UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
March 20, 2013

J.Crew Group, Inc.
(Exact name of registrant as specified in its charter)

Commission File Number: 333-175075

Delaware	 	22-2894486	
(State or other jurisdiction
of incorporation)	 	(IRS Employer
Identification No.)	
770 Broadway
New York, NY 10003
(Address of principal executive offices, including zip code)
(212) 209-2500
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)	
 
¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)	
 
¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))	
 
¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))	

 

Item 2.02.	Results of Operations and Financial Condition.	
On March 20, 2013, J.Crew Group, Inc. issued a press release announcing the Company’s financial results for the fourth quarter and fiscal year ended February 2, 2013. The Company is furnishing a copy of the press release hereto as Exhibit 99.1.
 
Item 9.01.	Financial Statements and Exhibits	
(a) through (c) Not applicable
(d) Exhibits:
The following exhibit is furnished with this Current Report on Form 8-K:

Exhibit
No.	  	Description	
 	 	
99.1	  	Press Release issued by J.Crew Group, Inc. on March 20, 2013	
The information in this Current Report is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), nor shall such information be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly stated by specific reference in such filing.

SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

 	 	J.CREW GROUP, INC.	
 	 	 	
Date: March 20, 2013	 	By:	 	/s/ Stuart C. Haselden	
 	 	 	 	Stuart C. Haselden	
 	 	 	 	Chief Financial Officer	

Exhibit 99.1

 	 	Contacts:
 
Stuart C. Haselden
Chief Financial Officer
(212) 209-8461	
 	 	
 	 	Allison Malkin/Joe Teklits
ICR, Inc.
(203) 682-8200	
J.CREW GROUP, INC. ANNOUNCES FOURTH QUARTER
AND FISCAL 2012 RESULTS
NEW YORK, March 20, 2013 — J.Crew Group, Inc. today announced financial results for the three months and the fiscal year ended February 2, 2013.
On March 7, 2011, J.Crew was acquired by investment funds affiliated with TPG Capital, L.P. and Leonard Green & Partners, L.P. Although the Company continued as the same legal entity after the acquisition, last year’s financial statements were prepared for the following periods: (i) March 8, 2011 to January 28, 2012 (Successor) and (ii) January 30, 2011 to March 7, 2011 (Predecessor). To facilitate a meaningful comparison of our results, we have presented a pro forma statement of operations for fiscal 2011, which reflects the combination of the Successor and Predecessor periods, giving effect to the acquisition and related transactions as if they occurred on the first day of the fiscal year. The results for the fourth quarter of fiscal 2011 have not been prepared on a pro forma basis, as the transaction was effective prior to the first day of the quarter.
Our fiscal year ends on the Saturday closest to January 31, typically resulting in a 52-week year. The results of the fourth quarter and fiscal 2012, however, contain an additional week, and reflect the 14 and 53 week periods ended February 2, 2013. Sales generated in the 53 rd  week are not included in comparable company sales.
Fourth Quarter highlights:
 
 	•	 	Revenues increased 21% to $642.9 million (which includes $21 million generated in the 14th week), with comparable company sales increasing 11%. Comparable company sales increased 6% in the fourth quarter last year. Store sales increased 18% to $416.9 million. Store sales increased 16% in the fourth quarter last year. Direct sales increased 27% to $217.3 million following an increase of 10% in the fourth quarter last year.	
 
 	•	 	Gross margin increased to 38.4% from 37.8% in the fourth quarter last year. Last year included amortization of inventory step-up from purchase accounting of $1.7 million.	
 
 	•	 	Selling, general and administrative expenses increased to $205.7 million, or 32.0% of revenues, from $159.1 million, or 30.0% of revenues, in the fourth quarter last year. This year reflects additional share-based and incentive compensation of $9.3 million. Last year included transaction-related net insurance recoveries of $9.8 million.	
 
1

 	•	 	Operating income decreased slightly to $41.4 million, or 6.4% of revenues, from $41.7 million, or 7.9% of revenues, in the fourth quarter last year. Operating income this year includes additional share-based and incentive compensation of $9.3 million. Operating income last year benefited from transaction-related net insurance recoveries, partially offset by amortization of inventory step-up noted above.	
 
