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J.Crew Just Laid Off 250 People

The preppy brand is trying to alleviate its financial struggles.

Models stand on a platform wearing J.Crew clothing.
Models at a recent J.Crew presentation.
Photo: Brian Ach

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In the not-so-distant past, it was a retail darling. But after consecutive years of slumping sales, today’s J.Crew is struggling to keep shoppers interested. On Tuesday, it announced a significant casualty of its ongoing financial challenges: the elimination of 250 full- and part-time jobs, mostly in its corporate headquarters.

The layoffs should save J.Crew $30 million, counterbalancing the $10 million it expects to pay in severance and other termination costs.

These job cuts, indicative of the overall dismal state of brick-and-mortar retail, come with a number of executive changes within J.Crew, which also owns Madewell. The chief operating and financial officer of J.Crew Group, Michael Nicholson, is now taking the lead on the J.Crew brand, giving him oversight on design, merchandising, and marketing. Madewell’s senior vice president of merchandising is getting bumped up to run merchandising for J.Crew, and J.Crew’s president will become president of Madewell.

While Madewell’s sales rose 14 percent to $341.6 million during fiscal 2016, J.Crew’s sales dropped 6 percent to a little over $2 billion. J.Crew’s comparable sales — a metric that only looks at stores that have been open for a full year, excluding the buoying effect of sales from newly opened locations — were down a steeper 8 percent.

Early this month, Jenna Lyons, J.Crew’s most famous employee and its longtime creative director/president, left the company. While shoppers met the news with mourning and solemn shrugs of acceptance, headlines across the internet declared it “the end of an era.” It really was: Lyons championed the inventive layering and casual use of sequins that put J.Crew on the fashion map in the ’00s. As sales started dropping, however, the brand decided that it needed to get back to the classics that made its name in the first place.

But Lyons was one person, and her departure — while aesthetically significant — is a less tangible indicator of J.Crew’s health than today’s decision to dismiss 250 people.