J. Crew's Longtime Fashion Designer Will Leave Beleaguered Chain

(Bloomberg) -- J. Crew Group Inc. executive Jenna Lyons, who provided the preppy apparel chain's creative vision for years, will be stepping down from the ailing company.

Lyons, J. Crew's president and executive creative director, will depart when her contract expires in December, the company said on Monday. Somsack Sikhounmuong, who currently oversees women's design, will be elevated immediately to chief design officer, heading up the teams that handle men's, women's and kids' clothing.

The change brings fresh upheaval to a chain suffering from sputtering sales, heavy debt and a broader shift away from mall-based retail. Same-store sales -- a key measure -- fell 7 percent last year and 8 percent in 2015. The company also has been hobbled by borrowing tied to its 2011 purchase by TPG Capital and Leonard Green & Partners LP.

J. Crew, led by Chief Executive Officer Mickey Drexler, has been trying to turn around its operations by closing stores, cutting costs and streamlining its inventory. The efforts have helped reduce red ink: The company posted net income of $1.1 million in its most recently reported quarter, compared with a loss of $7 million a year earlier.

But complaints about the clothes themselves have also dogged the chain in recent years. Customers have groused about high prices and ill-fitting garments, contributing to weak sales.

“We just made mistakes,” Drexler said on a 2015 conference call with analysts. “We clearly got sloppy.”

The job of winning back customers with the right styles will now fall to Sikhounmuong, who previously ran design for Madewell, an offshoot brand of J. Crew's that has outperformed its parent company.

“J. Crew is focused on continuing the progress underway as we execute on our strategic initiatives,” Drexler said in a statement. “Somsack and our design teams have a deep understanding of the aesthetic and style our customers rely on J. Crew to deliver.”

To contact the reporter on this story: Nick Turner in New York at nturner7@bloomberg.net.

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Lisa Wolfson