Women's Wear Daily

J. Crew Group Turnaround Makes Progress

J. Crew Group Inc., showing progress in its turnaround effort, narrowed its second-quarter loss to $6.1 million compared with $18.5 million in the second quarter last year. Operating income was $33.3 million compared to $4.8 million in the second quarter last year. The company said its second quarter this year reflects the impact of the benefit related to a lease termination payment related to relocating the corporate office from Greenwich Village to lower Manhattan, and transformation costs. Total revenues increased 3 percent to $587.6 million. Comparable sales increased 5 percent. J. Crew sales decreased 5 percent to $428.9 million, but rose 1 percent on a comparable basis. As expected, the Madewell division did much better, with sales up 29 percent to $121.7 million and comparable sales increasing 28 percent. Gross margin increased to 38.5 percent from 38.2 percent in the second quarter last year. Turnaround efforts include expense-cutting, increased digital penetration, sourcing changes involving cost negotiations and introducing subbrands such as Playa for swimwear, all of which officials say offer a younger appeal and more accessible prices and fits. J. Crew is also putting greater emphasis on its Heritage Collection of its most iconic products such as rugby shirts and roll-neck sweaters, plus-sizes and more fit options.

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