J.Crew to Cut 250 Jobs as Part of Reorganization
J.Crew is cutting 250 jobs, it announced on Tuesday. The move comes as the specialty apparel retailer embarks on several strategic changes. As part of a reorganization, J.Crew will reduce headcount by approximately 150 full-time and 100 open positions, mostly from its corporate headquarters. J.Crew expects to realize about $30 million of annualized pre-tax savings by downsizing its staff and will record a charge of approximately $10 million in the first quarter for severance payments and other termination costs. As part of the reorganization, J.Crew COO and CFO Michael Nicholson will take on additional responsibility in planning and allocation, merchandising, marketing, and design functions. Meanwhile, J.Crew named Lisa Greenwald its chief merchandising officer.
Total Retail's Take: J.Crew, burdened by declining sales and mounting debt, is shaking up its organization in the hopes of creating cost savings and maximizing organizational efficiency. Like many other mall-based retailers, particularly apparel brands and department stores, J.Crew has had a difficult time adjusting its business to account for decreased foot traffic — and transactions — in its brick-and-mortar stores. J.Crew is taking steps to survive in this challenging environment, including reducing costs (i.e., staff layoffs), expanding its discount business, and investing in its Madewell brand geared toward millennials. The question, however, is it too little too late.