J.Crew's Amazon deal in doubt as Mercantile clothing line discontinued: Report
J.Crew plans to discontinue the budget clothing line that serves as the centerpiece of its retail partnership with Amazon as it looks to address a sales slump, according to a report Thursday.
The clothing line, Mercantile, will be phased out through next spring and summer, according to an internal J.Crew memo obtained by the Wall Street Journal. The memo said the decision will allow greater focus on efforts to prop up J.Crew’s outlet business, which consists of 175 stores.
“We believe that a ‘good’ price tier opportunity is better served by the J.Crew label,” the memo says, according to the Journal.
The brand is shuttering just months after Amazon began selling Mercantile products on its platform. The e-commerce giant said last September that all Mercantile products were available for less than $300.
Former J.Crew CEO James Brett was a major proponent of the deal and had supported an expansion of the Mercantile brand. Brett, who was tasked with leading J.Crew’s turnaround amid overall weakness among traditional retailers, exited the company earlier this month amid a spat with the board of directors related to his turnaround plans.
J.Crew and Amazon did not immediately respond to requests for further comment.
Earlier this week, J.Crew reported that its revenue increased 10 percent to $622.2 million in its most recent quarter, while same-store sales rose 4 percent. The company also reported a net loss of $5.7 million.