Despite failure with their first overseas attempt, J. Crew has announced a plan to open stores in Europe and Asia starting “soon,” according to CEO Mickey Drexler. J. Crew’s previous attempt at overseas expansion was a joint venture with a Japanese partner – all 70 stores closed, leaving Drexler and fund partners extremely cautious about their next international attempt. Though the retailer is relatively small in terms of store count and revenue, sales have increased for each of the past eight years, and the company claims 30% of all customers comments are inquiries into overseas availability. Meanwhile, competition from foreign retailers entering the U.S. market is not slowing, reinforcing J. Crew’s need to make strides toward a long-term expansion plan. In the immediate future, J. Crew is testing the waters by offering shipping to 107 countries, up from 3, in an attempt to boost revenue and identify the countries with the highest demand.
From one perspective it looks as if J. Crew is piecemealing a plan together as they go, with baby steps and hesitation along the way. The problem with this is that J. Crew’s biggest competitors have been diving into international markets head first for years now, learning the foreign market, building a presence and branding their products along the way. On the other hand, having learned from previous market entry mistakes, perhaps J. Crew’s cautious approach will take the form of the Tortoise and the Hare, where the slow and steady approach ultimately reigns supreme. After all, as competing retailers have over-expanded and saturated the U.S. market, forcing closures and bankruptcy, J. Crew claims their domestic expansion isn’t yet complete. Since going private in 2011, Drexler no longer has operational pressure from shareholders, but with private equity firms onboard for hundred of millions of dollars, the residing sentiment to Drexler is probably “don’t mess this up,” although not likely in such kind terms.