Wednesday, August 17, 2011

J.Crew In Canada: Back to Classics {please!}

"Thanks!" to J.Crew Guy In Canada, who let us know about an interesting article over at TheStar (click here to read in its entirety):
In tough times, J.Crew goes back to classics
By Dana Flavelle
August 14, 2011

American clothing retailer J. Crew Group, Inc. says it’s banking on its unique assortment of updated classics to overcome the current economic turmoil as it opens its first Canadian store in Toronto’s Yorkdale shopping mall.

We’re obviously nervous like everyone should be today. So we’re being conservative,” Mickey Drexler, chairman and chief executive officer of the New York-based retailer, said Thursday.

The 5,000 square foot store, which will carry only women’s clothing and accessories, is slated to Aug. 18, the first of as many as 20 Canadian stores, including another five “in the next few years,” he said.

‘We know it’s going to be a reasonably promotional back to school period and holiday season. As always our mission is to offer unique products at fair value,” Drexler said in a telephone interview with the Toronto Star.

“We can’t control the macro-environment,” Drexler added, referring to a week that saw stock markets roil amid concerns high U.S. and European government debt loads could trigger another recession.

“We just have to play it best,” Drexler said, noting J.Crew’s fall lineup will play to its strengths, including bold colours, quirky mixes and matches, woven shirts, perfect and vintage tees, and expanded line of handbags and shoes.

Whether it’s the popular cafĂ© Capri cropped pant, in wool for fall, for $118, or the classic Italian leather Mona pump, for $198, or the fully lined wool Schoolboy blazer (for women), at $188, Drexler describes J.Crew as catering to customers who want designer quality at less than designer prices. (All figures are in U.S. dollars. Canadian pricing has not been disclosed.)

The Yorkdale store is expected to do well, retail industry experts said. The iconic label, a favourite of U.S. First Lady Michelle Obama, is already well known to Canadians who shop its catalogue, website and U.S. border stores.

‘They should do well at least initially, as the women’s wear market welcomes new stores with open arms if that new retailer comes with a reputation: Michelle Obama – need I say more?” said Ed Strapagiel, executive vice-president at market research firm KubasPrimedia in Toronto.

“Yorkdale mall, however, might present some challenges once they complete their expansion next year. We just don’t know what retailers are going in there,” Strapagiel cautioned.

Indeed, J.Crew is just one of a slew of American and European retailers set to converge on the Canadian market, making it their first stop on the road to international expansion as growth slows at home.

Drexler acknowledged that in the current climate the game will be about winning market share from competitors. “Whatever we do we take away from someone else. There’s isn’t a lot of growth yet,” he said, noting that’s how Apple Inc. has flourished. The 66-year-old seasoned retailer sits on Apple’s board.

In Canada, J.Crew’s are expected to take a bite out of broad range of competitors, from the Bay to Banana Republic, said Maureen Atkinson, a principal in the retail consulting firm J. C. William Group Inc., of Toronto.

“They’re a bit like Ralph Lauren in that updated classics are really the style. Price point-wise they’d compete with Banana Republic but Banana Republic is a little more trendy in style,” Atkinson said.

A huge J. Crew fan herself, Atkinson said the retailer is almost in a category of its own, particularly in the Canadian market, where most clothing is either so trendy it goes out of style fast or is well made but “dowdy.”

Drexler, who joined J. Crew in 2003 after 18 years with the Gap, where he grew the business from $400 million to $14 billion U.S. a year, has brought some much needed flair to the brand, Atkinson said.

J.Crew plans to open as many as 20 stores across Canada, including five in the next few years, Drexler said. Future locations could include Toronto’s Eaton Centre and Vancouver’s Robson St., he said, though no leases have been signed.

The prices in its Canadian stores may differ from its U.S. prices, the retailer said. “Price increase account for foreign exchange rates and other costs of doing business internationally,” the company said in a statement.

The opening of the Yorkdale store will coincide with the launch of a Canadian website where prices will be quoted in Canadian dollars, the retailer said.

Drexler said he expects the store and its online business will complement each other as they have in the U.S. “Online sales bring more awareness to our stores and stores bring more awareness to online,” he said.
I love that Canada will have their own J.Crew website!!! Totally makes sense now too (since J.Crew will be offering a flat shipping rate for its Canadian customers starting August 18th). My hope is that the prices won't be marked up too much.

What are your thoughts on the article? Any points you found particularly interesting?