 	•	 	Net income was $10.2 million compared to $15.1 million in the fourth quarter last year. Net income this year was impacted by additional share-based and incentive compensation. Net income last year benefited from transaction-related net insurance recoveries, offset by the amortization of inventory step-up noted above.	
 
 	•	 	Adjusted EBITDA increased to $70.4 million from $59.5 million in the fourth quarter last year. An explanation of the manner in which we use adjusted EBITDA and an associated reconciliation to GAAP measures are included in Exhibit (5).	
Fiscal 2012 highlights:
 
 	•	 	Revenues increased 20% to $2,227.7 million (which includes $21 million generated in the 53rd week), with comparable company sales increasing 13%. Comparable company sales increased 3% last year. Store sales increased 21% to $1,546.6 million. Store sales increased 7% last year. Direct sales increased 19% to $651.5 million following an increase of 11% last year.	
 
 	•	 	Gross margin increased to 44.3% from 41.7% last year.	
 
 	•	 	Selling, general and administrative expenses increased to $733.1 million, or 32.9% of revenues, from $587.4 million, or 31.7% of revenues, last year. This year reflects additional share-based and incentive compensation of $34.4 million.	
 
 	•	 	Operating income increased to $253.7 million, or 11.4% of revenues, from $185.8 million, or 10.0% of revenues, last year. Operating income this year includes additional share-based and incentive compensation of $34.4 million	
 
 	•	 	Net income was $96.1 million compared to $51.5 million last year.	
 
 	•	 	Adjusted EBITDA increased to $359.6 million compared to $282.2 million last year. An explanation of the manner in which we use adjusted EBITDA and an associated reconciliation to GAAP measures are included in Exhibit (6).	
Balance Sheet highlights:
 
 	•	 	Cash and cash equivalents decreased to $68.4 million from $221.8 million at the end of the fourth quarter last year, primarily a result of a one-time special dividend of $197.5 million paid in the fourth quarter.	
 
 	•	 	Total debt was $1,579 million, consisting of the senior secured term loan of $1,179 million, maturing in 2018, and the senior unsecured notes of $400 million, maturing in 2019; compared to $1,594 million at the end of the fourth quarter last year.	
 
 	•	 	Inventories were $265.6 million compared to $242.7 million at the end of the fourth quarter last year. Inventories increased 9% but remained flat on a per square foot basis.	
How We Assess the Performance of Our Business
In assessing the performance of our business, we consider a variety of performance and financial measures. A key measure used in our evaluation is comparable company sales, which includes (i) net sales from stores that have been open for at least twelve months, (ii) direct net sales, and (iii) shipping and handling fees.
 
2

Use of Non-GAAP Financial Measures
This announcement includes certain non-GAAP financial measures. An explanation of the manner in which we use adjusted EBITDA and an associated reconciliation to GAAP measures is included in Exhibits (5) and (6).
Conference Call Information
A conference call to discuss fourth quarter results is scheduled for tomorrow, March 21, 2013, at 11:00 AM Eastern Time. Investors and analysts interested in participating in the call are invited to dial (877) 407-3982 approximately ten minutes prior to the start of the call. The conference call will also be webcast live at www.jcrew.com. A replay of this call will be available until March 28, 2013 and can be accessed by dialing (877) 870-5176 and entering conference ID number 410152.
About J.Crew Group, Inc.
J.Crew Group, Inc. is a nationally recognized multi-channel retailer of women’s, men’s and children’s apparel, shoes and accessories. As of March 20, 2013, the Company operates 296 retail stores (including 240 J.Crew retail stores, eight crewcuts stores and 48 Madewell stores), jcrew.com, jcrewfactory.com, the J.Crew catalog, madewell.com, the Madewell catalog, and 106 factory stores. Additionally, certain product, press release and SEC filing information concerning the Company are available at the Company’s website  www.jcrew.com .
 
