J. Jill is escaping the retail mire.

While most retailers grapple with bloated inventories, succumb to massive markdowns, and feel increasingly nervous about Christmas, J. Jill is keeping its cool.

The specialty retailer catering to middle-aged and older women has inventories above last yr, though under relative control, and moved into the black last quarter when it posted record adjusted EBITDA and better margins.

J. Jill isn’t about to be lured into what’s sure to be one other promotionally charged holiday season. Having a business with a reasonably even balance of sales volume quarter to quarter makes for a “less stressful” holiday season, executives contend. The main target stays on selling at full-price “premium” casual merchandise appropriate for on the job and after-hours. It’s a segment of the apparel business that’s sprung into popularity, post-pandemic, as people return to working of their offices and wish to feel comfortable there in what they wear. The publicly-traded J. Jill, selling merchandise entirely under its own private label, sees an enormous opportunity to extend its popularity and lift its profile.

In August. J. Jill launched its “Welcome Everybody” campaign, touting inclusivity and an expanded size range. It appears on store windows, signs, in catalogues, digital ads and unsolicited mail, and is seen as ongoing, not only for a season or two. Rochelle Johnson, a beauty, style and plus-size influencer with a blog, “Beauticurve,” is a component of the campaign, together with other influencers.

“We feel like we’re a too well-kept secret,” J. Jill’s president and chief executive officer, Claire Spofford, said during an exclusive interview with WWD.

“‘Welcome Everybody’” is an enterprise-wide approach. It’s about communicating in a more practical and relevant technique to the buyer,” to generate greater traffic to the web site and stores, Spofford said.

“We’ve a chance to modernize the brand. We will not be changing the center and soul of the brand.”

At the side of the campaign, J. Jill stores have been reset so the missy and ladies’s size presentations are contained in a single, size-integrated shopping area. Also within the stores, styles were prolonged to incorporate size 2X, which is size 20. The range begins at extra small. Online, styles in sizes XS to 4X proceed to be offered. For J. Jill, extra small through 4X is taken into account “an everyday size run.”

Last Thursday, Spofford was inside The Well, a wellness center on East fifteenth Street in Manhattan, and a fitting setting to showcase the primary Pure Jill Elements collection, the newest iteration of the Pure Jill subbrand, priced roughly 30 percent higher and emphasizing organic shapes, nature-inspired colours, indigos, soft fabrics and relaxed silhouettes.

“It’s an amplified, version of Pure Jill with a zen, artisanal, peaceful aesthetic,” with much hand-stitching, 25 fashion styles, and 10 accessories, explained Elliot Staples, J. Jill’s senior vice chairman of design, who was also on the scene.

Pure Jill Elements shops-in shop, from 150 to 500 square feet in size, began being tested in seven J. Jill stores earlier this month, marking the primary brick-and-mortar presence for the capsule collection, which continues to be sold on JJill.com. More broadly, the tactic reflects recent efforts by J. Jill  to boost its profile and are available out of its shell.

“We do consumer insight work,” at the very least quarterly, said Spofford. “We do benchmarking and we have a look at the chance. We’ve relatively low awareness as a brand. We’ve way fewer stores than a few of the competition and that’s a part of it. We’ve 247 stores. But after we get a customer, there is basically strong loyalty.

“There’s a chance for one more 20 to 25 stores over the subsequent few years,” said the CEO. That may still make for a comparatively small brick-and-mortar footprint, but the concept is to maintain growth manageable enough to navigate through fast-changing consumer shopping behavior. J. Jill’s clientele, generally professionals, at the very least college-educated, and with a median household income of $150,000, is getting more cautious on spending yet not holding back to the degree that those with fewer discretionary dollars are.

“We’re very focused on profitable growth,” said Spofford. “The final thing we wish to do is undermine the progress we’ve made here.” J. Jill stores average 3,400 square feet in size, and are divided into two areas for the regular-size run and petites.

“I even have been on this business a protracted time,” said Spofford, who had greater than 20 years of retail experience before becoming J. Jill CEO in February 2021 after serving as president of Cornerstone Brands, and earlier, chief marketing officer of J. Jill. “The J. Jill customer is probably the most loyal customer I even have ever seen. Our average customer tenure is 10 years with the brand. Our retention rates are very high. Our net promoter scores are very high. We just must get more people into the brand.”

For the second quarter ended July 30, J. Jill’s net income was $17.8 million in comparison with a net lack of $24.6 million within the year-ago period. There was record adjusted EBITDA of $35.6 million, versus $32.7 million a yr ago; net sales were up 0.7 percent to $160.3 million, and gross margin was 70.1 percent in comparison with 68.7 percent within the second quarter of fiscal 2021.

For the primary half of 2022, sales rose 10.1 percent to $317.4 million; adjusted EBITDA was $66.9 million in comparison with $49.6 million in 2021, and gross margin was 69.9 percent in comparison with 68.4 percent in last yr’s half. J. Jill ended trading Friday priced at $16.69, and during the last 52 weeks has ranged from a high of $20.89 to a low of $12.47.

“Everyone has acknowledged that last yr there was a tailwind within the recovery and we definitely benefited from that as well. But we feel the disciplines we’ve put in for planning the business and ensuring our inventories are tightly managed helps to support full-price selling and that’s what we were in a position to proceed to enjoy in Q2,” said Spofford.