59 comments:

  1. Congrats to JCA's out east. Please share pics of the new store! I can't wait for a JC to open up in Vancouver, but Robson Street? Yuck. I'm perfectly willing to overlook a 10% price difference between US and Canada prices (justifiably because I don't have to drive to the border to pick up packages or further to a mall near Seattle), but anything over 15% means I'll have my packages shipped to a border town mail drop service.

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  2. Thank God Mickey is the voice of reason and bringing back the classics. It is nice to hear that in these tough economic times that a company is actually expanding and not closing like so many others. I am glad there will be more jobs for Canadians. I just wish they were opening more stores in the USA as well. Lord knows we could use the jobs!

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  3. So if the prices will be different to account for foreign exchange rates, then we shall see a tad smaller prices, right? I highly doubt it, though.

    CC, that's exactly what I said when I first saw Robson Street last week. I hate going there at any time of the day or week!.

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  4. I work at the corner of Robson and Burrard and hate to think of a J Crew being there... I'll be in it 5 times a day!

    I don't imagine the Canadian prices will be any good despite the fact that our dollar's higher than the US one. They'll add in hidden duties and costs plus any other cost of importing, I'm sure. That's why Pottery Barn, Banada Republic, Anthro etc all have prices almost a third higher than in the US. It's really unfair! I may continue buying from the US and having things shipped to Point Roberts... at least when we have a store here finally I'll be able to try on and see things in person before I order!

    BTW there's a lengthy article in the latest Flare magazine about J Crew, Jenna and Mickey but it's not on the magazine's website... just mentioning it in case any fellow Canadian JCAs are interested...

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  5. I will be very curious about the price differential.

    I was just in Maine last week and bought a few lovely things at Banana Republic. One, a silk shell, was $49 US in the store in Maine and when I went to check on the price in the Canadian website as I was interested in another color, the cost was $62. Quite a difference. However, I find Banana Republic offers fairly regular discounts on its full price items, so can usually wait and snag at an equivalent price...

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  7. I better get my order in today I will wait to order from the Canadian website until all the bugs are worked out.

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  8. I *knew* there was going to be a new website. Brace yourself JCAs, let's hope this goes smoother than the last "upgrade" :^P

    I am surprised they are expanding their shoe line. We see so many of them languishing in the sale section, there were well over 200 a couple weeks ago, still 176 styles there today.

    Anyhoo, excited for the JCAs in the Toronto area. Have fun!

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  9. I'm cautiously excited about the Canadian website, but I'm not holding my breath on the Canadian prices being the same as the U.S. One only has to look at Gap/BR and Anthropologie to see the (major) price difference between Canada and U.S. Anyway, I hope the Canadian website will carry the same stock, and have the same sales and promos as the U.S. website. Plus, it will be so much more convenient to be able to order from a Canadian website/warehouse and not have to pay the astronomical UPS shipping/brokerage fees.

    I will be taking photos tomorrow morning and posting them on my blog later in the day! (Probably only of the store front as I doubt I would be allowed to take photos of the interior.)

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  10. Spoke with Jcrew customer service today - We Canadians will no longer we able to order from US site - they assured me codes would still work on Canadian site and that it too would have a sale section but I assume it to will be like the Gap and BP site - higher prices (even without having duty) and way less sale stock and stock in general. I think tomorrow will be a sad day for Canadian JCrew shoppers except those living near Toronto

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  11. @Loved my JCrew: That's just what I was fearing - that the Canadian site would be like the Gap Canada stock - less stock overall, and higher prices. Not good news!! However, I have been able to order from the U.S. Gap website by calling their toll-free number and having it mailed to my U.S. shipping address. It's a hassle but it does work. Hopefully it will be the same for J. Crew.

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  12. I can't believe I won't be able to order from the US site, okay guys this is very bad news!
    Guess I'll be sending all of my packages to my Dad in Atlanta.
    You just know the prices are going to be at least 25% more even though our dollar is worth more than the US.
    :(

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  13. I just placed an order this morning I hate paying fp it will be interesting to see if and when it ships.

    I cannot believe just 1 store opening is preventing us from ordering from the US site it will be a long while before 20 stores will be opened. J Crew you just ticked me off.

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  14. Flat rate shipping to Canada of 9.95. That's something!

