J.Crew Is Launching A Lower-Priced Line — Commence Freak-Outs

embedPhoto: Courtesy of J.Crew.
Good news for shoppers who have felt left behind by the upscaling of J.Crew in recent years: The retailer is preparing to introduce a lower-priced line. The new chain will be called J.Crew Mercantile, a name the brand trademarked back in November. The Wall Street Journal reports that J.Crew has signed "a few" leases and is currently scouting additional retail locations — so, in other words, this is actually happening.
WSJ reports that Mercantile will feature "merchandise and prices closer to what shoppers would find at J.Crew Factory, than what is available in its full-line stores." But, unlike J.Crew Factory stores, which are typically located an hour or more from urban centers, Mercantile stores will be located in regional malls closer to city centers. Interestingly, J.Crew's CEO Mickey Drexler introduced a similar strategy when he was at Gap and introduced Old Navy. The line's stores often opened in the same malls as Gap and eventually surpassed Gap in terms of revenue.
Retailers traditionally locate their outlet stores further away to avoid cannibalizing their main line's sales. But, with retail sales for many brands remaining sluggish after a lackluster holiday season, "retailers would rather cannibalize themselves than have someone else do it," as an analyst with Macquarie Securities put it. We can live with a little retail cannibalization if it means we all get to feast on lower-priced cashmere and perfect chambray shirts. (The Wall Street Journal)

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