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J.Crew Is Developing Its Own Budget Label, J.Crew Mercantile

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J.Crew has been quietly running a budget-friendly line, J.Crew Mercantile, out of its J.Crew Factory stores. It was positioned as apparel made specifically for Factory shoppers, but now Bloomberg reports that J.Crew has decided to start opening J.Crew Mercantile stores specifically to house that cheaper line.

According to a J.Crew spokesperson, the new stores will include the same Mercantile product that shoppers have been finding exclusively in the Factory stores. The merchandise will probably look similar to what's stocked on J.Crew Factory's website right now, which is billed as the online home of J.Crew Mercantile. The first store is slated to open later this month in The Shops at Park Line, a shopping center in Dallas. The spokesperson confirmed to Bloomberg that there will be more shops coming in strip centers and malls, although it's unclear how many J.Crew Mercantile stores the company plans on opening overall.

J.Crew's CEO Mickey Drexler made a similar move while he was leading Gap in the '90s, and launched Old Navy as a cheaper counterpart to Gap and Banana Republic. Now, that budget chain Old Navy is the one bright spot in Gap's struggling brand portfolio. Drexler is probably banking on J.Crew Mercantile working the same magic for J.Crew, since the company is in need of some new direction. It just laid off 175 people (including its head designer) after reporting month after month of bad sales.