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  15. We can't shop from the US site anymore?? WTH is that all about!?I'm very disappointed. Although I intend to do most of my JC shopping at the new Toronto store, there are always online-only items that I want. I only hope the new Canadian site is identical in every other way to the US site.

    I'll be at Yorkdale early tomorrow, see you JCAs there! :)

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  16. I was worried about this, not being able to order from the US site. In my opinion, it will still be cheaper to pay duty etc. than to pay Canadian prices plus HST plus shipping even if it's flat rate.

    I spoke to customer service the other day and the rep said he was nervous too about the changes, hoping that the website would go smoothly etc. I was told there would be an area to click on 'ship to Canada' so I thought it would still be the US site with the exact same merchandise but in Canadian prices (like Pottery Barn Kids). He actually said that the website would calculate the Cdn price based on the daily exchange rate but I have a hard time believing that.

    I'm a little nervous for tomorrow. :)

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  17. I'm happy for the Canadian JCAs who'll be near the store. However, I hope everything goes smoothly and without things being overcharged and disadvantages of shopping from US website.

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  18. I just talked to a CSR at J Crew and according to her the product on the Canadian site will be the exact same as the US site. Prices will just be changed to reflect Canadian Dollar and Duty.

    For me the biggest concern was if the site will still have the Tall sizes in Men's clothing. According to the rep, Tall sizes will still be available.

    I guess we won't know for sure until tomorrow....

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  19. Update for Canadian JCA's the order I placed this am status is general error so it looks like we can no longer order from the US side.

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  20. When I order online I generally ship my items to a shipping depot just across the border. It's so much cheaper to just pay HST when I'm crossing back over the border than it is to pay the insane duty and brokerage. I'm hoping that if I have a US shipping address I will still be able to order from the US site without having to call customer service (that is how Anthro does it - I have to order off of the Canadian website if I'm shipping to Canada, but I can order off of the US website if I'm shipping to the States). I'm so nervous now!

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  22. I can't help feeling ripped off (in general, not just by JC) that the Canadian dollar is and has been higher than the US dollar for ages, yet we're still paying more for the same merchandise. It's nonsense. I guess I'll continue to shop at the US stores when I'm south of the border because it'll be a better deal in the long run.

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  23. Well, the change of website answers the question about pricing. Obviously if they aren't going to allow us to order from the US site anymore, the prices are going to be higher than if we did. Once they pass the 15% markup, it becomes more expensive than paying for duties and HST. Especially considering they always honored free shipping to Canada. A $100 item would cost $131 from US with duties and taxes. A 15% markup, with HST, on that same item comes to $129.95.

    So, I am guessing (but hoping I am wrong!) that the markup is going to be much higher which is why they won't let us buy from the US anymore. If this is the case, I guess I will be using the CAD store more for trying sizes on and sales and will ship to my parent's house in TN whenever I plan a trip down.

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  24. Sorry to hog this thread, I just got off the phone with CS my order is in limbo they do not know what happened they have never seen general error before on the website sounds friggin familar to 2008 to me.

    The items are still coming from the US warehouse so we are not going to benefit from the exchange rate because the prices are already going to be set.

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  25. Clicquot
    I believe the difference, at least with textiles, is that Canada charges an 18% duty on textiles made in China, which unfortunately is where JCrew (and most other US brands) has their clothing made. I believe the US signed an MOU with China to waive duties for textiles entering the US from China.

    My guess is, when they are converting to CAD $, they are taking their cost, adding 18%, THEN applying their typical markup, which for clothing is generally pretty high. Just take a look at their sale $ in comparison to full $ (and they are still making $$ on sale $) and you figure they are marking up anywhere from 100-400% over cost. If they add that on AFTER the 18% markup, that means you are paying that 100-400% markup on the duty as well, which is why the prices are so much higher. Just my hypothesis anyway..... and it's still crummy for us.

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  26. I feel so bad for you guys having to put up with this. It seems it would be cheaper to take a flight to Buffalo or someplace like that, load up and then fly back home. :(

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  27. I'm really happy that shipping is going to be cheaper - and presumably returns will ship to a Canadian address as well?? If it like BR/GAP Canada, where all I have to do is stick the label on and drop it in the mail, then I will be a happy camper. I just hope we have the same stock selections as the US site, or at least a good portion. The BR Canada site doesn't have as much stock as the US site, but there is enough there to make me happy. If the JC site is comparable then I can totally live with that!

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  28. Just a question - the new CDN site goes live tomorrow?

    I'm excited to see!

