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NEW YORK CITY-J. Crew Group will cut store growth and new square footage by 40% this year, executives said at the company’s fourth-quarter conference call.

The company will open 25 new units in 2009, compared with 42 new stores last year, said Chairman and CEO Millard Drexler. It will roll out seven J. Crew units, six factory outlet stores, four Crewcuts and eight Madewell locations. The company is carefully looking at rent structures.

“I don’t think the realities have struck some of the landlords out there,” Drexler said, adding that if sales and traffic are down, “Rents should be down, too.”

The key for retail success is newness, he added.

“People are in fact buying fashion,” Drexler said. “The last thing we would want to be in is basics that look like other people’s goods. Our company is about style.”

For the quarter, sales were $388 million, down 3% from the same quarter last year. Comparable store sales declined 13%. The company posted a loss of $13.5 million, vs. earnings of $25 million in the fourth quarter of fiscal 2007.

For the year, revenues were $1.4 billion, up 7% from 2007. Comparable store sales dropped 4%. Net income was $54.1 million, compared with $97.1 million in fiscal 2007.

J. Crew Group operates 229 retail stores (including 6 Crewcuts and 12 Madewell stores), and 76 factory outlet stores.

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