3

Forward-Looking Statements:
Certain statements herein, including projected store count and square footage in Exhibit (7) hereof, are “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect our current expectations or beliefs concerning future events and actual results of operations may differ materially from historical results or current expectations. Any such forward-looking statements are subject to various risks and uncertainties, including our substantial indebtedness and lease obligations, the strength of the global economy, declines in consumer spending or changes in seasonal consumer spending patterns, competitive market conditions, our ability to anticipate and timely respond to changes in trends and consumer preferences, our ability to successfully develop, launch and grow our newer concepts and execute on strategic initiatives, products offerings, sales channels and businesses, material disruption to our information systems, our ability to implement our real estate strategy, our ability to attract and retain key personnel, interruptions in our foreign sourcing operations, and other factors which are set forth in the section entitled “Risk Factors” and elsewhere in our Annual Report on Form 10-K and in all filings with the SEC made subsequent to the filing of the Form 10-K. We do not undertake to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
 
4

Exhibit (1)
J.Crew Group, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except percentages)
(unaudited)

 	  	Fourth Quarter
Fiscal 2012(a)	 	 	Fourth Quarter
Fiscal 2011	 	
 	 	 	
Net sales:	  	 	 	 	 	 	 	 	
Stores	  	$	416,850	  	 	$	354,044	  	
Direct	  	 	217,313	  	 	 	170,815	  	
 	 	 	
Other	  	 	8,735	  	 	 	6,083	  	
 	  	 	 	 	 	 	 	 	
Total revenues	  	 	642,898	  	 	 	530,942	  	
 	 	 	
Cost of goods sold, including buying and occupancy costs	  	 	395,765	  	 	 	330,131	  	
 	  	 	 	 	 	 	 	 	
Gross profit	  	 	247,133	  	 	 	200,811	  	
As a percent of revenues	  	 	38.4	% 	 	 	37.8	% 	
 	 	 	
Selling, general and administrative expenses	  	 	205,713	  	 	 	159,129	  	
As a percent of revenues	  	 	32.0	% 	 	 	30.0	% 	

Operating income	  	 	41,420	  	 	 	41,682	  	
As a percent of revenues	  	 	6.4	% 	 	 	7.9	% 	
 	 	 	
Interest expense, net	  	 	26,823	  	 	 	25,095	  	

Income before income taxes	  	 	14,597	  	 	 	16,587	  	
 	 	 	
Provision for income taxes	  	 	4,392	  	 	 	1,440	  	

Net income	  	$	10,205	  	 	$	15,147	  	

(a)	consists of 14 weeks.	
 
5

Exhibit (2)
J.Crew Group, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except percentages)
(unaudited)

 	  	Fiscal 2012(a)	 	 	Pro forma
Fiscal 2011	 	
 	 	 	
Net sales:	  	 	 	 	 	 	 	 	
Stores	  	$	1,546,619	  	 	$	1,280,750	  	
Direct	  	 	651,480	  	 	 	545,675	  	
 	 	 	
Other	  	 	29,618	  	 	 	28,563	  	
 	  	 	 	 	 	 	 	 	
Total revenues	  	 	2,227,717	  	 	 	1,854,988	  	
 	 	 	
Cost of goods sold, including buying and occupancy costs	  	 	1,240,989	  	 	 	1,081,792	  	
 	  	 	 	 	 	 	 	 	
Gross profit	  	 	986,728	  	 	 	773,196	  	
As a percent of revenues	  	 	44.3	% 	 	 	41.7	% 	
 	 	 	
Selling, general and administrative expenses	  	 	733,070	  	 	 	587,399	  	
As a percent of revenues	  	 	32.9	% 	 	 	31.7	% 	

Operating income	  	 	253,658	  	 	 	185,797	  	
As a percent of revenues	  	 	11.4	% 	 	 	10.0	% 	
 	 	 	
Interest expense, net	  	 	101,684	  	 	 	101,347	  	

Income before income taxes	  	 	151,974	  	 	 	84,450	  	
 	 	 	
Provision for income taxes	  	 	55,887	  	 	 	32,936	  	

Net income	  	$	96,087	  	 	$	51,514	  	

(a)	consists of 53 weeks.	
 
