J.Crew continues to lean on athleisure as it rebuilds its brand

J.Crew is expanding its athleisure efforts to men’s apparel, as part of the company’s ongoing attempt to revitalize the struggling brand.

J.Crew, which owns both J.Crew and Madewell, announced its foray into activewear in October last year, when it partnered with New Balance on a line of athletic apparel for women. Now the company has expanded to the men’s side with a workout collection focused on technical fabrics and vibrant colors, pointing to the brand’s continued focus on diversifying apparel to attract new consumers amid sliding sales.

In its third quarter report, just weeks after killing its bridal division, J.Crew reported that sales had fallen 7 percent to $488 million — a drop of 9 percent in comparable sales after the brand experienced a 12 percent dip in the third quarter of 2015. In total, J.Crew has reported slumps in comparable sales in 10 of the last 11 quarters, and is an estimated $2 billion in debt. Meanwhile, the Madewell brand has continued to thrive, with sales increasing by 12 percent in the third quarter and comparable sales increasing by 4 percent. (J.Crew has not yet released fourth quarter earnings.)

The move to invest in activewear and athleisure (the New Balance collab has been called both) came as a surprise to those in the industry who follow J.Crew CEO Mickey Drexler — he decried activewear in 2014, telling Racked “We don’t have the expertise to do that.” Likewise, creative director Jenna Lyons had previously stated that J.Crew had no plans to dabble in athleisure. “I just don’t think it is the right thing for us to do, but it is out there. I think it is super-important, [but] we’re not planning on taking over the active world,” Lyons told The Cut in 2014.

According to Katie Smith, a senior analyst at Edited, the challenge for J.Crew is that work wardrobes have transformed dramatically over the past five years. “Look around many workplaces today, and you’re more likely to see a pair of leggings than a herringbone jacket with sparkly earrings,” she said. “J.Crew was a little stubborn on changing with that shift, so it’s great to see their New Balance relationship extend into menswear.”

Smith said that given the success of the women’s collection with New Balance — 31 percent of the collection has been replenished and with low levels of discounting — she anticipates the men’s line will also perform well. New Balance is currently the sixth most-stocked sportswear brand in the U.S. and carries significant brand awareness. However, in order to have longevity, she cautioned that J.Crew will need to remember its core consumer demographic, and play to their preferences through colors and styles that fit the brand identify.

She also noted that while prices may seem comparatively reasonable to other J.Crew offerings, $100 compression tights are still significantly higher in price that the market average of $50, offered by brands like Nike and Under Armour. (The collection’s prices start at $55 and top out at $200.)

“Activewear is a big market,” she said. “There are still opportunities, but J.Crew is a little late to the game.”

Rachel Saunders, director of insights and strategy at the agency Cassandra, said she anticipates offering men’s styles will help boost sales, as men typically spend more in the activewear category. According to a study conducted by Cassandra, 64 percent of millennial men said they can justify spending more money on athleisure given the fact that it’s multifunctional, compared to just 49 percent of women.

What’s more, “both sexes like athleisure from a style standpoint,” Saunders said. “So it’s a shrewd move by J. Crew, as long as the style and quality are there.”

Kaitlin Barnett, who has shared several posts on her blog and social media accounts using the hashtag #ReviveJCrew, has been a vocal advocate of the brand veering away from ill-fitting, overpriced pieces. She said she was a proponent of the brand’s push into athleisure last year, and found the pieces to be more accessible in both design and price point than some of its latest garments.

“It shows that they’re diversifying what they’re putting out there, but not in a way where we’re constantly buying high fashion, compared to their collaborations in the past,” she said. “It’s different going into J.Crew and seeing a $50 workout shirt, rather than a $500 leather skirt.”

Barnett said that she has been equally impressed by efforts like J.Crew’s New York Fashion Week show that depicted a diverse array of non-models wearing the company’s latest designs.

“Even with athleisure, the pieces they are putting out are moving more toward a direction where they’re listening to their consumer,” she said. “And they seem to be headed in the right direction, design-wise.”

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