SAN FRANCISCO -- It took 19 years of growing Gap ( GPS) from a modest chain to a retail behemoth for Mickey Drexler to realize he didn't want the same thing for J. Crew ( JCG).
During his time at Gap from 1983 to 2002, Drexler helped turn a $480 million company into a $14 billion household name. But near the end of his seven-year reign as CEO, Gap staggered through a two-year sales slide because of fashion missteps that were exacerbated by the company's rapid expansion, as its store count ballooned from 550 in 1983 to more than 3,000 today. Since taking over J. Crew in 2003, Drexler has been hailed as the comeback kid, known for his savvy and not for his blunders. So far, he has refused to fall into the same trap that sank his career at Gap. He has grown J. Crew methodically instead of ramming stores on every corner. Drexler also has emphasized maximizing sales at existing stores rather than patching over problems by opening new stores. Today, J. Crew operates 189 retail stores and 55 factory stores, a relatively small climb from the 152 retail stores and 42 outlets Drexler inherited four years ago. This year, the company will expand its net square footage by a modest 7% to 9%, which includes 37 new stores. Some observers, though, question why J. Crew is expanding so slowly, especially when it is performing so well. And with its stock trading at lofty levels, J. Crew soon may start feeling increased pressure to expand quickly to keep up with rosy expectations. The stock already took a hit after the most recent quarterly report in September couldn't live up to high expectations. While J. Crew swung to a healthy profit for its second quarter and recorded a 13% increase in revenue, the sales figure was shy of Wall Street's target. The company also said it expects same-store sales to be up in the mid-single-digit percentage range this year, a slowdown from its recent string of double-digit increases.