It's been a good year for J. Crew. The company has benefited from lots of free press and an unofficial endorsement of its clothing line from the nation's first lady, Michelle Obama. It has also watched its share price more than double. Now, J. Crew is getting another boost from an analyst who sees the company outperforming its rivals.
John Morris, an analyst with BMO Capital Markets, raised his rating on J. Crew and wrote to investors, that it would "capture market share from department stores, which are playing fashion too safe, planning inventory too lean, and over-focusing on private-label goods."
According to Mr. Morris, the firm's channel checks show J. Crew's fall merchandising is "trend-right and differentiated... Net/net, this is a company that has a strong product offering, one of the best management teams, and growth potential," he wrote.
Discussion Question: What is your assessment of J. Crew and the competition it faces? What can department stores pick up from their strategy?