6

Exhibit (3)
J.Crew Group, Inc.
Condensed Consolidated Pro Forma Statement of Operations
(in thousands, except percentages)
(unaudited)

 	  	For the Period
March  8, 2011 to
January 28, 2012	 	 	  	  	For the Period
January 30, 2011
to March 7, 2011	 	 	Adjustments	 	 	Pro forma
Fiscal 2011	 	
 	  	(Successor)	 	 	  	  	(Predecessor)	 	 	 	 	 	 	 	
 	 	 	 	 	 	
Net sales:	  	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	
Stores	  	$	1,194,276	  	 	 	  	$	86,474	  	 	$	—  	 	 	$	1,280,750	  	
Direct	  	 	502,033	  	 	 	  	 	43,642	  	 	 	—  	  	 	 	545,675	  	
 	 	 	 	 	 	
Other	  	 	25,441	  	 	 	  	 	3,122	  	 	 	—  	  	 	 	28,563	  	
 	  	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	
Total revenues	  	 	1,721,750	  	 	 	  	 	133,238	  	 	 	—  	  	 	 	1,854,988	  	
 	 	 	 	 	 	
Cost of goods sold, including buying and occupancy costs	  	 	1,042,197	  	 	 	  	 	70,284	  	 	(a)	 (30,689	) 	 	 	1,081,792	  	
 	  	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	
Gross profit	  	 	679,553	  	 	 	  	 	62,954	  	 	 	30,689	  	 	 	773,196	  	
As a percent of revenues	  	 	39.5	% 	 	 	  	 	47.2	% 	 	 	 	 	 	 	41.7	% 	
 	 	 	 	 	 	
Selling, general and administrative expenses	  	 	574,877	  	 	 	  	 	79,736	  	 	(a)	 (67,214	) 	 	 	587,399	  	
As a percent of revenues	  	 	33.4	% 	 	 	  	 	59.8	% 	 	 	 	 	 	 	31.7	% 	

Operating income (loss)	  	 	104,676	  	 	 	  	 	(16,782	) 	 	 	97,903	  	 	 	185,797	  	
As a percent of revenues	  	 	6.1	% 	 	 	  	 	(12.6	)% 	 	 	 	 	 	 	10.0	% 	
 	 	 	 	 	 	
Interest expense, net	  	 	91,683	  	 	 	  	 	1,166	  	 	(b)	8,498	  	 	 	101,347	  	

Income (loss) before income taxes	  	 	12,993	  	 	 	  	 	(17,948	) 	 	 	89,405	  	 	 	84,450	  	
 	 	 	 	 	 	
Provision (benefit) for income taxes	  	 	584	  	 	 	  	 	(1,798	) 	 	(c)	34,150	  	 	 	32,936	  	

Net income (loss)	  	$	12,409	  	 	 	  	$	(16,150	) 	 	$	55,255	  	 	$	51,514	  	
 	  	 	 	 	 	 	  	 	 	 	 	 	 	 	 	 	 	 	
See notes to pro forma statement of operations
 
7

Notes to Pro Forma Statement of Operations
 
(a)	To give effect to the following adjustments:	

(in thousands)	  	Adjustments	 	
 	 	
Amortization expense(1)	  	$	813	  	
Depreciation expense(2)	  	 	880	  	
Sponsor monitoring fees(3)	  	 	649	  	
Amortization of lease commitments, net(4)	  	 	2,199	  	
Elimination of non-recurring charges(5)	  	 	(102,444	) 	
 	  	 	 	 	
Total pro forma adjustment	  	$	(97,903	) 	
 	  	 	 	 	
Pro forma adjustment:	  	 	 	 	
Recorded in cost of goods sold	  	$	(30,689	) 	
Recorded in selling, general and administrative expenses	  	 	(67,214	) 	
 	  	 	 	 	
Total pro forma adjustment	  	$	(97,903	) 	

(1)	To record five weeks of additional amortization expense of intangible assets for our Madewell brand name, loyalty program and customer lists amortized on a straight-line basis over their respective useful lives.	
(2)	To record five weeks of additional depreciation expense of the step-up of property and equipment allocated on a straight-line basis over a weighted average remaining useful life of 8.2 years.	
(3)	To record five weeks of additional expense (calculated as the greater of 40 basis points of annual revenues or $8 million) to be paid to the Sponsors in accordance with a management services agreement.	
(4)	To record five weeks of additional amortization expense of favorable and unfavorable lease commitments amortized on a straight-line basis over the remaining lease life, offset by the elimination of the amortization of historical deferred rent credits.	
(5)	To eliminate non-recurring charges that were incurred in connection with the acquisition and related transactions, including acquisition-related share based compensation, transaction costs, transaction-related litigation costs and recoveries, and amortization of the step-up in the carrying value of inventory.	
 
