"Right now we're all a little afraid," he said. "If there's anyone getting up in the morning and not saying 'uh oh,' then I'd like some of that medication."

Apparel chain J. Crew has initiated a company-wide hiring freeze Drexler revealed, even during the holiday season, which he said falls on a terrible calendar year retail selling-wise. "If someone wants to hire someone, someone's got to leave," Drexler said.

Even the New York City market, which was a holdout compared to the rest of the country, is suffering after European tourists stopped coming here as the dollar picked up steam compared to their currencies. "Traffic is pretty much miserable everywhere," Drexler said. "America has been fat and happy for 10 years. No more."

Keep in mind all of this was coming from a merchant whose company is doing pretty darn well in this environment, at least compared with other apparel chains. During its third quarter, the New York City-based retailer's same-store sales rose 5% year over year at its 226 stores. Total revenues increased 9%, to $363.1 million. Operating income did drop from $47.7 million to $35.2 million.

So did Drexler have any words of hope at all? He said that leadership is extremely valuable in this market, and he gets irritated when he walks into a J. Crew or on of its other chains and it isn't obvious who is in charge of the store. And, ironically, Drexler, the former leader of Gap Inc. stressed that chains should temper their store growth and focus more on the quality of their products.

"I'm not in a race to be the biggest or fastest," he said. "It gets you going where your faster, not better."