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NEW YORK CITY–Despite a blunt statement that the United States is in a recession, J. Crew Group continues to grow, expanding all of its divisions and opening boutiques in Manhattan, executives said at its fourth-quarter conference call.

The company plans to open 43 new J. Crew Stores, five Madewells, 10 Crewcuts shop-in-shops and two to three freestanding Crewcuts. Among the new stores will be a small temporary men’s shop in New York City’s Tribeca neighborhood and a small women’s-only unit on the Upper East Side.

“We deal with it [the economic environment] as it is,” said Millard Drexler, J. Crew’s Chairman and CEO. “We’re not cutting back because we’re not doing anything frivolous.”

Madewell is still considered experimental, and has changed dramatically in its one-year existence, Drexler added.

“We are not counting this in any long-term plan, but we live and breathe to make this as successful as we can,” Drexler said.

For the quarter, revenues were $399.9 million, up 9% from the previous year. Comparable store sales were flat. Net income was $25 million, down from $44 million the previous year.

For fiscal 2007, revenues increased 16% from the previous year to $1,334.7 million. Comparable-store sales increased 6%. Net income was $97.1 million, compared with $71.6 million for fiscal 2006.

The company’s long-term financial targets include net square footage expansion in the 7% to 9% range, and diluted EPS growth in excess of 20%.

J. Crew Group operates 203 stores (including four Crewcuts and seven Madewell stores) and 63 factory outlet stores.

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