CEO Jumps Ship at Crew

Mark Salvary has resigned as ceo of the J. Crew Group (New York), effective immediately, in the midst of tumbling sales, profits and earnings. The company did not name a replacement, but said an aggressive search was underway for “a new chief executive with an extensive merchandising background.” Salvary took the Crew helm in 1998 after serving as an executive with the Nestle Corp.

The company's sales slipped 6 percent in 2001 and it had a net loss of $11 million. Earnings were down by more than a third. The earnings report was especially troublesome because of the heavy debt investors assumed to buy the business when Texas Pacific Group negotiated a leveraged buyout of Crew in 1997.

Texas Pacific, which bought 60 percent of the company, has been trying to convert it from a catalog company into a retailing empire that would compete with The Gap and The Limited (and could then be sold at a substantial profit). But Salvary's lack of merchandising experience was blamed for the stumbling progress.

Designers who had worked with him complained of his lack of knowledge about apparel basics. And his lack of merchandising expertise was also said to have complicated the transformation from catalog house to retailer because the stores so routinely ran out of stock on popular items.