Will J. Crew’s Lower-Priced Line Be The Death Of A Brand?

The Wall Street Journal reported earlier this month that J.Crew now owns the brand name J.Crew Mercantile and is looking to start store openings.  J. Crew Mercantile will offer lower-priced options for the J.Crew brand, along the lines of what Gap is to Banana Republic.  Oddly enough, the prices of the new collection are said to be similar to the prices of J.Crew’s factory outlet stores, traditionally ringing in  in the $100 range instead of the lovely $200-$500 range!

I used to shop at J. Crew years ago as a preppy college student and intern, and looking back the label has become increasingly upscale — with many of their clothes priced at almost the high three figures. The price increase  occurred after the brand was mentioned by First Lady  Michelle Obama, who unofficially named it her brand of choice.  Due to the dramatically increased prices, some people have wondered if the brand has alienated its core customer base. I, for one, much prefer to buy three button-down shirts for $50 each to one pair of pants for $200! Let’s not talk about flip flops for $80! My next thought is…where’s the Gap?!

One solution to J. Crew’s customer alienation was opening Madewell, a supposedly lower-priced chain aimed at a younger demographic.  In my opinion, this was a fail! The prices are a little too high, and they also tried to increase the amount of sales and coupon offerings and increase advertising to highlight one stop shop offerings for the entire family. And remember the J.Crew holiday commercials? Unfortunately, another epic fail! At $150 a pop for a shirt, who would want to purchase an entire wardrobe for themselves, husband, kids, and the dog?

With prices like these, who is J. Crew trying to compete with? Is J. Crew trying to rise to the level of Lacoste? Seems like the overpricing has caused an identity crisis. Also, with J. Crew’s original competitors — Gap, Zara, and Club Monaco — offering the same quality and styles, targeting the same audience, but offering lower prices, should J.Crew bother to create an alternative for the trendy and price-savvy, when they could be working to better align with their  core brand identity? The lower-priced brand option does make sense if J.Crew is looking to redefine its brand and regain its core audience of the trendy and price savvy..but at what cost?

Will J.Crew follow Gap, Inc. (Banana Republic, Gap, and Old Navy) and have J. Crew as its staple brand, with two trendy lower priced options underneath its umbrella? If so, will J. Crew then be seen as a desperate copycat trying to stay afloat after its flurry of FLOTUS endorsements end? When your core audience feels abandoned, how do you regain their loyalty?  We’ve seen loyalty cards increase over the years, but they have also been the demise of good credit, with stores like Nordstrom Rack and Target offering debit connection options instead.  Lastly, with the new stores, will J.Crew be able to maintain its image as the preppy go-to store, or will the brand suffer? We’ll have to wait and see.