The clear signal sent by these first quarter numbers is that J. Crew is a company in trouble. As much as the business is used to decline, the accelerated pace of deterioration, as evidenced by the 6.3% drop in overall sales and the 12% fall in J. Crew comparables, is worrying. That this weakness comes off the back of negative prior year numbers suggests that the company has not yet reached rock bottom.

The sharp drop in sales has damaged the bottom line where operating losses widened to $153 million from a little over $7 million in the same period a year ago. Although J. Crew managed to claw some of this loss back from income tax benefits, this was partly offset by an interest payment of $20 million on its $1.5 billion of long-term debt.

Overall, we believe the company is in a parlous state. In this context, recent management changes appear to be little more than rearranging deck chairs on the Titanic. There is always an argument for change, but change by itself is neither a strategy nor a solution – it needs to be accompanied by a blueprint for reinventing the business.

While J. Crew has some rudimentary plans for change, we do not believe these…