Welcome to the New Frugality.
J. Crew is the latest retailer to accept the reality of the new, penny-pinching consumer, revealing plans to launch J. Crew Mercantile this fall. The retailer’s chairman and chief executive officer Millard “Mickey” Drexler has used this formula before. As ceo of Gap Inc., he oversaw the development of the value-focused Old Navy format, which sat below its Banana Republic and Gap brands. Drexler has had to notice that, even as the Gap and Banana brands have struggled in recent years, Old Navy has been the group’s star performer with consistent same-store sales growth.
But J. Crew and Gap are in no ways alone. The growth of more value-driven chains is on top of the expansion of traditional outlets, which both of those retailers continue to operate as do brands from Ralph Lauren to Michael Kors. Among specialty retailers, Express Inc. has quietly grown its Express Factory Outlet concept to 41 units of its 600 total stores with plans to add another 30 this year, and eventually roll out 150 off-price units. …
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