Having a strong multichannel distribution network that includes malls, outlets, catalogs, and a web site, JCG strategy of having multiple distribution channels allows it weather poor retail conditions better than its competitors. This strategy also protects the company from changing trends in consumption and shopping as JCG already has a distribution network in place to prepare for these changes.
Although 2009 is going to be a tough year for all retailers, J. Crew's product offering-stylish without being too trendy-will serve as an asset for consumers who are more careful with their purchases and thus more likely to purchase goods that will last them a long time. In addition, the company is on track to reduce inventory per square foot by 15% and has cut back new store openings to 24 in 2009. These cost-cutting measures, buoyed by the increase in sales brought about by Michelle Obama's endorsement, serve as good indicators that JCG will perform well in 2009.
J. Crew's strong catalog operation provides the firm with myriad demographic information about customers. This provides J. Crew useful market data in determining how to manage and target its expansion.
J. Crew is a young and growing company with a very strong niche in its market. Its strong customer loyalty allows J. Crew to maintain high operating margins. With only 250 outlets, J. Crew has a great deal of room to grow. Also, J. Crew has yet to undergo significant international expansion.
J. Crew has stong leadership in Millard Drexler (ex-Gap chief), now Chairman and CEO of J.Crew. Drexler built Gap into a retail heavyweight over the 90s and has already turned around J.Crew by cutting costs and launching a successful IPO.
