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J. Crew hopes updated classics fill a niche in Canadian market
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Toronto Star- American clothing retailer J. Crew Group, Inc. says it’s banking on its unique assortment of updated classics to overcome the current economic turmoil as it opens its first Canadian store in Toronto’s Yorkdale shopping mall.
“We’re obviously nervous like everyone should be today. So we’re being conservative,” Mickey Drexler, chairman and chief executive officer of the New York-based retailer, said Thursday.
The 5,000 square foot store, which will carry only women’s clothing and accessories, is slated to Aug. 18, the first of as many as 20 Canadian stores, including another five “in the next few years,” he said.
‘We know it’s going to be a reasonably promotional back to school period and holiday season. As always our mission is to offer unique products at fair value,” Drexler said in a telephone interview with the Toronto Star.
“We can’t control the macro-environment,” Drexler added, referring to a week that saw stock markets roil amid concerns high U.S. and European government debt loads could trigger another recession.
“We just have to play it best,” Drexler said, noting J. Crew’s fall lineup will play to its strengths, including bold colours, quirky mixes and matches, woven shirts, perfect and vintage tees, and expanded line of handbags and shoes.
Whether it’s the popular café Capri cropped pant, in wool for fall, for $118, or the classic Italian leather Mona pump, for $198, or the fully lined wool Schoolboy blazer (for women), at $188, Drexler describes J. Crew as catering to customers who want designer quality at less than designer prices. (All figures are in U.S. dollars. Canadian pricing has not been disclosed.)
The Yorkdale store is expected to do well, retail industry experts said. The iconic label, a favourite of U.S. First Lady Michelle Obama, is already well known to Canadians who shop its catalogue, website and U.S. border stores.
‘They should do well at least initially, as the women’s wear market welcomes new stores with open arms if that new retailer comes with a reputation: Michelle Obama – need I say more?” said Ed Strapagiel, executive vice-president at market research firm KubasPrimedia in Toronto.
“Yorkdale mall, however, might present some challenges once they complete their expansion next year. We just don’t know what retailers are going in there,” Strapagiel cautioned.
Indeed, J. Crew is just one of a slew of American and European retailers set to converge on the Canadian market, making it their first stop on the road to international expansion as growth slows at home.
Drexler acknowledged that in the current climate the game will be about winning market share from competitors.
“Whatever we do we take away from someone else. There’s isn’t a lot of growth yet,” he said, noting that’s how Apple Inc. has flourished. The 66-year-old seasoned retailer sits on Apple’s board.
In Canada, J. Crew’s are expected to take a bite out of broad range of competitors, from the Bay to Banana Republic, said Maureen Atkinson, a principal in the retail consulting firm J. C. William Group Inc., of Toronto.
“They’re a bit like Ralph Lauren in that updated classics are really the style. Price point-wise they’d compete with Banana Republic but Banana Republic is a little more trendy in style,” Atkinson said.
A huge J. Crew fan herself, Atkinson said the retailer is almost in a category of its own, particularly in the Canadian market, where most clothing is either so trendy it goes out of style fast or is well made but “dowdy.”
Drexler, who joined J. Crew in 2003 after 18 years with the Gap, where he grew the business from $400 million to $14 billion U.S. a year, has brought some much needed flair to the brand, Atkinson said.
J. Crew plans to open as many as 20 stores across Canada, including five in the next few years, Drexler said. Future locations could include Toronto’s Eaton Centre and Vancouver’s Robson St., he said, though no leases have been signed.
The prices in its Canadian stores may differ from its U.S. prices, the retailer said. “Price increase account for foreign exchange rates and other costs of doing business internationally,” the company said in a statement.
The opening of the Yorkdale store will coincide with the launch of a Canadian website where prices will be quoted in Canadian dollars, the retailer said.
Drexler said he expects the store and its online business will complement each other as they have in the U.S. “Online sales bring more awareness to our stores and stores bring more awareness to online,” he said.
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