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  29. NOOOOOOOOOO!
    I was so scared this would happen. If it is anything like the Canadian websites for Gap and BR, it will be terrible. The selection is much smaller and the prices much higher. This is absolutely dreadful news. I will be joining the other Canadians who have orders shipped to a depot across the border. :( :( :( :(

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  30. Loved my JCREW, I would be surprised to see how they would enforce that, if I order from the US site and have stuff shipped to a US address. I travel to the US and stay there long enough to bring my stuff duty exempt.

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  31. @Elaine: that's so funny, I just made plans with a friend to drive to Buffalo to stock up on Saturday.

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  32. Elaine - Unfortunately the Buffalo store (which is the one closest to Toronto and the surrounding area) isn't great in terms of selection. They don't carry cashmere and only just started carrying ballet flats (no other shoes, though). They also tend not to get the best merchandise or colours - never got the Paisley Pencil Skirt, I was there recently and they said they didn't expect to get any colours in the No. 2 pencil except the charcoal and black, and no colours in the wool cafe capri except black and camel.

    Hopefully they were wrong about the colours in the recent items though, and they will have them this weekend!

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  33. Yep, I know the BFLO store is on the small side -- I went to college about an hour south of there and was recently back in the area for my 15-year reunion ... of course had to stop off at the Crew for a look-see! At that time they had a hefty sale section, which was great. But as with my local store, there are hardly any shoes and no stacks and stacks of cashmere or really any fun Collection stuff either. :( I find it weird that they wouldn't get staple items like those pencil skirts, but maybe they just don't sell enough of them...?

    Anyway, I'm really mad on y'alls behalf. I just don't see how this is right. I can't imagine having to pay even MORE than what I pay for JC items! Booooooo. :(

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  34. Loved my jcrew: Of course if you have a US address you can still order from US site but not all of us want to go through a secondary site - estimate weight and size of parcel - just to see if is a deal after their large shipping cost.
    Jcrew was previously one of the US sites that offered us Canadians the free shipping option and great deals - stores like Victoria secret never include us Canadians even though many stores in Canada.

    CS also said the Toronto store will not accept JCrew credit cards at this point in time.

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  35. I placed an order early this morning and it has been released, no issues that I can see but let's wait until it ships to know for sure. Maybe I should have waited one more day.

    I have used my online PS for so many WWFIFY searches, I wonder how that will work starting tomorrow. There is only one Canadian store so hopefully they can still search the U.S. stores to find the items. I always liked that the shipping was free for Find It items and I didn't have to pay the outrageous UPS fees, usually just the local tax. I bet that will all change too.

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  36. xoxo: My order from this am stills says General Error, and no one at JC knows why!!

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  37. xoxo - I'm very curious to see what tomorrow brings. I cannot see a full site revamp. I see them integrating the new currency/shipping feature and that's about it. I will be shocked if they introduce a whole new site with upgrades like review capability. Heck, I might get up early for this one or stay up late.

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  39. My heart literally stopped when I read that we cdns wouldn't be able to order from the US site.

    Luckily, I live an hour by the US border and there's a UPS store there, but what a hassle since I order often. I liked having things delivered directly to me.

    Maybe this will put a stop to my overspending on the site, but I am quite sad that it has happened before the fall when I was planning to make huge purchases.

    I am so disappointed.

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  40. casual-crew, can J.Crew cancel your order and resubmit it for you? Maybe a longshot given the ineptitude of their website but maybe worth a try to get the order moving at least.

    Gigi, I am really curious and will be checking the site at midnight Eastern tonight. When the $175 free ship promo was extended to August 17 I thought it was odd until I remembered the Canada store opening August 8, then the light bulb went on. Maybe, just maybe a site revamp will be a good thing.

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  41. ^ I mean August 18, not August 8.

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  42. I don't anticipate a major revamp, but what do I know. I'm just hoping for a sale inventory blowout once and for all. Let's start fresh this fall! C'mon, Mickey.

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  43. xoxo: I am starting to believe it is an inventory problem and a glitch on their website showing inventory when there isn't any, all the other colors are backordered until September.

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  44. casual-crew, well I hope it all works out for you in the end. Good luck!

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  45. OK, I am just too curious so I had to call CS and ask what changes we will see on the website tomorrow. The person I talked to had to put me on hold for a few minutes to get details. She said that tomorrow we will see the ship to country option in the top right corner of the web page and clicking on that gives CDN pricing and shipping options but they have no details on pricing yet - they can't see it until it is launched. I assume the ship to country will also include UK and the related pricing as an option.

