J.Crew Lays Off 100 Workers After Disappointing Year

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J.Crew Group, New York, has dismissed 100 workers, or 10 percent of its salaried employees, following a year in which the company's overall sales remained flat and flagship J.Crew catalog sales were particularly disappointing.


The company is expected to report overall sales of more than $830 million for the 1997 fiscal year ending Jan. 30, which, compared with last year's figures estimated by a spokeswoman at $810 million, represents an increase of 2.5 percent.


While the company's Popular Club Plan is expected to post a 100 percent increase in operating profit and a 5 percent increase in sales, and its Clifford and Wills business also is expected to post an increase in profit performance, a dark spot surfaced the company's original J.Crew operations.


In an internal memo, company chairwoman and CEO Emily Woods noted that J.Crew's performance "was very disappointing, especially in mail order," but added that the problem was mostly from "inefficiencies in the way the business is structured and run, rather than fundamental problems with the brand."


The job cuts were part of a reorganization process that will include restructuring the company's business units. Under the new structure, business heads will be given more autonomy, business units will have their own budgets and compensation will be tied directly to results.


In addition, the company's plans for this year include segmenting the J.Crew catalog in new ways by distributing six college books, eight women's books and the company's first swim book, Woods wrote in the memo. The company also will create a new prospecting catalog for the brand in an effort to grow the house file faster.


To leverage the brand, the company will introduce its new golf line, JCG, in February and debut a new winter sports line, J.Crew MultiGlisse, in October.


Separately, the company's online catalog, which was launched in June, built steadily throughout the year, reaching 6.8 percent of mail-order sales on its peak day. The company's international agreement with Itochu to bring the J.Crew brand to Japan was renewed.


In October, Texas Pacific Group acquired a majority interest in J.Crew Group, however, a spokesman for TPG noted that the investment firm does not take part in the day-to-day operations of the companies it owns.
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