J.Crew Factory Rebrands as J.Crew Mercantile in Old Navy-Style Move


J.Crew Mercantile announcement Factory rebranding

Soon, you’ll be able to buy your office-ready summer cardigans at a price that doesn’t make you want to cry. (Well, maybe). J.Crew has just announced the launch of a new, lower cost retail chain in J. Crew Mercantile.

Rumors of a budget line began over a year ago in May of 2014, when the popular retailer first trademarked the name. At the time CEO Mickey Drexler commented, “Mercantile is a name we own. There’s not much beyond that. It’s a name that was available and we liked…It doesn’t require any work to register a name… Most of the time, things don’t come out of it. We are always focusing on our existing businesses.”

J.Crew Mercantile trademark

But on Friday, the company finally confirmed this “new initiative” bringing its lower-priced J.Crew Factory collection for women, men and kids from the web to a standalone store via Mercantile, saying “J. Crew Mercantile stores will make the (Factory) collection even more accessible to customers.” Following the statement, an “about J.Crew Mercantile” section appeared on the J.Crew Factory website, similarly introducing the new brand as a new way to love J. Crew:

“J.Crew Mercantile is a brand-new way to shop the J.Crew style you love with new deals every day. Featuring a collection of original styles once only found at J.Crew Factory stores, J.Crew Mercantile is even more of everything you love about J.Crew, in convenient locations near you.”

In fact, J.Crew Factory’s website is now billed as the online home of J.Crew Mercantile, showing that J.Crew Factory is being rebranded as J.Crew Mercantile online and offline. As BuzzFeed has noted, the quality of the Factory line’s material, tailoring and styling may be inferior to J.Crew proper, but it’s still stylish and fun, much as Kate Spade Saturday (RIP) was to its namesake big sister.

J.Crew Factory Mercantile

The move makes financial and branding sense. J.Crew has had a laundry list of problems lately—sales steadily down for consecutive quarters, continuous complaints about design quality and layoffs announced last month that included the head women’s designer and, after the fact, a VP who embarrassed his bosses.

The brand’s preppy cult following is waning. In fact, they simply aren’t showing up. Young, professional women, a key demographic for the brand, aren’t exactly jumping at the chance to purchased dull, ill-fitting duds (as many complains suggest the most recent clothing lines have been). Particularly not at the higher prices the store has been offering.

The brand was once loved as one of classic basics and consistency, and customers are no longer finding that to be true. According to Bloomberg, Drexler admitted the company had “meddled too much with its classic styles and offered unappealing silhouettes and fits.” This past year a ballet flat was the center of upset, after the beloved shoe was altered, while a “missing cardigan” was blamed for financial failings.

The brand’s woes were only made worse by so many accessible alternatives, including J.Crew’s younger and hipper spin-off, the increasingly popular Madewell.

J.Crew Mercantile definition

With the rebranding of J.Crew Factory to Mercantile—dubbed the Old Navy to J.Crew’s Gap, it even has the old-timey, seafaring ring to it—J.Crew aims to hit on a particular pain point with the brand’s once enthusiastic and loyal customer base: price. Discount shopping isn’t exactly new to J.Crew, as the retailer already has nearing 200 Factory outlets selling discounted items.

Rather than position its factory outlets as a place to find out-of-season and overstocked items at a discount, it’s rebranding the Factory line as a retail destination in its own right with Mercantile. As customers demand better value and shirk the increasingly luxury and designer bent of its flagship brand, J.Crew finally seems prepared to step into the retail fray by offering an alternative that doesn’t feel as downmarket as an outlet store.

According to J.Crew’s website, the first Mercantile store will open this month at The Shops at Park Lane in Dallas, TX, one of up to 10 new Mercantile stores planned this year. “The main difference is the locations will be outside typical outlet centers” and located within regular malls, a J.Crew spokesperson tells BuzzFeed about where the new stores will be located.

“Some of our customers also shop at J.Crew, but buy at the outlets a few times a year to stock up on their favorites,” J.Crew’s internal memo reportedly informed staffers. “For many of our customers, J.Crew Mercantile or Factory is ‘their’ J.Crew, both in our stores and on our web site. They appreciate the sharp price points for classic J.Crew styling, and feel they are getting a great value.”

We’ll have to wait and see if a once loyal customer base will be back to join the Crew.

Melissa Jarrett is a Verbal Identity consultant for Interbrand New York.