GPS Gap Inc

J. Crew Group Inc.'s two-year slump showed no signs of improving in the latest quarter, as sales fell 4% and the apparel chain struggled to regain customers.

Chairman and CEO Mickey Drexler cited a "difficult traffic environment" and said the company is focused on new merchandising, marketing and supply-chain initiatives. This week he also announced plans to start selling J. Crew merchandise in 16 Nordstrom Inc. department stores.

Sales at stores open at least a year declined 8% in fiscal second quarter ended July 30, following a decrease of 11% in the same period a year earlier. Rival Gap Inc.'s Banana Republic brand posted a 9% decline in the same period this year.

As in previous quarters, the Madewell brand posted stronger results than the namesake brand. Same-store sales decreased 9% at J. Crew, while that metric increased 3% at Madewell. The company's net loss narrowed to $8.6 million, compared with $13.6 million a year ago.

J. Crew, which was taken private in 2011 and has about $2 billion in debt, has struggled to win back shoppers after a number of style, sizing and quality missteps alienated its customer base. Like many teen retailers, J. Crew also faces declining foot traffic and fierce competition from fast-fashion players.

On Monday, the company said Nordstrom will be selling an edited assortment of merchandise from its namesake brand in 16 locations and on its website beginning Sept. 12. The department store has been selling product from Madewell since last year.

Unlike some chains that have been shrinking their footprint, J. Crew plans to open 36 new stores this year, including 3 J. Crew retail locations, 23 factory stores and 10 Madewell locations.

Write to Khadeeja Safdar at khadeeja.safdar@wsj.com

(END) Dow Jones Newswires

August 31, 2016 18:45 ET (22:45 GMT)

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