CLOSURES: J. Jill bids Nicole farewell

Women’s apparel cataloger The J. Jill Group (formerly DM Management) announced it will fold its secondary title, Nicole, in response to what president/CEO Gordon Cooke calls “a bump in the road.”

“Given our growth from $18 million to more than $220 million in just three years, we finally hit a wall,” Cooke says. At press time, The J. Jill Group expected third-quarter sales of $46 million and a loss of $0.11 per share before one-time restructuring charges. Last year it posted third-quarter net income of $0.14 per share on sales of $20.3 million. But Cooke says the company is still profitable overall.

Last year the Nicole catalog – then titled Nicole Summers – accounted for $164 million of the company’s $219 million in revenue. That wasn’t enough for the company, however, and this spring it repositioned the title, which had sold careerwear and dressy apparel, to attract younger buyers.

While the company says it was pleased with the creative and the merchandising of the repositioned Nicole, results from the catalog’s more than 231,000 12-month buyers were disappointing. “Nicole was not contributing to the bottom line in the short term. We just couldn’t continue to invest in what was essentially a start-up for us,” Cooke says. A holiday Nicole book mailed in early October; the final mailings, which will be clearance books, will drop in January.

“The Nicole `test’ was shorter-lived than we expected,” says Kelly Armstrong, vice president at Richmond, VA-based investment firm First Union Security. “The decision to fold it wouldn’t have come so quickly if the J. Jill catalog were performing better.”

So why isn’t J. Jill performing better? For starters, “we mailed our first fall book in early July during a heat wave, which resulted in lower sales of fall merchandise,” Cooke says.

Moreover, look-alike catalogs such as Nordstrom’s 2nd Nature and L.L. Bean’s Freeport Studio are competing for the same customers. “Other catalogs have stepped up their creative efforts to go head to head with J. Jill,” Armstrong says.

To fight back, J. Jill tried to capture a younger audience by selling more career-oriented fashions and using urban lifestyle photography. But the strategy resulted in a 40% reduction in productivity from prospecting lists and a rapid deterioration in response from its house file, Cooke says. “We always knew that competition would catch up to us. But we overreacted.”

J. Jill will now focus on expanding its core – and now lone – brand. It’s opening two stores this month and five stores next year, and will continue to invest in its Website, which launched Sept. 1 and already represents 5% of the company’s daily revenue. “We can’t lose sight of what we’ve done and where we’re headed,” Cooke says.

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