J. Crew To Cut 95 Staffers In Cost-Saving Program
J. Crew Group Inc. has eliminated 95 positions (including unfilled jobs) primarily within its New York offices, as well as support functions within its field and distribution centers. The cuts represent roughly 10% of the catalog retailer’s work force.
The employees have been offered severance and other transition assistance, according to a company statement.
In addition to the job cuts, the company has also suspended its matching contributions to its 401(k) offerings through 2009; eliminated 2009 merit-based wage increases for all workers; and is implementing a variety of cost-savings activities, including reducing catalog circulation and examining store operations and real estate holdings.
The company had previously announced plans to reduce its capital expenditures to between $55-$60 million during fiscal 2009. J. Crew expects to record $1.5 million in restructuring fees during fiscal 2009’s first quarter.
The Analyst’s Take: J. Crew’s 2007 annual financial filing – it probably won’t file 2008’s results until later this month – shows catalog circulation at 49 million copies, and Web site visits at 95 million. Wait a year, multichannel marketing advocates, and see whether 2009’s Web site visits decline as catalog circulation drops. Granted, establishing causality is difficult, and it’s entirely possible J. Crew is planning aggressive marketing through other channels. And there are other influences – f’rinstance, the company was quick to point out First Lady Michelle Obama, along with First Daughters Sasha and Malia, wore its products during the days leading up to and including the inauguration. All that said, who’s betting Web visits maintain their 95 million level as catalog circ declines?
