Do you see J.Crew or Nordstrom as the bigger potential beneficiary from their merchandising partnership?
Photos: J.Crew

J.Crew to sell inside Nordstrom

J.Crew Group Inc. will sell an edited assortment of its flagship J.Crew brand at select Nordstrom full-line stores and on Nordstrom.com, beginning September 12.

Nordstrom will display an assortment of women’s apparel and accessories at 16 of its 121 full-line stores, with petites sold online only.

Madewell, J.Crew Group’s younger, hipper brand, has found success at Nordstrom since being introduced in March 2015. Madewell recently expanded to 20 more locations and is now available at 76.

The J.Crew items will include some similar to those sold at its own stores, including its women’s Regent and Rhodes blazers and Martie pants. Nordstrom will be the only store to sell J.Crew and Madewell products outside of the company’s own retail stores in the U.S. J.Crew has no plans to expand wholesale distribution.

“This was an easy decision,” said Mr. Drexler in a statement. “Nordstrom is the perfect partner because we both share the same high standards of customer service and store experience. Additionally, we are known for exceptional design, quality and style.”

The partnership seems to offer a bigger opportunity for J.Crew, which has suffered seven straight quarters of declining same-store sales. Price increases and a shift away from classic styles has alienated customers. Extensive clearance sales have consequently frustrated efforts to restore full-price selling.

Nordstrom hasn’t been immune to the department store doldrums and the move is part of efforts to highlight more exclusive offerings. In its latest quarter, “limited distribution” brands such as Beyonce’s Ivy Park activewear label, the Charlotte Tilbury beauty brand and Madewell were among its top sellers.

Pete Nordstrom, co-president of Nordstrom Inc., acknowledged to Women’s Wear Daily that J.Crew was struggling. But he added, “Our customers have an awareness and affinity for the J.Crew brand. If you were to survey our customers about what brands they like, J.Crew would be right up on top. We probably share more customers with J.Crew than any other department store.”

BrainTrust

"It does look like a great deal for J.Crew, though I would suggest they think a lot harder on a marketing strategy for their real customers. "

Lee Kent

Principal, Your Retail Authority, LLC


"With the trends moving away from classic preppy, are they both wishing instead of making a well-researched bet?"

Anne Howe

Principal, Anne Howe Associates


"J.Crew isn’t fashion-forward. It doesn’t speak to Millennials, because we never wore it."

Jasmine Glasheen

Content Marketing Manager, Surefront


Discussion Questions

Discussion questions: Do you see more pros or cons to J.Crew opening up distribution to Nordstrom? Which company will benefit most from the arrangement? Do you expect to see more such deals in the future?

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18 Comments
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Paula Rosenblum
Noble Member
7 years ago

If Nordstrom thinks J.Crew has a similar customer, I say okay. I wouldn’t think so, but I suppose it’s better than creating Nordstrom’s own private label for younger customers.

Great deal for J.Crew, though. The investment is inventory … that’s not so hard.

Dick Seesel
Trusted Member
7 years ago

For Nordstrom, this continues a trend that already includes partnerships with Madewell and Topshop. A presence inside Nordstrom has helped these two labels create brand awareness (and benefit from the halo effect) as they build out a relatively small footprint of their own stores.

The association with J.Crew is different: This brand has been in the penalty box with its loyal fans for at least a couple of years, and it’s debatable whether its merchandise content problems have been fully addressed yet. (Plus, there is no scarcity of J.Crew locations across the country.) I see more upside for J.Crew than for Nordstrom (especially if JWN has to carve out space that could be devoted to higher-performing goods), but it puts some burden on JWN to make sure that its J.Crew shops put forward the “best of the brand.”

Tom Dougherty
Tom Dougherty
Member
7 years ago

It’s a qualified assortment of pros for both brands. J.Crew needs a reload and Nordstrom is looking for more meaning. But, the new arrangement won’t save either brand. Fashion thinks that it understands branding better than any other segment. The truth is actually that they are soothsayers to trends. Is something cool because it is sold at Nordstrom? Is something desirable because it carries the J.Crew label?

When your business is trends and not brand you can expect a rough and rocky ride.

