'Shoppers will buy even more in the U.S. because it's cheaper!' J Crew CEO Mickey Drexler's bizarre defense of chain's sky-high UK pricing
J Crew CEO Mickey Drexler has brushed off criticism that the retailer's pricing in the UK is more than double that of the U.S.
In an interview with Bloomberg Businessweek, he said that price discrepancies have always varied from country to country.
'It's always been that way,' he said, adding that it presents an advantage for his stores in the U.S.
Expensive: J Crew faced a storm of criticism earlier this month when shoppers at the three new London stores discovered that prices are up to three times higher than in the U.S.
'Opening international stores enormously helps your domestic
business,' he explained. 'Because then customers will buy even more when they come to
America, because it’s cheaper.'
Mr Drexler faced a storm of criticism earlier this month when shoppers at J Crew's three new London stores discovered that prices are up to three times higher than in the U.S.
Almost all the clothes and accessories in the new Regent Street store are on sale for the same amount of pounds as dollars, meaning a $350 (£219) black blazer is retailing at £350 – an increase of 60 per cent.
The J Crew: Mr Drexler pictured with Jenna Lyons, the store's Creative Director and President
But some are being sold at a far greater mark-up, including a silk shirtdress which is on the U.S. website at a special price of $99.99 (£63) before tax, but in the London shop for more than three times as much at £198.
The U.S. prices do not include tax, which varies by state, but it is usually between 5 and 10 per cent of the sale price.
Some prices in the Regent Street store at its launch were even higher than on J Crew’s UK website. A dress from the shop’s Collection range was £450 in store but £375 online – or $375 (£234) from the U.S. site.
But the company defended the prices,
saying they reflected the 'materials and craftsmanship involved' and the
levels of taxes, duties and operational charges.
A spokesman said: 'It is an inescapable fact that these costs in the UK are significantly higher than in the US. There are not many products that don’t vary in price from country to country. It is simply a fact of life.'
But Mr Drexler insists that the wares on offer still present good value for money for British consumers.
Of a pair of £375 ankle boots being purchased by a middle-aged woman in the London flagship, he said: 'They’re made in Italy, and designed by us. We take it from our costs directly, so there isn’t a double mark-up. These would be twice as much at a department store.'
London calling: Bloomberg Businessweek Photoshopped J Crew outfits onto the Duke and Duchess of Cambridge for its cover story on the store's UK launch
The BusinessWeek feature also saw J Crew's Creative Director and President, Jenna Lyons, open up about the challenges the company had faced in coming to the UK.
'Everything’s different over there, from the labeling to compliance to legal issues,' she said. 'Stuff you wouldn’t think of. The lighting wattage you’re allowed in London is lower, which we didn’t know, and so we spent the night before the opening changing all the light bulbs.'
Finding the right team was also an issue too, and J Crew was forced to bring sales staff from the U.S. to train its UK employees.
When someone’s in the dressing room saying, "This isn’t really working," where we excel is having the salesperson say, "We have these three other things, or this option online,"' Ms Lyons explained.
And the pressure is on for the store to succeed. J Crew follows a number of U.S. brands to expand into the UK, and not all have been received warmly.
Abercrombie & Fitch, for example, which opened on London's Savile Row in 2007, has famously struggled, however Victoria's Secret and Banana Republic are thriving in the City.
As far as J Crew is concerned though, hopes are high.
'The U.K. really connects well with America,' said Libby Wadle, J Crew's head of merchandising and buying. But, she added, 'we're not out to become a mass brand - and so we’re putting a lot of pressure on the stores we are doing to succeed.'
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