“Q2 was actually a record quarter for us, by way of EBITDA,” said Spofford. Inventory in Q2 was up 12 percent. “We were up marginally by way of inventory total however it was all in transit. Our on-hand units and costs were actually down on a year-over-year basis. Our inventory was way lower than we’ve seen within the marketplace.”

Sales growth was minimal last quarter, though bottom-line growth got here through gross margin expansion. Asked in regards to the pattern of sales, Spofford said, “We had a powerful begin to the quarter. May and into June was very, very strong. We did see a softening in traffic and sales within the latter half of the quarter. We heard from our sales teams within the stores that [the customer] had shopped early and went away on vacation and was wearing those clothes she bought earlier within the quarter.” With J. Jill’s customer base, Spofford said, “We prefer to say she’s relatively resilient but not impervious,” to inflation and macro economic issues.

Spofford said J. Jill has been working to stop carrying as much markdown inventory, season to season, as previously. “After we don’t need to work through all those markdowns we will deal with the full-price business and tell our customer what’s so beautiful in regards to the product and the brand story.”

The stores are less filled with merchandise, she said. “The inventory levels are very purposeful and that gave us the room so as to add size 2X to the stores very easily, and that takes us all the best way as much as size 20 within the stores, which is the overwhelming majority of the market. We haven’t talked about that, really in any respect,” until now.

Recently, J. Jill created “price parity.” So no matter its size, a selected style is priced the identical. Asked if the upper costs of making plus sizes means there’s some margin loss by charging the identical for a method no matter its size, Spofford said, “We plan for it and we’re managing it…For me, the shopper must be at the middle of all the things we do and for me, price parity is just the fitting thing to do. Since August, we took that up charge as well and we added 2X to the stores as well. Welcome Everybody is basically our first campaign talking about inclusive sizing. That is our intention going forward,” meaning it’s the messaging that might be around for greater than only a season or two.

For the third quarter, the corporate expects revenues to be flat to down 3 percent in comparison with the third quarter of fiscal 2021. Adjusted EBITDA is predicted to be within the range of $21 million and $23 million.

Asked for her outlook on the fourth quarter, Spofford answered, “We anticipate early shopping may occur again this yr. But we’re very balanced from a seasonal standpoint. Our first half is just as strong as our back half from a sales standpoint. It’s unusual,” in retailing. “Mother’s Day is like Christmas for us. It’s great. I’ve been in businesses which are very Q4-driven and it’s stressful.

“It’s hard to predict what the macro environment goes to be,” Spofford added. “The Fed rate just went up again yesterday. But we’re sticking to our strategy. We imagine we’ve beautiful assortments coming down the pike for the vacation season. We did see some impact from omicron last yr in Q4. Omicron type of hit on Black Friday, so we’re hopeful we are going to anniversary that timeframe. There’s some opportunity there. We are only sticking by our guns by way of tightly managing the business and staying focused on our customers and experience.” 

She stressed not being overinventoried, and that the corporate is “very determined to proceed our full-price message and full-price selling. We all know the fourth quarter is more promotional than other quarters. It all the time is for everyone. We will not be naive about that. But we don’t feel we’re able of getting to be overly aggressive. We predict one of the best defense from a promotional environment is powerful product.”

Considering the character of its merchandise and its audience, J. Jill is more about self-purchasing relatively than gifts. “She’s very curious about finding her outfits for holiday parties,” Spofford observed. “That could be a big a part of our business during that timeframe.”

With its fashion, J. Jill never gets edgy or too trendy, nor tailored or tight-fitting. But don’t call it secure. The sweet spot, said Spofford, is “sophisticated premium casual.”

“We don’t go on the market, because she doesn’t want us to go on the market. We attempt to fast-follow on the trends,” Spofford explained. “This premium casual, versatile product that you could dress up or dress down is basically where we sit and that’s what she is on the lookout for. It’s suitable for back-to-office or whatever you do during your day. You’ll be able to dress it up or dress it down.

“One in every of the things we’ve been doing higher within the last couple of years is having slightly bit more sophisticated color palette and he or she [the customer] really responds to it. She loves the colour and the attractive neutrals.”

The last couple of years J. Jill has been working on its fit across all size ranges. “It’s pretty complicated and technical to be certain proportions are right. We’ve spent a whole lot of time perfecting that. We’ve been working hard with our source base and our design and technical design team on it.”

Novelty, linens and prints are selling well, in addition to modern fabric techniques for Pure Jill, she noted. “It’s those things which are slightly different, that she will be able to’t find anywhere else. Dresses have been strong all yr.

“We will not be tailored, and never tight. We talk in regards to the flow of the material, we deal with beautiful fabrics that flow and drape, and move with you. That may be very much a core piece of our design philosophy.”

In a world and a fashion industry preoccupied with youth, J. Jill isn’t changing its demographic. “It’s still very much at 45-plus; we feel like there’s a whole lot of opportunity in that space. We feel we’ve a whole lot of growth potential on this core business that we haven’t tapped yet,” said Spofford. “There are a whole lot of women on the market who would love J. Jill and just don’t know us.”