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00:00:00
>> J.Crew, the preppy brand who's popularity peaked with First Lady Michelle Obama adding it to her wardrobe, is betting a new leader can revive its struggling fortunes. J.Crew replacing 72 year old retail legend Mickey Drexler, with Jim Brett as new CEO and hopeful savior for the brand. Reuters' Breaking News Columnist Antony Curry.
00:00:23
>> Well James Brett is coming in from West Elm, which is owned by Williams Sonoma, it's basically a furniture store, with a few other things besides. And yeah, running that, he's done a really good job. He's actually increased revenue there by about 45% over the past couple of years.
00:00:36
He's got that online store going more. He said things to the branch managers, like look, you find what you want to sell in your in stores, you lay it out the way you want, you make sure it appeals to the neighborhood your store is in. And that's kind of appealing right now, Kate.
00:00:49
It may not sound as if this is the perfect background, given that's a furniture store, but he also worked in JCPenney, Urban Outfitters. The guy has a fair bit of experience in retail in general.>> That experience could come in handy. J.Crew has all sorts of problems. Fewer people are buying its upscale clothes priced higher than on-trend brands like H&M.
00:01:10
And as outgoing CEO Drexler admitted, the retailer fell behind the curve in its online shopping game.>> The executive shake up also comes as J.Crew struggles with how to restructure a $1.5 billion pile of debt racked up when it was bought out by private equity group TPG and Leonard Green and Partners in 2011.
00:01:32
>> TPG basically wrote down most of the value of its stake a couple of years ago when it was what was happening with the company, but the company wrote down some of its own assets a couple years ago as well. So it's been well-known that the company's been struggling.
00:01:42
So, really, the new CEO comes in knowing, I suppose the big hope for TPG is look, we've written this down. It's worth virtually nothing now. If he can do something, anything to get the value back up again, then maybe we can write it up and make a bit of money at last.
00:01:55
>> Drexler's departure comes just a few months J.Crew President and Creative Director Jenna Lyons was shown the door. Drexler will stay on as Chairman and still owns 10 % of the company.