexler had taken issue with Brett's decision to start selling clothing on Amazon, as well as his plans to grow the company's budget line, J.Crew Mercantile.

It seemed to pay off. J.Crew's same-store sales numbers turned a corner in August 2018 after dropping for the previous four years.

In June, Drexler stepped down from his role as CEO but stayed on as chairman of the company. Jim Brett took over as CEO.

In the interview, Drexler promised to lower prices and "adopt a more accessible image," The Journal wrote.

In early 2017, Lyons left the brand, Drexler cut jobs and addressed the company's woes in an interview with The Wall Street Journal.

Same-store sales continued to drop throughout 2015, 2016, and 2017 as competition from cheaper rivals such as Zara and H&M intensified.

Customers also complained about the fit and quality of its clothing.

It was criticized for becoming unaffordable and impractical.

But by the end of 2013, as the brand had gradually become more expensive and more exclusive, it suffered an identity crisis. Profits declined 42% that year, and the company suffered a net loss of $657.8 million in 2014.

"In the mid-aughts, J.Crew cracked the code of all-day dressing for the 'creative class' by combining the formal with the informal: it sold tuxedo jackets you could wear to the office and sequined blouses that could work under military jackets," Joshua Rothman wrote for The New Yorker in May 2017.

The brand started to take off with celebrities; Michelle Obama was among its loyal high-profile fans.

Under Drexler and Lyons' leadership, sales growth peaked between 2004 and 2013.

The J.Crew brand became known for its classic androgynous and geek-chic look, channeled by longtime creative director, Jenna Lyons, who was crowned as "the woman who dresses America" by The New York Times.

It wasn't until Mickey Drexler became CEO in 2003 that the company turned itself around and enjoyed years of sales growth, however.

J.Crew first launched as a catalog in 1983 and was originally targeted toward price-conscious customers.