J.Crew's Mickey Drexler Talks On Retailers' Comeback

There is an article (with video) over at CNBC (click here) where J.Crew's CEO, Mickey Drexler, discusses the current state of the retail industry.

J.Crew CEO: Retailers Have Come Back, Not Consumers
By Christina Cheddar Berk
April 8, 2010

A record jump in monthly retail sales has some cheering the comeback of the consumer, but J.Crew CEO Millard "Mickey" Drexler isn't impressed. "I don't talk about the comeback of the consumer," Drexler told CNBC in an interview. "...I talk about the comeback of great retailers, or of good retailers."

According to Thomson Reuters, retail same-store sales rose 9.1 percent in March, the biggest gain since the company began tracking those numbers in 2000.

Drexler said he doesn't think last month's sales are as good as they first appear. He explained that March 2009 was "the easiest month in the history of the retail world" to compete against, as sales were depressed last year by the "tsunami recession." The timing of Easter, which occurred a week earlier this year than last, also helped bolster results. "We look at 20 retail companies in our industry, and there is just a handful that are ahead on a two-year basis," Drexler said.

Like a growing number of retailers, Drexler's company doesn't report monthly same-store sales. However, under Drexler's leadership, J.Crew [JCG 46.75 -0.10 (-0.21%) ] has improved its performance. Last month, the retailer swung into the black in its fiscal fourth quarter and posted full-year earnings that surpassed pre-recession levels.

Drexler said the key to J. Crew's success has been to sell items that "cannot be sold anyplace else." According to Drexler, retail sales are improving not because the consumer is coming back, but because those retailers are taking market share from others.

"The consumer either shops value, or they shop emotionally, or it's both," he said. He also thinks the Internet has made competition more fierce because consumers research prices and know a product's true value.

I couldn't agree more with the last line. Thanks to blogs (like those listed on the JCA Blog Roll Call) and product reviews on company e-commerce sites (like Anthropologie), I always do a bit of research before any purchase online.

Also, I laughed a bit at the line that "the consumer either shops value, or they shop emotionally, or it's both". Doesn't that cover about everyone? ;)

What are your thoughts on the article & video? Disagree or agree with any of the points mentioned? Do you think customers shop either on value, emotionally, or both? :)