The fashion industry is much like Hollywood. You might have great distribution, writing and a top cast. You might even have a director with only hits. But even Spielberg has flops. If we were great at predicting trends we would all by billionaires.

Nordstrom holds a space in the retail pantheon but that brand equity is not nearly as defined as it once was. Time to look outside-in and recognize that you need to leave the dance with a different partner than the one that brought you. Sounds like an opportunity to me.

Zel Bianco
Zel Bianco
Active Member
7 years ago

This sounds like a good partnership for both companies but I see this as a better deal for J. Crew. Nordstrom will probably see an increase in traffic as a result of this but J. Crew will gain more retail space and they now have another opportunity to win their customers back if this is executed properly. Both companies have had sluggish returns so anything that can be done to restructure the old department store model and increase foot traffic should be considered.

Anne Howe
Anne Howe
Member
7 years ago

Interesting that Pete Nordstrom says “if you were to” and “probably” when talking about the partnership. In this era of data everywhere, I would have assumed that they did their homework and the knew for a fact that their customers would respond to J. Crew. With the trends moving away from classic preppy, are they both wishing instead of making a well-researched bet?

Jasmine Glasheen
Member
7 years ago

Unless J.Crew can profit off a ’90s revival a la Calvin Klein, Tommy Hilfiger and Adidas, I foresee Madewell carrying the brand. J.Crew isn’t fashion-forward. It doesn’t speak to Millennials, because we never wore it. It is more the brand our principal wore while giving us detention. Any brand renaissance will have to take place via Baby Boomers, and they’re not nearly as nostalgic.

So the benefit here is absolutely for J.Crew. My bet is Nordstrom agreed to this in order to close in on Madewell.

Ryan Mathews
Trusted Member
7 years ago

Depends which side of the deal you are looking at. From J.Crew’s point of view it’s an almost total win. They help bolster flagging sales, boost the credibility of the brand as a line, rather than as a retailer, get introduced to new customers and move under the shelter of Nordstrom’s service halo. From the Nordstrom point of view, it’s perhaps a tad dicier. Their bet is that they will attract a fair number of J.Crew shoppers and increase their own sales by adding lines that appeal to a customer they’ve been missing. The question is, will that J.Crew customer like all of the Nordstrom aura wrapped around their favorite J.Crew sweater enough to start buying non-J.Crew items? Also, what happens if J.Crew continues to stumble? Is Nordstrom going to be the latest in a series of retailers who added lines just to see those lines take down their brand image?

It’s the early days, but I’d say that is a potential risk. As to whether we will see more of this kind of thing I think the answer to that question is yes. The real question is, should we see more of this? And the answer to that question is probably no. This feels a lot like the latest death throes of physical, mall-based retail. If everyone starts selling everyone else’s lines, why have separate stores? And, realistically, what will that leave to compete on besides price? Could we see a future where that J.Crew sweater is cheaper at Nordstrom than it is at J.Crew? It’s possible. Building brands is always critical. Diluting them is never wise.

Ed Rosenbaum
Ed Rosenbaum
Member
7 years ago

On the surface this appears to be a win/win for both Nordstrom and J. Crew. Here we have two well-established brands collaborating for the mutual benefit of both. Nordstrom can help bring J.Crew to new customers and J.Crew can bring new customers to Nordstrom.

Lee Kent
Lee Kent
Member
7 years ago

With seven straight quarters of declining same-store sales but the products sell great at Nordstrom, this says that maybe J.Crew doesn’t know who their customer is any more.

It does look like a great deal for J.Crew, though I would suggest they think a lot harder on a marketing strategy for their real customers.

For my 2 cents.

Camille P. Schuster, PhD.
Member
7 years ago

J.Crew and Nordstrom traditionally have not had the same customer. Nordstrom appears to not know their customer or to be changing their customer. This is not a good deal for Nordstrom because it further confuses their image. This is a good deal for J.Crew because customers have a place to go and see merchandise before purchasing.

Dave Wendland
Active Member
Reply to  Camille P. Schuster, PhD.
7 years ago

I agree, Camille. J.Crew is the winner here. And, I’m the first to promote innovation, experimentation, and “partnerships.” This one has me puzzled, however. Seems to be less than a calculated risk … and could affect Nordstrom’s traditional image.

