J. Crew had a disappointing couple of months. Their sales fell 5 percent compared with the same period in 2014, their same-store sales are down 10 percent, and CEO Mickey Drexler and the retail press have blamed the brand’s recent woes on some ugly sweaters, in particular a cropped one called “The Tilly.” (“We like to think of her as the slightly shrunken cousin of our beloved Tippi sweater,” J.Crew says on its site.) The New York Times quotes a J. Crew obsessive who says, “The Tilly was a disaster. An absolute disaster. They should not have gone that way.” The company has laid off 175 people and fired their head of women’s design in the aftermath.
But…it’s just one sweater. (Which, full disclosure, I tried on once, and didn’t hate. But I have a comparatively short torso, so cropped styles flatter me.) How could one miss seemingly alter the big picture?
It has a lot to do with the loss of related purchases, says Dale Achabal, the executive director of the Retail Management Institute at Santa Clara University. When a company screws up one of its key pieces—and J. Crew’s lightweight sweaters seem to be a key piece for them—a consumer is not only not buying the sweater; she’s not buying the pants that go with the sweater, or the statement necklace that really ties the whole outfit together. The Tilly sweater, which no one bought, is now on sale for $45.99, down from $86, so J. Crew isn’t just losing the money from marking down that sweater—they’re losing the money you didn’t use to buy J. Crew’s “favorite pair of high-rise jeans” that they recommend pairing with the Tilly.
If this was J. Crew’s first miss, they could come back from it fairly easily, Achabal says. “Let’s say they’re doing some e-marketing, and on Facebook. They now put another key item up, and the good news is if that key item resonates, they can recover.”
But if there are a few misses in a row, that can hurt customer confidence in the brand. “There’s going to be some number of customers who delete the emails without opening. Then the loyalty goes,” Achabal says. It sounds like J. Crew is in the middle of this moment right now, as customers are complaining, not just about Tilly’s unfortunate appearance, but about the boxy fit and weird sizing of other items. Still, the brand has turned itself around before—thanks in no small part to CEO Drexler. With a shakeup at the company, they may be able to do it again.