J.Crew Group Lays Off 95 Positions In Work Force

Posted by Siv on February 27th, 2009

11 comments

Yesterday, I read a tweet where someone wrote about J.Crew cutting jobs. I wasn’t sure if it was at the corporate or store level. The news has been confirmed as J.Crew just sent out a press release today.

In the press release, J.Crew is making many changes to cut corners and costs. The changes are expected to generate the company $40 million dollars in pre-tax savings. Looks like J.Crew is not faring too well in this economy.

So what is the company doing to ride out 2009? J.Crew will be:

Reducing workforce by approximately 95 positions (including positions that are currently unfilled) primarily in the New York offices and support functions in the field and distribution centers. This represented an approximate 10% reduction in staffing for the departments included. The affected associates have been offered severance and related transition assistance.

Suspending the 401(k) Plan Company matching contributions through the balance of 2009.

Eliminating 2009 merit based wage increases for the entire workforce.

Initiating other company-wide cost reduction programs to produce efficiencies in areas such as supply chain, store operations, real estate, catalog circulation, and other general savings in the New York offices.

And what did CEO, Mickey Drexler have to say about this?

“As we are all aware, we are operating in a very tough economic environment. This has required us to make some difficult decisions, which we do not take lightly, but feel are necessary to ensure we remain competitively positioned over the long term. However, we believe our financial flexibility, our team, and our focus on quality products and the customer will enable us to navigate these turbulent times.”

Posted in Behind the Scenes, In the News, Mickey Drexler

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456111 Responses2009-02-27+17%3A40%3A41Siv to “J.Crew Group Lays Off 95 Positions In Work Force”

Kristi says:

February 27, 2009 at 12:44 pm

And I thought they were doing so well after all the attention they’ve gotten from the Obama kids, etc.

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Leigh says:

February 27, 2009 at 1:42 pm

I thought they were doing so well, too. But I guess shoppers are being really careful with their purchases now.

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Maggie May says:

February 27, 2009 at 2:00 pm

They are not laying off 10% of their work force as their work force obviously consists of more than 950 people. The release says that the layoffs represent 10% “of the departments” involved which are named in the release.
Things are bad but not so bad that they are laying off 10% of their entire work force!

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- Leigh says:
  
  February 27, 2009 at 2:03 pm
  
  Thanks for that correction!
  
  Reply
J. Crew cuts 95 positions - Kristi Gustafson - Style Fashion Dating Blog - On the Edge - timesunion.com says:

February 27, 2009 at 2:17 pm

[...] are laying off. This isn’t news. I was surprised, though, to hear J. Crew was cutting nearly 95 positions. I thought they’d gotten a good “boost” after the Obama girls wore J. Crew coats [...]

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Puglady says:

February 27, 2009 at 2:22 pm

Sad to say but maybe if their prices were more reasonable, their sales might not be in the crapper. I’m brand-loyal and if it came down to eating buttered bread for a week and having a fabulous new shirt or shoes, then buttered bread it is … but not a $100 shirt or $200 shoes, from a mall chain store. I love you Crew, and your sale prices and recent promotions have brought prices down to a much more digestible level. But at the end of the day, overall you’re a mall chain store, and I think it’s time Ol’ Mick brought things back down to earth. Away with swimsuit separates that cost $38 or $48 for one piece. Away with $50 t-shirts. Right now every retailer out there should be able to neogitiate better deals with their suppliers because demand has slowed everywhere. Howzabout they try that and then pass the savings on to us consumers?

Now if that were happening, maybe sales might go up. Every single person I know who asks me where I got my shirt or whatever says ‘oooh, i like their stuff but it’s just so expensive.’ That perception needs to be changed and a good start would be lower, more reasonable based prices instead of rounds and rounds of markdowns and promotions.

/rant

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crystal says:

February 27, 2009 at 4:02 pm

They have laid off approximately 200 people that work in the warehouse as well

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Diana says:

February 27, 2009 at 8:04 pm

Removing merit based wage increases for 2009? I hope their employees don’t start to jump ship and that the quality won’t get worse. Why would QA do a good job if they’re not going to get paid any more for doing it?

I agree w/Puglady – there are few JCrew fans I know of who buy full price. They wait for sales, b/c the items are overpriced. They need to go a little lower, so their things are affordable. Also, the FS isn’t doing them any favors. A lot of us don’t want to gamble on something since if it doesn’t fit, that’s $80-$100 down the hole for one item. So, people don’t buy b/c of FS. Sales would prob. increase if they just got rid of it. I think of JC on par with stores like Banana and Ann Taylor; they need to be competitive.

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allforjcrew says:

February 27, 2009 at 10:01 pm

Alright, I wanted to settle a few things.

I work for the company and must say, I love it! Nothing could keep me from my job. Raise or no raise, I am committed to the great company I’ve worked for over two and a half years. The quality is phenominal, the novelty is extraordinary, and you won’t find anything like it at any other retailer. Fight me if you will, but it’s true

No one at the warehouse in addition to the 95 persons has been laid off. There were 95 positions in total, unfilled and current positions.

The sales for the company in the fiscal year of 2008 were among the best in retailers in similar volumes. So for someone to say our financials our down a significant amount is purely speculation. JCrew is taking the necessary precautions to have a strong fiscal 2009 now, so that more positions and more revenue are not taken to further consideration. I can confidently speculate that JCrew will rise to the top in 2009 with amazing numbers, while not compromising the quality and amazing customer service we’re known for. If you don’t agree, or beg to differ, go ahead…shop the Gap and Banana Republic and Anthropologie. Knock yourself out, but you’ll be spending more time running back and forth to the mall for returns than you’ll even get to spend flaunting your new purchases! Just some food for thought

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financials says:

March 1, 2009 at 8:41 am

It would be foolish for anyone to jump ship in this economy because they didn’t get a merit increase. To willingly join the millions upon millions of qualified workers looking for a job – doubt it. If you look left and right you’ll see many companies cutting costs, it’s not reflective of the product they are selling but a product of the economy in the crapper.

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Jong says:

March 4, 2009 at 8:11 pm

Jcrew is not really a struglling company. This just anticipation, I have a friend who work in NY office, and the people they let go are redundant positions.

Plus, J.Crew still opening stores, they haven’t close any like the others, didn’t they just opened a few tihs month?

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