Transcript

Rapid Response: Inside J.Crew's purposeful pivot, with CEO Libby Wadle

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You never would wish for it to happen, but there's something about actually having The stores closed, literally. Damn. Reinforces the meaning of that channel and why you need that physical part of the business. We have an amazing community at Maidwell who loves to tell us what they think. And what we've learned in those chats are that resale and circularity and sustainability in general are increasingly important to our community. We have to

reignite the energy and the fire and the love that people have with the J. Crew brand. I don't want people to be neutral about the brand. I want the passion to be back with the brand and we will be at our best. when people are are advocates and are passionate about the J Crew brand and I do believe that really leading with creativity and design will get us back there. That's Libby Wadel, CEO of J Crew Group, parent company for the iconic but struggling J Crew brand, as well as the more vibrant Maidwell. Just this week, Madewell announced a new platform, Madewell Forever, dedicated to reselling previously used Madewell goods. I'm Bob Sapphian, former editor of Fast Company, founder of the Flux Group, and host of Masters of Scale Rapid Response.

I wanted to talk to Libby because as the marketplace for apparel dramatically shifts, she's made a dynamic bet on sustainability to differentiate the company. Libby took over J Crew Group in late 2020, not long after the company emerged from Chapter 11 bankruptcy. But she's hardly a newcomer. She was president of the J. Crew brand when the business was at its peak, and more recently has been running Madewell, putting in place a playbook for a purpose led business that she's now rolling out. Libya is taking entrepreneurial risks in quest of tapping the kind of heat and energy that define J. Crew in its heyday. A legacy brand doesn't have to mean old and not modern, she says. With the right creativity and strategic discipline, there's plenty of opportunity to get excited about.

I'm Bob Safian and I'm here with Libby Waidel. CEO of J Crew. Livy is talking to us from the J. Crew headquarters in downtown Manhattan. Livy, thanks for joining us. Thanks, Bob. Great to be here. So delighted to have you. J. Crew and the whole retail fashion apparel industry is in a fascinating moment. You were named J. Crew's CEO less than a year ago. A very busy time, but you've been with the company for much longer.

unique perspective. I'm eager to dig into all of that. But first, I have to ask you about this week's news. You announced a new platform for the Madewell brand, which you ran as CEO before taking over J Crew. Madewell forever, a resale platform. Can you explain that for our listeners? Sure. So Maidwell is part of our J Crew group here, and I did run that business for a few years before taking on this new role for the whole group. And we are very excited that we just launched this. Made well forever site, which is our resale platform, and it's focused really in increasing the life of our jeans. Many years ago now we started a program called Blue Jeans Go Green, and that's a recycling program for genes. We can bring any gene in, and we will recycle those genes and turn them into housing insulation.

And housing insulation goes to great, great organizations, organizations like Habitat for Humanity and that kind of thing. So that was really our first foray into circularity and denim. And to date, we've recycled over a million pairs jeans. And so this next step really. is a way to expand the effort of circularity, broaden our audience, and really get into the resale business because we know that our customer she loves made well, but we know that she also really loves to shop. Resell. And when we talk to her and we talk to her quite a bit, we get that answer over and over again. And so we know that we could probably expand the I like to say number of butts and jeans by getting into the retail resale business, but also really making a difference and leading the way. Apparel is not the cleanest business in the world. And so the more you can do to make the life of the jeans and the apparel longer, the better off.

We all are. And when you say that she's interested in buying resale or used jeans Is this a new phenomenon? Like how new is this and how Did you become aware of it? Yeah, so we have an amazing community at Maidwell who loves to tell us what they think.

We tap into that. We have a program. It's really a sort of a crowd sourcing. program. It's called Madewell Group Chat. It's got Around

five thousand volunteers who we tap into for all sorts of topics about what she's loving, what she cares about in the world, where else she shops, or what she would like to see from us, how our fits are, and what we've learned in those chats are that resale and circularity and sustainability in general are increasingly important to our community at Madewell. You ask people who is the competition, and you're often gonna hear I like to thrift as well as shop at Madewell and sort of mix and match vintage with my Madewell denim. A few years ago, we launched some resale shops in partnership with Thread Up, and we've had great success there with recycled. Made well denim or jeans sold in those in person shops, and that was sort of our very initial dipping our toe in the water on this business.

