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J.Crew May Let Go of Madewell Brand

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J.Crew looks to be shedding excess weight as it struggles to get its business back on track.

The company may be considering a separation of its more successful Madewell brand, sources familiar with the matter told Reuters, and an investment bank has been brought in to help assess strategic options as J.Crew battles a big debt burden and declining sales.

Though sources stressed that a decision hasn’t yet been made, the separation of Madewell could lead to a sale or spinoff.

For the second quarter, J.Crew reported comparable sales down 8 percent and revenues down 4 percent to $569.8 million. Breaking out the businesses, comparable sales at J.Crew fell 9 percent, which brought its overall sales down 6 percent to $476.7 million. At Madewell, comparable sales were up 3 percent, giving overall sales a 15 percent boost to $78.3 million.

Read more at Sourcing Journal.