Is J.Crew Rolling Out Its Own Version Of Old Navy?

Photo: Courtesy of J.Crew.
Is J.Crew Mercantile the new Old Navy? J.Crew announced on Friday that it was debuting a new, lower-priced retail offshoot, to be called J.Crew Mercantile. The new stores will stock the same products as J.Crew Factory (Factory stock is already roughly 50% cheaper than its mainline offerings), as J.Crew spokeswoman Margot Fooshee told Bloomberg Businessweek, though a source informs Refinery29 that there may be exclusive Mercantile designs down the line.

J.Crew's chairman and CEO, Mickey Drexler, is quite acquainted with successfully launching gently priced offshoot brands. During his 19-year run at Gap Inc., Drexler was instrumental in the creation of Old Navy, which opened in 1994. During his time at J.Crew, Drexler was also highly involved in opening Madewell in 2005. The move drew lots of Gap/Old Navy comparisons. If J.Crew Mercantile does indeed produce unique pieces down the line, it could perhaps be Drexler's next value-retail success. J.Crew has taken some major cost-cutting measures recently, firing its head women's designer as well as 175 staffers on June 10, following another quarter of lackluster sales numbers. Meanwhile, Madewell has been raking it in, with sales jumping 35 percent, and 20 stores opening in 2014.

The first J.Crew Mercantile store location will be in Dallas’ The Shops at Park Lane mall later this month. Other J.Crew Mercantile outposts are expected to appear in strip malls and traditional malls. This will allow J.Crew to have a retail presence in "value"-skewed shopping environments beyond your standard-issue outlet mall setup, where you might not otherwise encounter the brand.

"J.Crew’s move to ignite renewed interest in the core brand by launching the Mercantile offshoot follows other brand announcements, like H&M and Macy’s, with similar initiatives to reach a more value-conscious shopper," says Diana Smith, senior retail and apparel analyst at Mintel, a retail market-research firm. "It certainly reflects the truth that despite a rebounding economy, consumers are still only cautiously beginning to spend more on a discretionary basis, they are savvier than ever at finding the lowest prices due to technology and tools that enable that, and they are unwilling to pay full price for apparel." A Mintel study from May revealed that 41% of women think most clothing is overpriced — and that they never pay full price for their threads. "Price is always a leading factor when it comes to where consumers shop, but there has to be a notable difference in merchandise to warrant different pricing, or it can cause consumer confusion," Smith says.

J.Crew Factory’s site now reads, ‘The online home Of J.Crew Mercantile" instead of "It’s your stylish little secret" under the store’s name. Although the actual look and feel of Mercantile still seems like it's J.Crew's "little secret," here's hoping that it'll provide a boost for the brand, which has been experiencing a streak of bad luck.
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