(Bloomberg) -- J. Crew Group Inc., the struggling apparel chain, will shake up its management ranks and cut 250 jobs in a bid to revive growth.
As part of the overhaul, Chief Operating Officer Michael Nicholson will begin overseeing the J. Crew brand, including marketing and design decisions. Nicholson, a 50-year-old former Ann Inc. executive who joined the retailer last year, also has the job of chief financial officer, giving him a central role in the attempt to turn around the business.
Chief Executive Officer Mickey Drexler, who previously ran Gap Inc., is taking more drastic steps to reinvigorate the former retail darling. The company is coping with shrinking sales and a broader shift away from mall-based retail. Same-store sales -- a key benchmark -- fell 7 percent last year and 8 percent in 2015. The company also has a heavy debt load tied to its 2011 purchase by TPG Capital and Leonard Green & Partners LP.
Among the other changes announced Tuesday, Lisa Greenwald will become chief merchandising officer for the J. Crew brand, putting her in charge of men's, women's and kids' products. She previously oversaw merchandising at the company's Madewell division. Libby Wadle, who had been president of J. Crew, will take that same role at Madewell.
The job cuts will include 150 full-time positions and 100 open slots, mostly at the company's New York headquarters. The move is expected to eventually generate $30 million in annual cost savings, though it will bring a one-time charge of $10 million for severance payments and other termination costs in the first quarter.
The latest upheaval comes about three weeks after J. Crew announced that longtime creative director Jenna Lyons will leave the company at the end of 2017. Drexler also is talking with creditors about restructuring the company's debt. One of his proposals, a plan to shift the J. Crew brand name to an entity in the Cayman Islands, has riled lenders. They say the change could prevent them from demanding the intellectual property as collateral or lower the value of their holdings in any restructuring.
To contact the reporter on this story: Lindsey Rupp in New York at lrupp2@bloomberg.net.
To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Dan Wilchins
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