And so here we are today. with a much bigger platform and we're partnering with Thread Up actually who is powering our site. 'Cause they know this business, I think, better than anyone. Yeah, I was gonna ask, it's a different kind of business to do resale than to do what Maidwell and J Crew have done historically. So you're relying on your partnership with ThreadUp to provide that expertise. We absolutely are. They're great partners.

We've learned a lot from them. We know that. Made well is one of the most popular brands sold and resold on Fred Up and so it seemed like a really amazing connection to sort of build this together. They wanted to get into resale as a service. from a platform and expanding their business, and we were really up for being the first to do it with them. So it's been a really fun partnership. Yeah, one of your colleagues said that you guys are the guinea pigs in this new business model collaboration.

Oh, I love being a guinea pig. It's good. I mean, especially in sustainability. I welcome anyone to join this because it's really great when people can really pioneer and pave the way and more people can join in. There's another program that we do. We were the first denim brand to partner with Fair Trade and certify factories to produce Fair Trade denim. And very quickly people followed us, which we think is fantastic because It's just you make a bigger impact that way. So feel the same way around resale for sure.

So Sustainability was not necessarily sort of a central aspect of J Crew historically or even made well. at the outset, unlike maybe some other newer direct to consumer brands. When and how did this start for you? Was it

A personal interest? Was it sort of a business opportunity, some combination of the two of them? I think it was a little bit of a combination of the two of them. I I'll tell you that I've never felt more inspired and excited and invigorated by my job as I have been in the past, I'd say, four or five years, as we've been building purpose along with business. It's added this whole dimension that is so much more meaningful. I can really feel proud of tell my daughter stories about my visit to the Fair Trade factory in Vietnam and what it meant to the communities there and What they were choosing to spend their fair trade fees on versus

what the best selling gene was. Which is great as well. I love that part of the business as well. But I think for all of us who have been on this journey here at J Crew Group and in Madewell, we've always had A real sort of startup mentality and an entrepreneurial mentality with everything that we do. You mentioned the story you told your daughter in the visit to the Fair Trade factory in Vietnam. Can you tell us that story? What is that story? Well, I mean, I went to Vietnam I'd say now, I always have to subtract the year of Covid out, probably about three or four years ago. Maybe four. And we visited with our partners at Cytex, and they were our first factory, in fact. And they're one of our most important denim partners. And they agreed to join on this journey with us on Fair Trade. And what you do with Fair Trade is basically they have a committee that is formed made up of the workers. So it's not management.

So it's the workers and the workers sort of elect who is going to speak for them and be part of the committee to decide how they want to spend the fair trade premiums to sort of better the lives in their own community. So some people spend it on building daycares, some people spend it on financial advice services. Some people grow organic gardens and there's a lot of way that depending on the situations and what is most important to them. So I wanted to go and hear what they were thinking about. They hadn't decided yet. And they presented to us thoughts, the things that they were determining, and I got to hear that and speak to the factory workers directly about why these things were meaningful to them. And I also told Sylvie just about this amazing organic garden that they were growing on site at the factory, and they were very proudly showing me all of that. I planted a tree for them, and I just really got to spend time with them in a way that having been in the apparel industry for so long was very different than. frankly, walking into a factory, like seeing the factory floor, and then going into a room and meeting with factory management.

And the perspective was very different from how you show up normally as a retailer. It puts so much more humanity into what you're doing, which was The most exciting part for me. When you've built substantial wealth through your business, it's often tied up in a single equity position.

