Most readers have seen this email alert from J. Crew. As many are no doubt aware, it is just one of many promotional efforts from the retailer that have hit our electronic in-bins recently. And the company is not alone in its aggressive promotional moves; we are hard-pressed to come up with any retailers not currently promoting some sort of discount or sale to customers. (If anyone is not aware of the discount shown in the photo above, it offers 20% off full-price sweaters and ends Thursday night at midnight; the promo code needed at checkout is SWEATERS.)
However, elsewhere on the J. Crew site one finds this:
… and this sale is not a discount or promotional price that ends tomorrow at midnight, as with the sweaters. This is an ongoing sale offering very deep discounts, especially for a retailer of Crew’s caliber, with items like the Men’s Patchwork tartan vest that originally sold at $228 now offered at $59.99. The Princess is no mathologist, but it seems to us that is almost 75% off the original price.
And the site is full of merchandise on Sale, not all at this level of markdown, but a hefty amount nonetheless. Why are deep discounts, other than the obvious appeal they hold for most of us, an issue? Because they make investors in the company’s stock nervous. From Thomson Financial News:
“Shares of the preppy clothing company run by Wall Street darling and former Gap Inc CEO Mickey Drexler fell 14 percent to their life-time low of $11.90 in morning trade.”
The article cites a memo written by a stock analyst:
“…’The worst is yet to come for J. Crew, which has continued to reel under a weak economy’ …analyst Eric Beder wrote in a note to clients…”
“…surveys and store tours have shown J. Crew is becoming “more and more aggressive,” to clear out inventory….
While TP is always excited to see merchandise offered at more fiscally friendly price points, Crew cannot be making much profit on this Cashmere Sequin Shell being sold for $49.99, roughly 70% less than its original price of $158.
The story also quotes the analyst:
“We do not believe the J. Crew business model works at the current levels and depth of price cuts,” he wrote.”
J. Crew Group’s stock closed at a new all-time low this afternoon, $11.64 per share. Ouch. We wish we were a bigger and better person Ladies, but let’s face it: their pain is your gain.
…just anything at all about the United States that you are thankful for, and you are entered to win the tote! And if you mention the giveaway on your blog, then you will automatically be able to send the Preppy Princess Madras Photocards to anyone you choose! And we pay the shipping on everything!
Tomorrow we will reveal the lucky winner(s)! And don’t forget we’ll be starting a new Thankful Thursday Giveaway tomorrow too, so pop in and say “Hi” when you have a spare nanosecond. We’re always glad to see you!