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J Crew blames 'challenging environment' for profit slip

J Crew’s profits slipped 8% last year despite revenues rising amid promotional activity across the industry and reduced shopping centre footfall.

Net income at the US retailer was $88.1m (£53.29m) compared with $96.1m (£58.13m) last year, as turnover increased 9% to $2.43bn (£1.47bn) in the year to February 1. Store sales rose 6% to $1.64bn (£992m).

In its fourth quarter, net income tumbled 42% to $5.9m (£3.6m). However, revenues increased 7% to $686.2m (£415.2m) with like-for-like sales growing 3%. The company delivered robust online sales growth online as sales grew 16% to $755.9m (£457.2m).

Chief financial officer Stuart Haselden said the fourth quarter was “a challenging operating environment across the industry”.

He added: “I would point to a few factors: traffic, the promotional activity across the industry and weather.”

The chain, which owns 266 stores, also announced it will be opening 20 J Crew stores across the globe this year. These will include two in London, four in Canada and two in Hong Kong.

Last week Drapers revealed J Crew is in talks to open premises at Westfield London and Sloane Square.

Earlier this month there was speculation over the future ownership of J Crew, with Uniqlo parent company Fast Retailing reported to be in talks about buying the business.

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