The challenges for fashion industry in the pandemic era and the viable options - case of J. Crew
The global pandemic has hurt the fashion industry in many aspects. Travel restrictions delay the production and delivery of raw materials, and the store closures significantly cut the sales and other transactions of many fashion brands.
J. Crew is a famous American fashion brand. In recent years, J. Crew’s management has discontinued its budget clothing line, which is called Mercantile, and shut down the newly launched Nevereven brand. The former CEO James Brett also departed after a disagreement with the Board about the J. Crew’s turnaround plans. Brett’s departure was also due to the company’s net loss of $5.7 million in 2019 and the loss of $18.4 million in 2018.
The company’s earnings before interest, taxes (EBIT), depreciation and amortization in 2019 were $53.6 million, compared to $68.4 million in the year’s earlier period. By closing Mercantile store and phasing out some sub-brands, J. Crew’s management said that they will return to profitable growth and more diligently manage their balance of investments and expenses.
Risk is a measure of the uncertainty surrounding the return that an investment will earn. Facing the challenges from competitors of both in-store and online retailers, J. Crew has two options: 1) transform its…