    Ship to Canada will offer the $9.95 flat rate shipping that has been discussed and also a 3-day service for $25 flat rate, which is not bad for a huge order or an expensive item. CS also said that PayPal would be available, which I think is great for the shoppers who may not have credit cards, such as some high school or college-age customers and kudos to J.Crew for offering the service to enable, I mean entice more shoppers.

    I was told that other than that the inventory and everything else about the site will be the same except for a few minor updates but the CSR didn't know what was included in the minor updates. Guess we'll see.

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  46. xoxo Thanks for calling CS!
    I bet I'll be propelled out of bed early tomorrow by my need to know what the changes will be.

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  47. xoxo, PayPal is a great idea in my opinion. The J Crew card is just archaic!

    Let's hope the site doesn't crash tomorrow a.m.

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  49. Now THAT is some good news -- I've been hoping Paypal would be added as a payment option! I really only use it for ebay and drugstore.com, but it's FABULOUS that we will be able to use it at JC too, woot! Thanks for the info!

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  50. Dani, I am obsessed it would seem, but I always try to uncover the secrets. I would love to be a spy. Yes, calling CS is real detective work. Mata Hari I am not. LOL I will be checking tonight, if it rolls over to the new version at 10m MDT.

    Rose, I like the PayPal option. Sell something on ebay and just leave the $ in your PayPal account, then use it when you buy something new on J.Crew. Great for ebayers and people who do not want to or can't use credit cards. At least they are embracing alternate payment options, ignoring other advances in online shopping it would seem. Baby steps, I guess.

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  51. Elaine, I agree. Customers need payment options and paypal is prolific. Curious what happens for a return though, does it go back to paypal or do we get to choose or...?

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  52. xoxo: LOL Mata Hari!
    Right, you are on MT you will be first to know... I'll be going to bed early with my wretched tonsillitis and then perhaps having a bad surprise in the morning.
    I just don't believe one bit that the CAN site will contain all of the products... I even placed one last US site order today (oh for old times-sake! ;) )
    I guess I am sounding like a real old fogey in my aversion to change!

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  53. Dani, I hope you are well very soon. The website will be there forever after so no need to stay up, go to bed and rest. I have a late meeting so I will be up, but I have an early one too, sleep has not been easy this week.

    I also placed orders today, one online and a find it request with my PS, which was successful so let's see what happens with our final U.S. orders, shall we? Well, maybe not final for you but I live far from the border and can't bring myself to ask family to hold packages for me, especially with the shorter return window. They would think I've lost my mind anyway. They have no idea how different it is to shop from Canada.

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  54. I see nothing new yet. Good night.

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  55. xoxo - That's about what I envisioned. A currency change option like ASOS has. I am skeptical about Paypal. I don't believe it will be an option in the US. Of course soon we'll see if I'm wrong. I used to feel optimistic, but I have to say I have more of a skeptical attitude when JC introduces new policies. It's like every change must include some sort of shaft for the customer.

    Yup, nothing new as of 12:54a EST. Back up your carts on your computer, though. Surely those will be dumped.

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  56. Insomnia, so yup, I'm still up at 3a.m. Thought I might as well check out the "new" J.Crew website. I'm not quite understanding it? Increased prices by 15%, but still shipping from U.S. warehouse so the order will still incur duties? I just did a mock checkout and would have been charged $12 tax on a $35 order.

    ?!?!?!?!??!

    How is this a good thing???? 15% markup + tax + duty????

    Very disappointed. Way to shaft us Canadians.

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  57. I just looked some items are cheaper due to the flat rate shipping and other items like jeans we are truly ripped off, the item is made in the USA and we are charged duty in the base price.

    Good thing I placed all those orders this month it would have more money. The Around Town sweatshirt went up by 20.00 more than what I paid for last week at fp.

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  58. It doesn't make any sense. They dropped the shipping rate to Canada to $9.95, but the prices on individual items shipped to Canada is higher! So if you add a few items to your cart you quickly make up the difference from the $19 shipping option they had before and surpass it. Add on duties and taxes and it's more expensive than before.

    Let's hope this is just a bug.

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  59. The trend in buying, ordering online increasing tremendously starting from advising to selections...then why tough economic times that a company is actually expanding and not closing like so many others..

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