J.Crew Presentation

J.Crew CompanyRyan LagasseCorporate Communications

U.S. Apparel Industry History

Began with menswear in 1800’s

19th century Gold Rush Levi Strauss Jeans “easily transformed into utilitarian work

trousers”

Womenswear picked up in 1900’s First influenced by Parisian fashion Isolation of WW1&2 created confidence in

“correctness” of American lifestyle

Today U.S. retail industry has revenue of $150 billion

J.Crew Company History

Started as mail order catalogue in 1983 Popular Merchandise, Inc.

End of 80’s showed decline in mail order catalogues

South Street Seaport Flagship Store opened 1989 Success was great 3 more stores opened nationwide End of year revenue $320 million

327 J.Crew stores in U.S. to date

Brick & Mortar vs. Direct

CEO: Mickey Drexler

Brought on in 2003

Previous CEO of The Gap Credited with 1990’s revival Coined the “retail therapist”

Extremely involved in all aspects of company

Created an environment of “perceived exclusivity” Maintaining quality Less-than-designer price point Offering timeless classics with a twist

CEO: Mickey Drexler

In 2005, the company turned its first profit in five years, and between 2003 and 2008 revenues rose 107 percent. In 2006, Drexler presided over a very successful IPO. In 2009, revenues ($1.57 billion) exceeded pre-recession levels and same-store sales climbed 11 percent. Profits jumped 40 percent. When Drexler took up the reins in 2003, J. Crew had $609 million in debt and 196 stores. Today, it

has 321 stores, less than $50 million in debt and $298 million cash on hand.

-Wall Street Journal

Key Competitors

2010 Annual Sales 2010 Net Profit Margin

Lands’ End The GapL.L. Bean

Current Company StatusPrivately held as of March 1

$3 billion buyout Stockholders received $43/share

“It would provide greater flexibility and allow for planning unburdened by the demands of a public company's quarterly earnings schedule”

TPG Capitol: 71% Leonard Green & Partners: 19% Internal: 10%

71%

19%

10%

Americana Trend

What is it?

Americana TrendHow did it happen?

The recession prompted trendsetters to back away from avant-garde and revisit classic, durable goods made in America. Suddenly, fishermen and oil riggers are walking in the same boots as fashion-conscious advertising executives.

-KSTP.com

Industry Recession Strategies

Industry Impact

Standard And

Poor’s

Industry Impact

Annual Statistic

al Analysis of the U.S.

Apparel and

Footwear

Industry

Industry Impact

•U.S. production of apparel declined 41% in 2008•Clothing imports reached a record level of 97%•In the first 3 months of 2009 31,900 jobs were lost

J.Crew Recession Strategy

J.Crew Impact

•Total Revenues increased• Gross profit increased

Net Income increased

J.Crew Impact

$298,107 cash

on hand

J.Crew Impact

Future Outlook for J.CrewAmericana trend made J.Crew more relevant

Increased consumer awareness Obama marketing

International expansion Going private allows for greater fluctuation in

numbers Media/shareholders can’t comment

Increased market share

Increased profit margin

Thank You