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Mickey Drexler's Risky Strategy
August 23, 2008

Fortune has us meet Mickey Drexler, the man who made Gap (GPS) into a pop-culture phenomenon and reinvented retailing icon J.Crew, Drexler isclosely watched for insight into the new trends in shopping.

Part of what makes Drexler influential is his ability to predict not only what will sell but also how shopping habits are changing.

What's Drexler thinking now? While the retail envronment is the worst he's seen in 40 years, he thinks "the dominance of the big-name designer is played out. He's stacking his chips on quality goods at a fair price, , repositioning J. Crew (JCG) as a luxury-for-less alternative."

As confident as Drexler is, the timing is risky. While J. Crew is offering a better value proposition, it's going upscale at a moment when the average American consumer is scaling back on discretionary spending. Drexler sees the stagnant economy as not only a trial but also as an opportunity, a chance to steal business from department stores and brand-name designers. His logic is straightforward: Why can't an American retailer use the same Italian mills and fabric makers as European designers but then deliver a more affordable alternative to goods sold at department stores and boutiques?

I think Beverly has pursued this strategy without realizing it.  She offers the Sherrill line which is solid hard wood frames and eight way hand tied construction and the price point is lower than big name brands.  She associates quality with solid wood dining table tops snd offers Dinec.  She carries some area rugs in wool and silk in great designs.  Together, we found unframed art at Market with a very low unit cost, but high quality, that would be a great addition to the most expensive home.  We hope Drexler has it right; that consumers will buy great value and forgo name brands.

Thoughts?  Email me at landfair3554@comcast.net

Posted by Mike Landfair on August 23, 2008 | Comments (1)