Remember when
I griped about J.Crew's sky-high prices for basics? I assumed that the price shifting would hurt their business. I was wrong.
From a WWD article by David Moin:
"J. Crew has been one of retailing's biggest success stories in recent
years with its increasing focus on "affordable luxury." The retailer
last week said that, in regard to holiday sales, its retail and factory
outlet sales rose 17.3 percent to $201.5 million during the
November-December period. Same-store sales gained 8.5 percent, which is
over a 5.4 percent gain in the prior year. " (
Link)
Oops.
In my defense, plenty of smart people (
Faking Good Breeding &
Daddy Likey, for example) thought J.Crew had gone nuts. Even informed investors were no wiser: The stock was one of the most heavily shorted issues ahead of the
holiday season, with one of every four shares traded in recent weeks in
a short-seller play.
But the strategy blew up in the past several days when J. Crew said
cash flows from the busy holiday soared to an eight-year high in
Drexler's surprise turnaround. (
link) What the hell is going on?
The upscaling of J. Crew is part of a larger retail trend toward "affordable luxury" that includes Bebe, H&M, & Coach. Bebe has
ditched their teen market for richer 25-35 year-olds (and 20-something spokesmodel Mischa Barton for Rebecca Romijn); H&M looks to capture an older audience with their
much-anticipated COS line; and Coach has introduced a luxury offshoot called
Coach Legacy, with prices ranging from $495 to $10,000.
The question is, of course, can a lower-tier line go luxe? Designer collaborations with fast fashion stores have been extremely successful, but once a brand has settled into a lower price range, can it go higher? The Bag Snob, discussing the new Coach line, says no:My opinion is that you can not go high once you've established yourself
as the bargain brand because there is no perceived value attached to
the brand. Existing luxury brands, however, do well expanding into
lower end lines. (
link)
Proenza Schouler's Lazaro Hernandez echoed those sentiments at a press conference three weeks before Proenza Schouler's Go International collection was announced: a long-term association like the one between
Isaac Mizrahi and Target "ruins a designer's name ... forever." (
link)
In the past, I'd would have agreed (at least with the Bag Snob--I love Mizrahi!). Now, however, looking at J.Crew's surprising success, I'm forced to say it
is possible for brands to go up the price ladder. The "how?" & "how far?" of that is still a mystery.
One thing I have noticed, though: J.Crew has elevated their design. It took some time, and there are still too many over-priced basics, but J.Crew is now designing clothes that justify a higher price tag. What's more, they're selling these clothes for equivalent or lower prices than their competition.
For example, above are two dresses from
J.Crew's spring look book. The first appeared in March's Lucky Magazine (generating editorial interest is key to raising a brand's profile), while the other is pure Anthropologie (except, at $265.00, the Versailles Dress is quite "affordable" by Anthropologie's standards). If J.Crew continues offering these kind of deals to affluent buyers, then their continued success will no longer surprise anyone.
Buying info: The dress on the left appears to be sold
out--I went to look for it again, and it's gone, even though it was scheduled for April release. The Versailles Dress is still available, & comes out in April, or call 866-739-5944 to reserve.