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I hope to see you there. So April of last year, in the heat of the pandemic, Maidwell announced a Sustainability commitment. Was that timing was that related to what was going on in the pandemic, or is that just a separate business ongoing business decision? I mean, definitely ongoing because those kind of commitments We spent a while really developing

what our targets and commitments should be. And so that do well report is what came out in October of last year was really a culmination of. all of the work we had been doing and we wanted to feel really confident about being able to hit those targets and then some, frankly. So did not come out of the pandemic. It made though that work so much more important. I think everyone's just become So much more aware about wellness, not only of taking care of themselves, but what's happening in the world and the planet.

And already people cared a lot, especially our customer at Madewell, about the companies where they choose to shop and whether their values align. That is even more important than ever for us that we really connect that way. And so yeah, that was very much In progress before twenty twenty hit. So for Maywell, for J Crew You mentioned apparel and I think of them as retail brands or sometimes fashion brands.

What's the difference between an apparel brand or a retail brand or a fashion brand? We are brands, and that's how we think of ourselves. And because of that, we think of ourselves sort of beyond the day in, day out of selling jeans, which is important. It's so great to get a great fitting pair of jeans. But at the end of the day, we're really building a brand that has a lasting impact and impression and has an energy about it that you hear the name and you have a memory or a thought that is exciting. So with Madewell, it's having that impact beyond sort of shopping experience and having that deeper connection with her as a customer or him as a customer as part of our community. And we're really doing that as well at J Crew.

The design part of the apparel business can seem very capricious. There was a point where the J Crew brand was super hot and then it cooled. I know you've been with J. Crew through Ups and downs through a lot of things. How do you think about what the evolution of the brand has been? What the evolution of the business has been? Being a legacy brand can be good, it can be bad. How do you think about those things?

You know what I think about when someone says we're a legacy brand at J. Crew, I think А злом измі да щонмі. Old. Or not modern. So when I think about when J crew was hot. And I believe it's about sort of the it's the same kind of frankly energy that we're feeling today when we put creativity and product at the forefront of things. And

what we're feeling right now in general in the world in our business is that people are excited to get dressed again. And I think both J Crew and Maidwell play a really important role in being brands that can do that. Now you talked about the conversations you have with your customer with her and him sometimes. And I guess some of that must give you sort of data and feedback about the product portfolio and how it moves, but there's also, as you allude to, the creativity part of it and the art. And so how do you mesh that art and that science? To keep the brand moving forward. Yeah, well, you can have analysis, paralysis on the data, and you can also have it on too many anecdotal stories, right? And I think there's still an element of allowing your sort of great design team and great creative team to give you the courage to move forward. So you can give your customer confidence that

You are ultimately the curator and the great editor of their closet, and there's definitely some places that we should be pushing forward. But there's also some places where a classic is a classic and we encourage people to continue to Especially in the spirit of sustainability. It's shop from their closet. So we're not necessarily about sort of fashion for fashion's sake. We don't sort of go overboard on which color do you like pink or red. And storytelling for our brands are very important. And that has to come from design and creative. And then the customer. Needs to tell us like how things are fitting. Are they liking how the fabric feels? I'll tell you, we've developed our stores in Madewell where the Fitting rooms are built in almost all of the stores on the selling floor, and they're really sort of adjacent to or across from the denim bar. So they're intentionally to create that dialogue and conversation.

So whether you're shopping with your friend or your friend couldn't be there with you or your mom couldn't be there, but you have the denim stylist who is there to help create that conversation and have that conversation with you. And that is by far the most valuable feedback that we get in terms of improving our gene. So She might not tell us that, oh, I'm definitely gonna want to wear a balloon jean next year. That's fine, that's for us to tell her. But she's gonna tell us how is that. comfort stretch working for the fit. So it's definitely a balance of both. As you're talking about. the stores and the experience that happens at the denim bar, a lot of people are buying things online in a way that they didn't. And so how do you think about where

The mix of that part of your businesses. Yeah. I'll say that you never would wish for it to happen, but there's something about actually having The stores closed literally. That Ріінфорзи the meaning of that channel and why you need that physical part of the business. It's not like the conversation wasn't being had before going into the pandemic, right? About how important are stores, what's happening to the retail environment, how many stores are you going to have. And I think the beautiful thing about

