Specialty apparel retailer J. Crew is a wounded bird, but with some TLC from the right caretaker, it could be nursed back to health. 

Any caretaker would have its nurturing skills severely tested, however. J. Crew's third-quarter same-store sales fell 11% -- and that's on top of a same-store sales decline of 2% in the quarter a year ago. Same-store sales at the main J. Crew division plunged 12% amid continued challenges in getting the styles and quality right for women's apparel. 

This week, the struggling retailer announced it had hired Michael Nicholson as its new president and chief operating and financial officer, likely presaging some kind of debt restructuring as CEO Mickey Drexler continues to search for a way to turn the company around.

To appreciate just how badly the once super-popular J. Crew performed in the quarter, consider that its same-store sales decline was even worse than the 9.6% quarterly fall at Sears Holding's (SHLD) Sears division, a department store chain that has one foot in the grave. Things were a little bit better at J. Crew's children's apparel concept Madewell, where sales rose 1% in the quarter.

The lackluster sales results were even more disappointing considering J. Crew had aggressively marked down slow-selling styles. Gross profit margins declined 160 basis points year over year as a result of those profit-busting markdowns. Adding insult to injury, J. Crew's inventories spiked 7%. Given the weak sales trends so far in 2015, this suggests more profit-killing discounting is in store after the holiday season in order to make way for early spring goods.

The latest in what has been a stretch of bad results for J. Crew and its once-rock star CEO Mickey Drexler caused the company to make an eye-popping statement on its projected value.

In the quarter, J. Crew recorded a non-cash impairment charge of $676 million related to goodwill for its J. Crew segment. According to the company, there is now no remaining goodwill attributable to its J. Crew operations, a mind-blowing fact to consider for a brand that gained notoriety for outfitting celebrities such as Michelle Obama and Prince William. Goodwill is essentially the value of a company's brand name and reputation.  

The write-down is a slap in the face for J. Crew's private equity owners, which in hindsight overestimated the company's value when it was acquired.  J. Crew was acquired by private equity firms TPG Capital and Leonard Green & Partners in 2010 for a total value of about $3 billion.


Off-trend styles, lower product quality and too-high prices have rocked J. Crew's once strong foundation.

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Despite the write-downs and poor sales trends, J. Crew could still prove fruitful for the right party. Indeed, the company's price tag now would be much cheaper than the $5 billion TPG Capital and Leonard Green were reported to be seeking for it back in 2014.

J. Crew's book value, calculated by subtracting total assets minus liabilities, nets out to about $1.1 billion. The company still has 287 J Crew retail stores, 99 Madewell stores, 159 factory locations, and its various online businesses. And J. Crew's brand remains relevant in the apparel sector -- it's just that the company has lost its way with what its preppy consumers want.

TheStreet takes a brief look at two companies that may want to consider placing a call to J. Crew's owners.

Coach

There are several reasons why handbag and accessories maker Coach (COH) should sniff around J Crew.

First, Coach caters to a similar consumer demographic as J. Crew -- higher-income consumers between the ages of 30 and 45 who tend to buy the latest styles to look good in the office or at a post-work event. Moreover, both chains target this demographic in some of the top malls and lifestyle centers in the U.S., while also catering to discount seekers at factory outlets.

By joining forces with J. Crew, Coach could sell its very best handbags and accessories in J. Crew stores, which are sorely in need of selling more complete looks to women. On the other hand, J. Crew could give Coach needed exposure to women's apparel, where Coach has only made small inroads. According to Coach's annual report, less than 9% of its sales are derived from women's outerwear and clothing.

Another aspect that may interest Coach is having its widely recognized designer, Stuart Vevers, try to turn around the ailing J. Crew. Vevers, age 42, joined Coach in 2013 and has worked diligently to infuse a sense of fashion into tired Coach handbag styles. As a result, same-store sales in North America have begun to turn the corner, declining 9.5% in the fourth quarter vs. a 19% plunge for the third quarter.

Vevers worked at Calvin Klein before landing positions with the design teams of Bottega Veneta, Givenchy and Louis Vuitton (LVMUY) , where he worked alongside Marc Jacobs. In 2006, Vevers won Accessory Designer of the Year at the British Fashion Design awards.

If Coach could get J. Crew at a bargain price and hand it off to design whiz Vevers, it may be in a good position to unlock value.

In addition, given that the Coach brand is a staple at department stores such as Macy's(M) - Get Report and Nordstrom(JWN) - Get Report , the combined company could bring revitalized J. Crew products to hundreds more locations. J. Crew currently does not sell merchandise in department stores.

Uniqlo

Fast Retailing's founder and president Tadashi Yanai -- Japan's richest man, according to Forbes -- has some lofty sales goals for the company. Yanai has projected annual sales in the U.S. of $10 billion by 2020, despite only operating 49 Uniqlo retail stores here. The company does not currentlybreak out annual sales for the U.S.

It's a seemingly crazy goal -- by comparison, Gap (GPS) - Get Report, with over 850 stores in the U.S., is on pace to reach $16 billion in sales this year. But achieving that goal is integral to Yanai reaching his $50 billion global sales target by 2020, up from the $13 billion in sales recorded in the fiscal year ended in August.

Overall, the sales goals seem far-fetched not only due to Uniqlo's small footprint in the U.S., but also because it continues to struggle here, likely due to too much focus on selling basic sweaters and t-shirts. The company recently took a $134 million impairment charge related to its U.S. store assets as a result of its weak results.

To get moving toward its lofty sales targets, Fast Retailing may want to reconsider talks with J. Crew, which would allow it to serve a high-income demographic in the U.S. and instantly increase the size of its store network. Back in March 2014, Fast Retailing reportedly walked away from discussions with J. Crew executives and the company's private-equity owners.

In hindsight, the company made a wise decision backing away from J. Crew at that time, given its price tag and subsequent troubles, but now might be a better time to score J. Crew on the cheap.