J. Crew CEO: U.S. retailing lacks inspiration
Veteran tells conference of retailers that industry currently 'doesn't inspire customers.'
NEW YORK (CNNMoney.com) -- Veteran retailer Millard (Micky) Drexler, currently CEO of J. Crew, delivered a very blunt message to his peers Tuesday: "I have a few issues about where our business is going. American fashion is not doing what we need to do. Our industry doesn't inspire customers today."
That wasn't his only complaint.
"Retailers are not thinking creatively. They're not going with what's in the gut," Drexler was speaking Tuesday at the National Retail Federation conference in New York, where he was awarded the gold medal to honor his contributions to retailing.
Indeed, Drexler knows a thing or two about successful retailing since he is widely credited with transforming more than one retail company.
During his 18-year tenure at Gap Inc., (Charts) he grew the apparel chain from a $400 million a year company to a $14 billion industry leader and launched three new brands, namely Old Navy, Baby Gap and Gap kids.
In his present role as chairman and CEO of J. Crew (Charts), Drexler revitalized the brand, launched two new formats under the J. Crew umbrella as well as executed a highly successful IPO.
So what is his magic formula? It's simple, Drexler told the gathering. "I was thinking about my career. I was a little bit of a maverick. I spent most of my time early on doing the most important thing - dealing with the customer. What they like and don't like," he said. "What I learned then was that consumers will buy everything that looks good. And it's still that way."
He dismissed the notion that the popularity of "fast fashion," or the type of low-priced, trendy merchandise sold at chains like H&M, has shrunk demand for high-priced, high-quality clothing. J. Crew sells mid-to high-end clothing and accessories.
"At the end of the day, there are enough customers buying high-quality products. But it's our job as merchandisers to create the needs and wants of customers," Drexler said. "That's what I do for a living."
To his point, sales at J. Crew stores open at least a year -a key retail metric known as same-store sales - rose 16 percent in the first nine months of 2006 whereas same-store sales at Gap suffered monthly declines over the same period.
Successful companies, he said, continuously innovate. "That's why I'm honored to be on the board of Apple. Just remember, what doesn't kill you makes you stronger."
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