The change brings fresh upheaval to a chain suffering from sputtering sales, heavy debt and a broader shift away from mall-based retail. Same-store sales -- a key measure -- fell 7 percent last year and 8 percent in 2015. The company also has been hobbled by borrowing tied to its 2011 purchase by TPG Capital and Leonard Green & Partners LP.
I italicized the sentence above. Add J. Crew to the list of retailers potentially ruined by private equity firms. Mickey Drexler is a retail veteran, which is positive for J. Crew, but the private equity debt expense makes his job tougher. The fashion industry is difficult enough with changing consumer trends and tastes, without adding the noose of private equity instituted debt. Of course, the private equity principals paid themselves from the borrowings that now threaten J. Crew, so they don't care.
J. Crew, led by Chief Executive Officer Mickey Drexler, has been trying to turn around its operations by closing stores, cutting costs and streamlining its inventory. The efforts have helped reduce red ink: The company posted net income of $1.1 million in its most recently reported quarter, compared with a loss of $7 million a year earlier.