J. Crew Cuts Jobs

New York City J. Crew Group has initiated a cost-reduction program that is expected to generate approximately $40 million in annualized pre-tax savings. The program is being implemented in response to the challenging economic environment.

The company has reduced its work force by approximately 95 positions (including positions that are currently unfilled), primarily in the New York offices, and support functions in the field and distribution centers. This represents an approximate 10% reduction in staffing for the departments included. The affected associates have been offered severance and related transition assistance. The company is also suspending its 401(k) plan through the rest of the year.

"As we are all aware, we are operating in a very tough economic environment,” said Millard “Mickey” Drexler, J. Crew's chairman and CEO. “This has required us to make some difficult decisions, which we do not take lightly, but feel are necessary to ensure we remain competitively positioned over the long term. However, we believe our financial flexibility, our team, and our focus on quality products and the customer will enable us to navigate these turbulent times."

As previously announced, the company has also lowered its planned capital expenditures for fiscal 2009 to approximately $55 to $60 million, a decrease of approximately 25% from the projected 2008 level.

J. Crew expects to incur a pre-tax charge of approximately $1.5 million during the first quarter of fiscal year 2009 mainly to reflect anticipated severance payments and related costs for affected associates.