(b)	To give effect to the following adjustments:	

(in thousands)	  	Adjustments	 	
 	 	
Pro forma cash interest expense(1)	  	$	91,729	  	
Pro forma amortization of deferred financing costs(1)	  	 	9,602	  	
Less recorded interest expense, net	  	 	(92,833	) 	
 	  	 	 	 	
Total pro forma adjustment to interest expense, net	  	$	8,498	  	

(1)	To record a full year of interest expense associated with borrowings under the term loan facility and notes, and the amortization of deferred financing costs. Pro forma cash interest expense reflects a weighted-average interest rate of 5.6%.	
 
(c)	To reflect our expected annual effective tax rate of approximately 39%.	
 
8

Exhibit (4)
J.Crew Group, Inc.
Condensed Consolidated Balance Sheets
(unaudited)

(in thousands)	  	February 2, 2013	 	  	January 28, 2012	 	
 	 	 	
Assets	  	 	 	 	  	 	 	 	
Current assets:	  	 	 	 	  	 	 	 	
Cash and cash equivalents	  	$	68,399	  	  	$	221,852	  	
Inventories	  	 	265,628	  	  	 	242,659	  	
Prepaid expenses and other current assets	  	 	65,791	  	  	 	58,023	  	
Prepaid income taxes	  	 	11,620	  	  	 	4,087	  	
 	  	 	 	 	  	 	 	 	
Total current assets	  	 	411,438	  	  	 	526,621	  	
 	 	 	
Property and equipment, net	  	 	324,111	  	  	 	264,572	  	
 	 	 	
Favorable lease commitments, net	  	 	35,104	  	  	 	48,930	  	
 	 	 	
Deferred financing costs, net	  	 	51,851	  	  	 	58,729	  	
 	 	 	
Intangible assets, net	  	 	975,517	  	  	 	985,322	  	
 	 	 	
Goodwill	  	 	1,686,915	  	  	 	1,686,915	  	
 	 	 	
Other assets	  	 	1,778	  	  	 	2,433	  	
 	  	 	 	 	  	 	 	 	
Total assets	  	$	3,486,714	  	  	$	3,573,522	  	

Liabilities and Stockholders’ Equity	  	 	 	 	  	 	 	 	
Current liabilities:	  	 	 	 	  	 	 	 	
Accounts payable	  	$	141,119	  	  	$	158,116	  	
Other current liabilities	  	 	153,743	  	  	 	116,339	  	
Interest payable	  	 	18,812	  	  	 	26,735	  	
Deferred income taxes, net	  	 	—  	  	  	 	—  	  	
Current portion of long-term debt	  	 	12,000	  	  	 	15,000	  	
 	  	 	 	 	  	 	 	 	
Total current liabilities	  	 	325,674	  	  	 	316,190	  	
 	 	 	
Long-term debt	  	 	1,567,000	  	  	 	1,579,000	  	
 	 	 	
Unfavorable lease commitments and deferred credits	  	 	71,146	  	  	 	53,700	  	
 	 	 	
Deferred income taxes, net	  	 	392,984	  	  	 	410,515	  	
 	 	 	
Other liabilities	  	 	38,419	  	  	 	37,065	  	
 	 	 	
Stockholders’ equity	  	 	1,091,491	  	  	 	1,177,052	  	
 	  	 	 	 	  	 	 	 	
Total liabilities and stockholders’ equity	  	$	3,486,714	  	  	$	3,573,522	  	

9

Exhibit (5)
J.Crew Group, Inc.
Reconciliation of Adjusted EBITDA
Non-GAAP Financial Measure
The following table reconciles net income reflected on the Company’s condensed consolidated statements of operations for the fourth quarter to: (i) Adjusted EBITDA (a non-GAAP measure), (ii) cash flows from operating activities (prepared in accordance with GAAP) and (iii) cash and cash equivalents as reflected on the condensed consolidated balance sheet (prepared in accordance with GAAP).

