J. Crew Group Inc.
During the 1980s and 1990s, J. Crew grew into one of the most successful mail-order clothing companies in North America. But there is no real Mr. or Ms. Crew—the name is an invented one. What is not illusion, however, is the rich, playful image the catalog projects and that the images are a direct link to J. Crew's founding family: the Cinaders. Arthur Cinader founded the company in 1983, and soon afterward daughter Emily Cinader Woods came aboard, eventually rising to the post of chief designer. Rarely does a direct-mail business evolve into what is almost a designer line, but in less than two decades the Cinaders have nearly succeeded in accomplishing just such a feat.
Arthur Cinader founded J. Crew with assets derived from a decades-old family business. In 1947 Mitchell Cinader, Arthur's father, founded a catalog called the Popular Club Plan. It offered goods that appealed to households of moderate income and included easy payment plans. The clothes and home furnishings were marketed by sales representatives, called "secretaries", who worked much in the same way Avon sales people operated—distributing frequent catalogs and taking orders. With the growth of the company, the Cinader family invested elsewhere, and for a time Arthur Cinader managed a bank in New Mexico owned by the family. As a young man, he was known for his irreverent sense of fashion and possessed the resources to indulge it. He met his wife while skiing in Switzerland and during the baby-boom era they became parents to children Arthur Jr., Maud, Abigail, and Emily. Daughter Emily Cinader grew up to attend the University of Denver, where she earned a degree in marketing in the early 1980s. Around that same time the family sold off some holdings to finance the launch of a catalog-clothing company geared toward the upscale market. All the Cinader offspring became involved in the family business in some capacity: Arthur Jr. held an executive post at the J. Crew plant, Maud became a photographer for catalog, and Abigail modeled, as did Maud's infant daughter in the mid-1990s.
In the early 1980s, the number of people buying goods from catalogs was increasing at a steady rate. The Maine firm L. L. Bean was the best-known of the bunch, selling durable outdoor gear to suburbanites; Talbots and Lands End were also popular. Cinader founded J. Crew in 1983 as a lower-priced version of designer Ralph Laurens old-money look, which was wildly popular at the time. Providing classic looking clothing for baby-boomers, who were suddenly earning healthy salaries in the economic boom of the decade, would prove lucrative to Lauren, J. Crew, and a number of other retailers. During their first year in business, J. Crew sold $4 million worth of goods.
The first few catalogs featured gear from other clothiers, such as Boston Traders and Ray Ban. There were only a few actual J. Crew items. That changed with the arrival of Emily Woods, Cinader's daughter. Beginning as an assistant buyer, she worked her way through various departments in the company and was exceptionally proficient in designing new apparel. Her inspiration was simple, "The premise was to make the kinds of clothes I really wanted to wear but just couldn't find," Woods recalled in a Harpers Bazaar interview. "Back then," she said, "T-shirts all had writing on them or were 50 percent polyester." The classic, put-together, yet casual look became the backbone of the J. Crew line, and appealed to millions. Within a few years Emily was the company's chief designer.
In the late 1980s, the company offered anywhere from 14 to 18 catalogs per year, and mailed each of those to approximately 3 million households. The J. Crew line appealed to a demographic segment that was urban-dwelling, had some college education, and a household income of around $62,000. Though the clothing line was extremely successful at this point, the company itself did encounter rough patches. It was really three divisions: J. Crew, the Popular Club Plan, and Clifford & Wills, a direct-mail business launched in 1984. All three became The J. Crew Group in 1988. For the 1989 fiscal year, it was estimated that over half the group's $320 million in sales was derived from the J. Crew catalog and retail operations.
In the mid-1980s two top executives left the company and began Tweeds, a successful catalog competitor. In response, J. Crew launched an upscale career line for women called Collection. The line offered much pricier clothing, but did not do as well as expected and the company was forced to issue a major holiday catalog, which it had never done before. The Cinaders next move was to open J. Crew stores, a transition which many direct-mail analysts noted was an extremely risky proposition.
Yet the first J. Crew store opened in 1989 at South Street Seaport in New York City and launched a new era for the company. The sleek, well designed stores reflected the J. Crew look and several more were opened around the country over the next few years. With a few minor exceptions, the new venture was a success. Overall catalog sales fell off in the early 1990s, and companies like J. Crew were faced with increased costs as mailing rates rose in the early 1990s.
