J.Crew is the latest retailer to start selling on Amazon after saying it wouldn't (AMZN)
- J.Crew's low-cost Mercantile clothing line is now available on Amazon.
- The new partnership marks a decisive shift in J.Crew's strategy as its new CEO looks to make the brand more accessible.
- J.Crew Mercantile is the company's value-oriented label, which was initially offered as a line at its factory stores and later rolled out into its own stores in 2015.
If you can't beat them, join them.
On Wednesday, J.Crew became the latest brand to sell its wares on Amazon after initially holding out.
J.Crew's Amazon page features pieces from Mercantile, the company's value-oriented label, which was initially offered as a line at its factory stores and later rolled out into its own stores in 2015. It offers a mix of clothing from women's T-shirts costing $12.50 to men's shirts costing $45.
The news may have come as a surprise to some considering that J.Crew's former and longtime CEO, Mickey Drexler, has said in the past that the company had no plans to ever sell on Amazon.
"No. 1, they own the customer," he said at The New York Times' DealBook conference last year, adding that Amazon could "take every bestseller and put it into their private label collection," The Wall Street Journal reported on Wednesday.
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Drexler also said at the time that the company was, at one point, exploring plans to be acquired by Amazon, but the deal did not go through.
However, the Amazon partnership fits neatly into the strategy of J.Crew's new CEO, Jim Brett, and his push to make the brand more accessible. J.Crew had been accused of becoming unaffordable and impractical and had alienated some customers under the leadership of Drexler and the company's longtime creative director, Jenna Lyons.
Brett's strategy seems to be paying off. J.Crew's same-store sales numbers turned a corner in the company's most recent quarterly results after dropping for the last three years. In August, J.Crew's namesake brand reported a 1% increase in comparable sales for the second quarter.
According to The Journal, J.Crew is selling the merchandise directly to Amazon, and beyond providing photos for the listings, it will not have control over how the items are warehoused and shipped.
Brett told The Journal that the brand has developed a "good understanding" with Amazon, however.
"There are other discount retailers that have developed their own lower-priced versions of J.Crew. Amazon wanted to work directly with the people who created the concept," he said.
J.Crew declined to comment further to Business Insider.
Amazon is expected to be the leading US apparel retailer in 2018, according to an analysis from Morgan Stanley that was reported by CNBC. It had 7.9% of market share in US apparel retail sales in 2017, coming in second to Walmart's 8.6%.
J.Crew joins a selection of other retailers including Nike, Best Buy, Sears, and most recently, Chico's, that have started selling on Amazon. Chico's doesn't seem to be reaping the rewards of this relationship just yet, however. In its most recent quarterly results, reported in August, same-store sales were down.
Still, Chico's CEO Shelley Broader said in a call with investors at the time that the collaboration with Amazon "is progressing nicely" and giving the brand access to new customers.
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