Can Madewell Survive the Downturn?


Now is a hard time for, well, almost everyone trying to sell things to wear, but specialty-chain spinoffs especially — stores like Abercrombie's Ruehl and American Eagle's Martin + Osa. After painful losses, Abercrombie is shutting Ruehl down completely, and some financial analysts are waiting for Martin + Osa to close down, too. Despite a loyal following, J.Crew's Madewell may also be on the rocks. The chain lost $11 million last year, and J.Crew's chief executive has admitted Madewell's merchandise was too basic and expensive. Jeans used to start at $98, which freaked out potential customers, us included. Now, jeans start at $59.50. "So frankly, in hindsight, a mistake," he told investors yesterday. "The world is kind of changed dramatically in that regard." Yes! Stores can't get away with overcharging as easily. Which begs the question: How is Diesel still standing?

An Ugly Time for Fashion as Spinoff Chains Struggle [WP]