(in millions)	  	Fourth Quarter
Fiscal 2012	 	 	Fourth Quarter
Fiscal 2011	 	
 	 	 	
Net income	  	$	10.2	  	 	$	15.1	  	
Provision for income taxes	  	 	4.4	  	 	 	1.4	  	
Interest expense, net	  	 	26.8	  	 	 	25.1	  	
Depreciation and amortization	  	 	22.6	  	 	 	20.3	  	
 	  	 	 	 	 	 	 	 	
EBITDA	  	 	64.0	  	 	 	61.9	  	
 	  	 	 	 	 	 	 	 	
Share-based compensation	  	 	2.0	  	 	 	1.0	  	
Amortization of inventory step-up	  	 	—  	  	 	 	1.7	  	
Amortization of lease commitments	  	 	2.1	  	 	 	2.7	  	
Sponsor monitoring fees	  	 	2.3	  	 	 	2.0	  	
Transaction-related litigation	  	 	—  	  	 	 	(9.8	) 	
 	  	 	 	 	 	 	 	 	
Adjusted EBITDA	  	 	70.4	  	 	 	59.5	  	
 	  	 	 	 	 	 	 	 	
Taxes paid	  	 	(17.8	) 	 	 	(17.4	) 	
Interest paid	  	 	(17.9	) 	 	 	(7.6	) 	
Changes in working capital	  	 	65.9	  	 	 	74.7	  	
 	  	 	 	 	 	 	 	 	
Cash flows from operating activities	  	 	100.6	  	 	 	109.2	  	
Cash flows from investing activities	  	 	(22.4	) 	 	 	(24.0	) 	
Cash flows from financing activities	  	 	(205.5	) 	 	 	(6.1	) 	
 	  	 	 	 	 	 	 	 	
Increase (decrease) in cash	  	 	(127.3	) 	 	 	79.1	  	
Cash and cash equivalents, beginning	  	 	195.7	  	 	 	142.7	  	
 	  	 	 	 	 	 	 	 	
Cash and cash equivalents, ending	  	$	68.4	  	 	$	221.8	  	
 	  	 	 	 	 	 	 	 	
We present Adjusted EBITDA, a non-GAAP financial measure, because we use such measure to: (i) monitor the performance of our business, (ii) evaluate our liquidity, and (iii) determine levels of incentive compensation. We believe the presentation of this measure will enhance the ability of our investors to analyze trends in our business, evaluate our performance relative to other companies in the industry, and evaluate our ability to service debt.
Adjusted EBITDA is not a presentation made in accordance with generally accepted accounting principles, and therefore, differences may exist in the manner in which other companies calculate this measure. Adjusted EBITDA should not be considered an alternative to (i) net income, as a measure of operating performance, or (ii) cash flows, as a measure of liquidity. Adjusted EBITDA has important limitations as an analytical tool and should not be considered in isolation to, or as a substitute for, analysis of the Company’s results as measured in accordance with GAAP.
 
10

Exhibit (6)
J.Crew Group, Inc.
Reconciliation of Adjusted EBITDA
Non-GAAP Financial Measure
The following table reconciles net income reflected on the Company’s condensed consolidated statements of operations for fiscal 2012 (which is presented on a pro forma basis last year) to: (i) Adjusted EBITDA (a non-GAAP measure), (ii) cash flows from operating activities (prepared in accordance with GAAP) and (iii) cash and cash equivalents as reflected on the condensed consolidated balance sheet (prepared in accordance with GAAP).

(in millions)	  	Fiscal 2012	 	 	Pro forma
Fiscal 2011	 	
 	 	 	
Net income	  	$	96.1	  	 	$	51.5	  	
Provision for income taxes	  	 	55.9	  	 	 	32.9	  	
Interest expense, net	  	 	101.7	  	 	 	101.4	  	
Depreciation and amortization	  	 	82.2	  	 	 	74.2	  	
 	  	 	 	 	 	 	 	 	
EBITDA	  	 	335.9	  	 	 	260.0	  	
 	  	 	 	 	 	 	 	 	
Share-based compensation	  	 	5.3	  	 	 	4.4	  	
Amortization of lease commitments	  	 	9.3	  	 	 	9.8	  	
Sponsor monitoring fees	  	 	9.1	  	 	 	8.0	  	
 	  	 	 	 	 	 	 	 	
Adjusted EBITDA	  	 	359.6	  	 	 	282.2	  	
 	  	 	 	 	 	 	 	 	
Taxes paid	  	 	(74.1	) 	 	 	(35.5	) 	
Interest paid	  	 	(99.2	) 	 	 	(56.0	) 	
Changes in working capital	  	 	8.0	  	 	 	(45.5	) 	
 	  	 	 	 	 	 	 	 	