Chronology: Arthur Cinader
1947: Popular Club Plan founded.
c. 1960: Daughter Emily Cinader born.
1983: Founded J. Crew.
1989: First J. Crew store opened.
1990: Sales reached $400 million annually.
1993: Entered European market.
1995: J. Crew mailed 70 million catalogs annually to homes.
1997: Sold company to Texas Pacific Group for $560 million.
By 1997 there were 47 stores and nearly as many factory outlet stores, a necessary evil in the catalog business. Outlet stores do not feature the same sleek wood- and-steel look of the upscale J. Crew stores, and only exist to sell off unsold clothing. Most are located far from urban centers, in the vast, almost-rural outlet mall centers. "I'm not happy if I hear a good customer say that they went shopping at an outlet store when she could have been shopping from the catalog," Woods told Sara Fiedelholtz in WWD.
J. Crew's success has been credited to the Cinader and Woods duo. As Woods told Fiedelholtz, "He and I are a great team. We balance each other really well." But father and daughter ran a tight ship, and often had difficulty keeping the top executives on board. Cinader oversaw the business and operations end of the company, was extremely knowledgeable about computers, and had a reputation as a workaholic. He was chiefly responsible for the catalog copy which, with its eyecatching layout, broke all the rules in the industry. It had a much fresher look than its competition. "It conveys an image both urban and estate," explained Diane Cyr in Catalog Age. "Its jewel-toned layouts, single-image pages and imaginatively cropped photos have inspired legions of stylistic imitators." In the 1990s, J. Crew's clothing line took on a sexier look as well, which also fit in with the times. Woods was credited with the new look, and her skill in sensing and providing what women like herself want to wear has won her praise from high quarters.
With the company's growth in the 1980s, J. Crew relocated from New Jersey to a hip corner of Manhattan, in Chelsea. "The open, unvarnished space enabled Cinader to move freely from department to department," wrote Cyr, "creating an atmosphere characterized by some as discussion-oriented and ahead of its time, and by others as controlling and loony bin." Not surprisingly, Cinader rarely gave interviews to the media, but once admitted to the New York Times, that he liked to conduct informal market research. Cinader said, "I do a lot of skiing and talk to many people on ski lifts. I call this my ski-lift research. When I talk with someone, I will almost always find a J. Crew customer. We never meet a college student who doesn't know J. Crew very well."
In 1997 Cinader and Woods sold off 88 percent of the company in a leveraged buyout by the Texas Pacific Group for $560 million; sales that year had reached $828 million. In the 1990s, the Cinader profits on sales had ranged from $12 million to $14 million. Cinader, now 70 years old, retired but stayed on as a consultant. Woods kept 12 percent of the stock, and began looking for a new operating partner. She took on the title of chair and CEO, and signed a five-year contract with Texas Pacific to run the company.
Social and Economic Impact
J. Crew has won praise for taking the idea of L.L. Bean, combining it with the look of Ralph Lauren, and pricing it affordably for the average-income shopper. Furthermore, the firm has successfully expanded into retail operations, not a simple feat. The company offers not just clothes, but seems to sell its devotees an envied lifestyle. "We did focus groups, and people would say they wanted their lives to be like the J. Crew catalog," noted Ray Slyper, a former marketing executive for the company, in Catalog Age.
Not surprisingly, the J. Crew look has translated well overseas. J. Crew has customers in Europe and thriving stores in Japan. Like their competitors Eddie Bauer and Banana Republic, they also plan to enter the home furnishings field to help create a total J. Crew world for their customers. Arthur Cinader took a small catalog business and turned it into a multi-million dollar fashion phenomenon. He successfully developed a retail arm while maintaining the catalog presence, and became a household name that epitomized quality casual apparel.
Sources of Information
Browne, Alix. "From Main Street to Prince Street." Harpers Bazaar, November 1996.
Cyr, Diane. "King Arthurs Crew." Catalog Age, January 1997.
Fiedelholtz, Sara. "Emily Woods: J. Crews Steady Captain." WWD, 1 September 1993.
Kleinfield, N. R. "Even for J. Crew, the Mail-Order Boom Days Are Over." New York Times, 2 September 1990.
Moin, David, and Sidney Rutberg. "The Book on J. Crew." WWD, 11 December 1997.
Rutberg, Sidney. "J. Crew Founders Get Big Bucks in Texas Pacific Deal." Daily News Record, 12 December 1997.