Made well is we have a good amount of sores. We don't have a ton, we're not overstorred. It's a complimentary experience and If anything, Covid has really reinforced that. complement of stores to your online experience. So people get it, customers get it. They really want that human connection. And if anything

Covid has just made that, I think, more apparent to us. And so if Two years ago. We would have talked about what the mix of what you're selling online versus in store is. And we're having that conversation now. Is that mix

change dramatically? You sort of think, nah, that trajectory's kind of the same as what we thought it was gonna be two years ago. Well listen, everything's accelerated, right? So obviously online usage and everyone's e commerce business has increased Substantially more than they thought it would have. So two years ago. We assorted the store thinking that. Maybe you didn't have to have your best of there. That it could be sort of where your classics could be, your stock ups.

that you could run in and out to pick up. And I think what's shifted is the convenience is now really happening online, and that's your channel of convenience. Арчана овсперє. And really experiencing that. Brand in the best possible way is happening in the store. It's no secret that our Maybell stores in general are 3,000 feet. They're not that big.

So you can't have everything at these stores. And I think we really want to show up with our best foot forward and with her best edit and the best curation. And of course, we want to have the items that she needs to have no matter when or where and she wants to run and pick up. But I think what shifted really is. That the stores need to be the best of. And that the channel of convenience has really become The online channel.

As a leader in this time, communication with the team has become even more important and more highlighted, particularly when a lot of people have been working remote. Famously, uh the former CEO at J Crew, Mickey Drexel, used to pipe his voice across the office, like the voice of God. What's your strategy? How do you get your voice across to the team, especially in this time? Yeah, we have no more loudspeaker. I did not disconnect the loudspeaker, but it does not exist anymore. But what that loudspeaker meant and what that means to me is when I try to do it now and I come into the office, I'm in the office today, I walk around and I talk to everyone. And I think again, that connection, like I said before, the humanity and It's really important in the Zoom culture.

to take a moment at the beginning of these calls to actually catch, I think. And so we do a little bit of that as well. It's certainly challenging, for sure. I think though, again, what came out of COVID is we all got a little bit more Casual, and so people saw My dog jump across the back of my couch, my kid having a meltdown in the background, you know, whatever it is, but I think there's automatically this sort of like veil that was lifted for many of us. And we all sort of have lives that we had to juggle. And so definitely I think just going through all of this together has actually helped a lot in terms of the way I like to lead, which is

in a way that's pretty transparent and connected to my team. And again, like I said in a very kind of collaborative way. You've been at J Crew in a variety of roles. For a number of years. What's at stake for J Crew in this moment? I think that we have to reignite the energy and the fire.

And the love that people have with the J. Crew brand. That is our job. That's what we need to do. That's our mandate. And I think that it's there. A lot of people know J. Crew. We don't have an issue right now with brand awareness in as much as I don't want people to be neutral about the brand. I want the passion to be back with the brand. We will be at our best. When people are are advocates and are passionate about the J. Crew brand. And I do believe that really leading with

Creativity. and design will get us back there. And so I'm really hopeful. I think in a much more hopeful, optimistic way, versus what's at stake. When I think about our opportunity at J Crew.

I think that The resell platform that we've built with Thread up is really the start of something that could be even bigger. I think that like we do a lot at Madewell, we like to sort of test and learn and try some things, and I think

is this a good foray into a much bigger Opportunity. So I picture other categories and other ways of playing in the resale world. So I'm excited about sort of paving the way for Maidwell and J Crew to participate in a more important way in the resale business. Great. Well, Libby, thank you so much for doing this. Really appreciate it. Well really, really good to meet you, hopefully in person one day.

Absolutely. Absolutely. It'd be great. Masters of Scale Rapid Response is a wait what original. The show is recorded remotely using sanitized audio gear. I'm your rapid response host, Bob Safi and host for Masters of Scale is Reed Hoffman. Our executive producers are June Cohen and Darren Triff.

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