Somsack Sikhounmuong, after taking on the top creative job at J. Crew in April as Executive Creative Director Jenna Lyons prepared to leave, is now also departing, the company told Retail Dive on Friday. “Chief Design Officer Somsack Sikhounmuong has decided to leave J.Crew to take some time off and pursue other opportunities,” a J. Crew spokesperson told Retail Dive in an email.
His current responsibilities, which include the oversight of all product design and development, will be transitioned to other members of the retailer’s “very seasoned and talented design team currently in place,” the spokesperson said.
J. Crew has gone through a few shakeups in recent years, culminating this summer in the departure of not just Lyons but also CEO Mickey Drexler as it continued to struggle with falling sales and a massive debt load. The company increasingly resembles a sinking vessel, despite efforts to vanquish some of its massive liabilities via debt swap this summer. It’s likely been too little too late — debt remains a problem and the brand continues to lose valuable talent.
The company’s bright spot remains Madewell — the brand that Sikhounmuong left to join J. Crew. Even with the performance of that brand, however, executives told analysts last month that it’s exploring “strategic opportunities.” Madewell and opportunity may be one and the same for the company, according to Howard Davidowitz, chairman of New York City-based retail consulting and investment banking firm Davidowitz & Associates.
“I don’t know this, I’m purely speculating — but what could be a ‘strategic opportunity’ is doing something with Madewell,” Davidowitz said. “I don’t know if that could be done, but if everyone could agree on it, I think Madewell looks to be a very valuable asset that is increasing in value. The rest of the company doesn’t appear viable given their debt, given their sales trends, given their cash burn and given their losses.”
Last month, J. Crew reported that Q2 total revenues fell 2% to $560.9 million as same-store sales fell 5%, following a decrease of 8% in the second quarter last year. The company’s net loss in the quarter widened to $20.7 million compared to $8.6 million in the year-ago period and operating income tumbled to $2.6 million compared to $6.7 million last year. By brand, J.Crew sales fell 7% to $443.1 million and same-store sales fell 8% following a decrease of 9% in the second quarter last year; Madewell sales rose 19% to $93.1 million and same-store sales rose 11% following an increase of 3% in the second quarter last year.
This summer the company completed a debt maneuver that entailed an exchange offer and refinancing, which extended the maturity of some loans and reduced the company’s debt by $300 million. But that simply won’t be enough for the beleaguered retailer, Davidowitz said.
“Facts are nasty things and here are the facts,” he told Retail Dive last month. “Sales are down again, losses are up. Comparable sales fell 5%, which, given the number of closed stores, 5% looks pretty bad. $300 million gets them nowhere.”
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