No Sympathy for Mickey Drexler & J.Crew

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We clowned on JCrew's Mickey Drexler last week and this week he's unemployed. That's what happens when you fall victim to the innovator's dilemma. J.Crew is another classic example of a post-recession private equity buyout and dividend recap boom that saddled a once-high-flying retailer with a f*ck ton of debt. Now it's in deep distress and there are questions about Drexler's legacy. Seriously? Here's a guy who had previously been fired from another retailer only to be thrown a lifeline; he then made a bold investment in cahoots with some private equity bros, got lucky, and then tried to double down and take another bite at the apple with some more private equity bros (so creative, they are). Only that second bite was rotten and now the guy is unemployed and the company is quickly diving into the sh*tter. But legacy? The dude got a massive payout in the first buyout and so he, least of all, should be the last to really give a crap about legacy. You know what's a great legacy? Tens of millions of dollars, that's what. 

Retail: It's All About Merchandise. Peace Out Mickey Drexler (J. Crew)

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 J. Crew's Mickey Drexler blames merchandising and, in this case, a retail exec may actually be telling the truth. In a wildly inept kind of way (note: this blurb was in our newsletter that came out yesterday, Sunday, June 5. As of a few minutes ago, Drexler has been binned by the company. Later Mickey). Particularly since the New York Times dumped on the company's CURRENT merchandise right before the holiday weekend which, guessing here, probably turned off some potential customers. So, this ain't a legacy issue...clearly. Meanwhile, we're slowly becoming fan boys of Professor Scott Galloway. If you're unfamiliar with him (like we were until recently), we recommend you listen to this interview here (podcast). He's insightful about technology and we particularly like how he sh*ts on WeWork - a company that makes absolutely zero sense to us from a valuation perspective. Anyway, his piece "Shark Repellent -- Fighting Amazon" is one of the more succinct summaries on what it takes to combat the "Amazon Effect."