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J. Crew Group, Inc. at CIBC World Markets 7th Annual Consumer Growth Conference - Final.

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Original Source: FD (FAIR DISCLOSURE) WIRE

ROXANNE MEYER, SPECIALTY RETAIL ANALYST, CIBC WORLD MARKETS: My name is Roxanne Meyer, Specialty Retail Analyst at CIBC World Markets. Our next presentation will come from J. Crew. J. Crew is a multichannel, specialty retailer of women's, men's and kid's apparel and accessories that cater mainly to affluent adults. It is my pleasure to now introduce Mr. Jim Scully, Executive Vice President and Chief Financial Officer of J. Crew.

JIM SCULLY, EVP AND CFO, J. CREW GROUP, INC.: Thanks, Roxanne. So I want to briefly run through the presentation and then leave a little bit of time for some Q&A before we go to the breakout session. (inaudible) with our Safe Harbor Statement.

Roxanne said anyone knows that we run a fully integrated platform at J. Crew. You can see that 70% of our business is in our stores business, which is comprised of our retail, factory, Crewcuts and Madewell concepts. In addition, about 30% of our business is in our direct business, which is both catalog and Internet.

One of the unique things that the direct business gives us is the ability to reach our customers with one unified and consistent message from a marketing perspective. If you think about the profitability model of J. Crew, the direct business is the most profitable channel in the business. Factory is the second most profitable, and retail is the third most profitable.

What it comes to the business strategy, it really begins and ends with this first statement. Now, we have an intense focus on quality, design and style. It's really not -- we don't talk about a core customer demographic that we go after; it's more of an attitude. It's people with style and taste that understand the difference in quality and understand the value proposition that we offer. We see a big opportunity -- when you look at the designer boutiques and see some of the prices they offer, we can offer pretty comparable quality at a much lower price where we feel customers don't have to mortgage their houses to buy our product.

If you take that and you wrap it with what we think is an obsessive customer focused, customer service culture, which really starts at the top. For those of you that know Mickey, he's absolutely obsessed with pleasing our customers. There's absolutely no layers in our management team when it comes to that. Mickey responds to every e-mail and every voice-mail that he gets from customers. He recently sent out his e-mail address to over 40,000 customers of the Company.

He also expects us at every level in the Company to deal with any customer request immediately. It's not I'm going to get to it, but it's immediate. He has the belief that for every customer you touch, you create 10 additional customers. And it runs throughout the entire Company.

In terms of productivity, I mean the primary focus, as anybody knows anything about retail, comes from sales productivity. First, in your existing store base; secondly, to the new stores you open, but this also goes through the entire Company in terms of inventory productivity, expense productivity and also capital productivity, which we'll talk about as we go through the presentation.

If you think about the growth opportunities for J. Crew, first, you have to talk about...

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