Cash flows from operating activities	  	 	194.3	  	 	 	145.2	  	
Cash flows from investing activities	  	 	(132.0	) 	 	 	(3,077.5	) 	
Cash flows from financing activities	  	 	(215.7	) 	 	 	2,772.7	  	
 	  	 	 	 	 	 	 	 	
Decrease in cash	  	 	(153.4	) 	 	 	(159.6	) 	
Cash and cash equivalents, beginning	  	 	221.8	  	 	 	381.4	  	
 	  	 	 	 	 	 	 	 	
Cash and cash equivalents, ending	  	$	68.4	  	 	$	221.8	  	

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Exhibit (7)
Actual and Projected Store Count and Square Footage

 	  	Fiscal 2012 (Actual)	 	
Quarter	  	Total stores open at
beginning of the
quarter	 	  	Number of stores
opened during
the quarter (1)	 	  	Number of stores closed
during the quarter (1)	 	 	Total stores open at end
of the quarter	 	
1st Quarter	  	 	362	  	  	 	11	  	  	 	(1	) 	 	 	372	  	
2nd Quarter	  	 	372	  	  	 	6	  	  	 	(2	) 	 	 	376	  	
3rd Quarter	  	 	376	  	  	 	16	  	  	 	—  	  	 	 	392	  	
4th Quarter	  	 	392	  	  	 	13	  	  	 	(4	) 	 	 	401	  	

 	  	Fiscal 2012 (Actual)	 	
Quarter	  	Total gross square feet
at beginning of the
quarter	 	  	Gross square feet for
stores opened or
expanded during the
quarter	 	  	Reduction of gross
square feet for stores
closed or downsized
during the quarter	 	 	Total gross square feet
at end of the quarter	 	
1st Quarter	  	 	2,138,663	  	  	 	44,157	  	  	 	(3,911	) 	 	 	2,178,909	  	
2nd Quarter	  	 	2,178,909	  	  	 	38,575	  	  	 	(4,446	) 	 	 	2,213,038	  	
3rd Quarter	  	 	2,213,038	  	  	 	85,421	  	  	 	(327	) 	 	 	2,298,132	  	
4th Quarter	  	 	2,298,132	  	  	 	62,838	  	  	 	(30,283	) 	 	 	2,330,687	  	

 	  	Fiscal 2013 (Projected)	 	
 	  	Total stores open at
beginning of the year	 	  	Number of stores
opened during the
year (2)	 	  	Number of stores closed
during the year (2)	 	 	Total stores open at end
of the year	 	
Fiscal year	  	 	401	  	  	 	46	  	  	 	(1	) 	 	 	446	  	

 	  	Fiscal 2013 (Projected)	 	
 	  	Total gross square feet
at beginning of the year	 	  	Gross square feet for
stores opened or
expanded during the
year	 	  	Reduction of gross
square feet for stores
closed or  downsized
during the year	 	 	Total gross square feet
at end of the year	 	
Fiscal year	  	 	2,330,687	  	  	 	236,455	  	  	 	(5,012	) 	 	 	2,562,130	  	
 
(1)	Actual number of stores opened or closed during fiscal 2012 by channel are as follows:	
Q1 – Three retail, one international retail, and seven Madewell stores. Closed one crewcuts store.
Q2 – Three retail, one international retail, one factory, and one Madewell store. Closed one crewcuts and one Madewell store.
Q3 – Six retail, one international retail, four factory, one international factory, and four Madewell stores.
Q4 – Three retail, one international retail, three factory, one international factory, and five Madewell stores. Closed four retail stores.
 
(2)	Projected number of stores to be opened or closed during fiscal 2013 by channel are as follows:	

 	  	Retail	 	 	Factory	 	  	Madewell	 	  	International
Retail	 	  	International
Factory	 	  	Total	 	
Open	  	 	11	  	 	 	12	  	  	 	17	  	  	 	5	  	  	 	1	  	  	 	46	  	
Close	  	 	(1	) 	 	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	—  	 	  	 	(1	) 	
 	  	 	 	 	 	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	  	 	 	 	
Net	  	 	10	  	 	 	12	  	  	 	17	  	  	 	5	  	  	 	1	  	  	 	45	  	

12