Ken Morris
Trusted Member
7 years ago

I think this is positive move for both J.Crew and Nordstrom. While we are seeing another opposite trend of luxury brands, like Coach, pulling back their wholesale distribution in department stores for greater control and to elevate the exclusivity of their brands, J.Crew is taking a different strategy. Since J.Crew has been struggling to grow their business with seven straight quarters of declining sales, they need to find creative ways to spur more sales.

This is good for J.Crew, as it provides greater sales opportunities without the significant capital expense of operating its own stores.

This is good for Nordstrom, as it provides greater choices for Millennial shoppers that can’t afford luxury brand. And since J.Crew is a brand that Nordstrom’s customers like, this a smart move. Sometimes a counterintuitive strategy to what others are doing is the right way to go and this seems to me to be one such case.

Brian Kelly
Brian Kelly
7 years ago

I don’t know enough. I have more questions than answers.

Madewell made sense as it is “the best” of J.Crew. It sorta replaced Fashionable. Where does J.Crew sit on the floor? Juniors/Young Mens?

Brand J.Crew is struggling. It’s closed and shrunk the size of some of its stores. How will sales associates represent this brand to their customers? How about when there is a J.Crew nearby? What will differentiate the assortments? I guess Bonobos is working, eh?

What will Drexler’s role be vis a vis Nordstrom folks? Will he have input beyond his brands? Is this akin to Disney buying Pixar to have Jobs around or Walmart buying Jet to have Lore around?

Tough call. That’s why we say, “retail ain’t for sissies!”

Naomi K. Shapiro
Naomi K. Shapiro
7 years ago

I believe we are seeing a new shift in retail: How retailers can join forces to present products of more specific affinity, i.e. “curated” stores with a more specific focus or identity, clothing and accessories (and, yes, footwear and handbags) that appeal to a certain targeted demographic — and say bye bye to “all over the place” offerings that no longer appeal to the mass “customer” in a bricks & mortar setting.

Craig Sundstrom
Craig Sundstrom
Noble Member
7 years ago

Somewhat along the lines of “follow the money,” we have “follow the initiation.” Who asked who for this relationship to see who expects to get the most out of it? Reading from the press releases, the other commenters (and I) seem to think it’s J.Crew.
But both will benefit. It’s a quality brand, and if its fans now spend more time in Nordstrom, the only ones likely to suffer are the other stores in the mall (that those customers will no longer pass by).

Carlos Arambula
Carlos Arambula
Member
7 years ago

While I can see new consumers being introduced to the J.Crew franchise, I don’t believe they are the same consumer. I also see brand dilution for J.Crew.

Phil Rubin
Member
7 years ago

Two once great brands struggling to regain relevance, business and growth against a backdrop of upstarts and Amazon. For J.Crew it’s a choice: pursue indirect business via doors like Nordstrom’s or go the way of Gap and pursue indirect business through Amazon.

Both companies will benefit, but the ultimate question is whether it will be enough to stabilize their businesses. My view: they both have a lot more work to do in order to begin to offer a customer experience in line with rising consumer expectations and increasingly discerning tolerances for irrelevance.

Verlin Youd
Member
7 years ago

Disclosure: I am sure that my views are biased based on number of purchases that have been made by Youd family members at both J.Crew and Madewell stores over the last 10 years.

Sure, J.Crew is struggling right now, however the history of specialty clothing retailers in general would have predicted the current state as part of the pattern of success and struggle that seems to be the “sine wave” that besets players in this industry. There are plenty of examples of those who have succeeded, struggled, succeed, and struggled again.

That said, J.Crew’s sister company, Madewell, has been in Nordstrom stores for a while, along with Top Shop and several other specialty retail brands that have their own stores. Certainly the experience with Madewell has informed both J.Crew and Nordstrom in deciding to work as partners.

Partnership is a critical part of the business strategy that is required for success, in retail and many other industries today. Kudos for J.Crew and Nordstrom for trying … and here’s to hoping that they succeed, or almost as good — that they fail fast.