King of cool(cont.)
While he was at Gap, however, his next opportunity was taking shape. In 1997 the private equity firm TPG bought an 88% stake in J. Crew from Emily Cinader and her catalog-mogul father, Arthur, for just under $527 million. The father-daughter duo had launched the preppie outfitter as a catalog in 1983 and opened their first retail store in 1989 at New York City's South Street Seaport.
After TPG bought in, the firm went through three CEOs in five years, trying to get the formula right. When TPG decided to hire Drexler, six months after his ouster from Gap, J. Crew was hawking cheaper goods in an effort to become a mass-market outfitter. "I believe that temporary career setbacks can make CEOs even stronger and better," says TPG founding partner James Coulter, who recruited Drexler for the job. Three years later the company went public, with Drexler getting an 11% stake (he currently owns 15%).
J. Crew is not Drexler's revenge, however. It is more his magnum opus, the sum of everything he has learned about retail - first as a boy working weekends for his dad, Charles, a button and piece-goods buyer in New York's Garment District, then as a young buyer for Bloomingdale's and Macy's. The lessons from those giants were mostly cautionary tales about managers who got too far removed from the sales floor and lost their touch. Maybe because of all that he's experienced, Drexler sees the stagnant economy as not only a trial but also as an opportunity, a chance to steal business from department stores and brand-name designers.
His logic is straightforward: Why can't an American retailer use the same Italian mills and fabric makers as European designers but then deliver a more affordable alternative to goods sold at department stores and boutiques?
"Designer goods have become much too available, either through their own distribution or through logo counterfeiting. I see the world moving away from carrying a bag around with the designer's initials or designer's logo," says Drexler. "The more you see of anything, the less special it becomes. It's kind of like the first slice of pizza vs. the sixth. The first you're like, 'God, this is amazing!' The sixth you're like, 'Enough already.' So I think there's an opportunity for us to deliver stylish, quality goods like a woman's blazer for $350, compared with a designer one for $2,500."
The two aspects of corporate culture that strike most visitors to J. Crew's headquarters are the open plan and the public-address system. "Hi, everyone, it's Mickey. I'm at Koi, waiting to meet my son for lunch, and I'm seeing a woman wearing our Florentine-print dress," echoes Drexler's voice over speakers spread throughout two floors of cubicles. His assistant has patched him in from an Asian restaurant in Midtown Manhattan. "Her friend just asked her where she got it. She said, 'J. Crew.' It's going to be a great lunch!"
Drexler calls these stream-of-consciousness shout-outs his "radio show." He believes it keeps everyone in the loop and makes management accessible. He wants the company to feel small and familial, in part because he believes the next monster hit can come from any employee at any level.
A notable case occurred not long after he started, when he was chatting with one of the phone operators at the company's call-in center in Lynchburg, Va. She told Drexler that women were ordering a popular beach dress five at a time in different sizes. She surmised the customers were brides looking for an affordable bridesmaids' dress. Weeks later, J. Crew was in the weddings-and-parties business. The Web site now offers 21 varieties of bridesmaids' dress, from $165 to $550.
Despite this informal vibe, Drexler really wants his team to pay attention to the small stuff. "Retail is detail" is a favorite Drexlerism. No detail is too small - be it the buttonholes on a man's suit jacket (see "Anatomy of a Suit") or the pastries set out for the interns at J. Crew last summer. When Drexler saw tired-looking Danish and found out the spread cost $150, he summoned his senior executives over the public-address system to defend what he viewed as a terrible introduction to retail for the interns. The next day they had fresh fruit for half the cost.