Madewell is about to become its own full-fledged company, separate from its corporate parent, J.Crew. Late Friday, Madewell filed paperwork to take itself public and is meeting with investors to gauge interest in an IPO. This is a curious case of a spinoff brand outperforming the heritage company that gave birth to it. (J.Crew declined to comment for this story.)
Former J.Crew CEO Mickey Drexler launched Madewell in 2006, at a time when J.Crew was thriving and had just gone public itself. But over the last 13 years, the fates of the two brands have diverged dramatically. Madewell has been able to adapt to the aesthetic sensibilities of millennial consumers, as well as their shopping habits. J.Crew, on the other hand, has failed to evolve.
In its heyday in the early 2000s, the brand was known for its high quality, which was pitched as an accessible luxury. But five years ago, customers complained that the quality of clothes was declining and the products were overpriced. The brand was unable to move past its preppy aesthetic. And as sales declined, J.Crew resorted to widespread discounting, which diluted the brand. In 2017, the brand’s longtime creative director, Jenna Lyons, stepped down, and a few months later, Drexler himself left. In his place, former West Elm president James Brett was brought in, but he left after a year on the job. As of today, the CEO role at J.Crew is still vacant, the company has accumulated $1.7 billion in debt, and it is shutting down stores.
During this time, Madewell was the bright spot in J.Crew’s business, operating independently of its parent company. Madewell operated much more like a digitally native direct-to-consumer startup than a heritage brand. It had a much smaller retail footprint, with just over 100 stores, compared to J.Crew’s nearly 400. Madewell stores also had a more local feel, featuring brands and artisanal products from the area. In keeping with the values of millennial consumers, Madewell made an effort to offer ethically made products, including jeans made using eco-friendly and Fair Trade practices. All of this suggested that Madewell was plugged into its consumers’ needs, while J.Crew was struggling with how to modernize and stay relevant.
As Madewell spins off to become its own entity, it will no longer be able to help buoy J.Crew and will now have even more freedom to lean into its retail strategy. J.Crew, for its part, will no longer be able to borrow directly from Madewell’s playbook. Unless J.Crew pivots quickly, it will continue to spiral downwards. And with a complete vacuum in leadership, it is unclear what a successful turnaround would look like at this point.
After years of being a great success story in American fashion, J.Crew appears to be going out with a whimper.