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News Release

J. Crew Group, Inc. Announces Third Quarter Fiscal 2006 Results

              Third Quarter Revenues Rise 23% to $275.6 million

               Operating Income Increases 51% to $33.2 million

                     Company Raises Fiscal 2006 Guidance

NEW YORK, Nov. 21 /PRNewswire-FirstCall/ -- J. Crew Group, Inc. (NYSE: JCG) today announced financial results for the three and nine months ended October 28, 2006.

    For the three months ended October 28, 2006:

    -- Revenues increased 23% to $275.6 million. Store sales (Retail and
       Factory) increased 26% to $202.2 million, with comparable store sales
       increasing 19%. Comparable store sales rose 3% in the third quarter of
       fiscal 2005. Direct sales (Internet and Catalog) rose by 18% to
       $66.3 million.

    -- Operating income increased 51% to $33.2 million, compared to
       $22.0 million in the third quarter of fiscal 2005.

    -- Net income applicable to common stockholders was $26.0 million, or
       $0.40 per diluted share, compared to a net loss of $(0.3) million, or
       $(0.01) per diluted share, in the third quarter of fiscal 2005. Net
       income in the third quarter of fiscal 2006 includes $0.5 million of
       stock option expense related to the adoption of SFAS 123(R), which was
       not applicable in fiscal 2005.

    -- Adjusted net income for the third quarter of fiscal 2006 totaled
       $17.2 million or $0.27 per diluted share.  A reconciliation of net
       income on a GAAP basis to adjusted net income is included in Exhibit
       (3) of this press release.

Millard Drexler, J. Crew's Chairman and CEO stated: "We are pleased to report a 51% increase in third quarter operating income. Our results were driven by better than expected sales gains across each of our channels, demonstrating solid execution and the strength of the J. Crew brand. Due to this better than expected performance, we are raising our outlook for fiscal 2006. We remain focused on satisfying our customers."

    For the nine months ended October 28, 2006:

    -- Revenues increased 18% to $785.4 million.  Store sales (Retail and
       Factory) increased 21% to $566.7 million, with comparable store sales
       increasing 16%. Comparable store sales rose 16% in the first nine
       months of 2005. Direct sales (Internet and Catalog) increased 12% to
       $195.4 million.

    -- Operating income increased 36% to $88.3 million, compared to
       $65.1 million in the first nine months of fiscal 2005.

    -- Net income applicable to common stockholders was $27.7 million, or
       $0.62 per diluted share, compared to a loss of $(0.4) million, or
       $(0.02) per diluted share in the first nine months of fiscal 2005. Net
       income for the first nine months of fiscal 2006 includes pre-tax
       charges of $10.0 million related to the refinancing of debt and
       $1.5 million of stock option expense related to the adoption of SFAS
       123(R), which was not applicable in fiscal 2005.

    -- Adjusted net income for the first nine months of fiscal 2006 totaled
       $44.7 million, or $0.70 per diluted share.

    Guidance

The Company currently expects fiscal 2006 diluted earnings per share in the range of $0.95 to $0.97. This compares to the Company's previously announced earnings guidance range of $0.86 to $0.88 per diluted share.

Use of Non-GAAP Financial Measures

In addition to providing financial results in accordance with GAAP, the Company has provided non-GAAP adjusted interest expense, loss on refinancing of debt, income taxes, net income, preferred stock dividends and earnings per share information for the three months and nine months ended October 28, 2006 in this release. This information reflects, on a non-GAAP adjusted basis, the Company's adjusted interest expense, loss on refinancing of debt, income taxes, net income, preferred stock dividends and earnings per diluted share after excluding the effects of transactions which resulted from the Company's recent initial public offering, refinancings and adjusted tax rates. This non-GAAP financial information is provided to enhance the user's overall understanding of the Company's current financial performance. Specifically, the Company believes the non-GAAP adjusted results provide useful information to both management and investors by excluding expenses that the Company believes are not indicative of the Company's future results. The non-GAAP financial information should be considered in addition to, not as a substitute for or as being superior to, net income, earnings per share or other measures of financial performance prepared in accordance with GAAP. This non-GAAP information and a reconciliation of this information to GAAP amounts for the three and nine months ended October 28, 2006 are included in Exhibit (3).

Conference Call Information

A conference call to discuss third quarter results is scheduled for today, November 21, 2006, at 4:30 PM Eastern Time. Investors and analysts interested in participating in the call are invited to dial (800) 811-8824 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 November 28, 2006 and can be accessed by dialing (888) 203-1112 and entering code 7128427.

About J. Crew Group Inc.

J. Crew Group, Inc. is a nationally recognized multi-channel retailer of women's and men's apparel, shoes and accessories. As of November 21, 2006, the Company operates 176 retail stores, the J. Crew catalog business, jcrew.com, and 51 factory outlet stores. Additionally, certain product, press release and SEC filing information concerning the Company are available at the Company's website www.jcrew.com.

Forward-Looking Statements:

Certain statements herein 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 the Company's 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 the strength of the economy, changes in the overall level of consumer spending or preferences in apparel, the performance of the Company's products within the prevailing retail environment, trade restrictions, political or financial instability in countries where the Company's goods are manufactured, postal rate increases, paper and printing costs, availability of suitable store locations at appropriate terms and other factors which are set forth in the Company's Form 10-K and in all filings with the SEC made by the Company subsequent to the filing of the Form 10-K. The Company does not undertake to publicly update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.



                                                                   Exhibit (1)

                     J. Crew Group, Inc. and Subsidiaries
                      Condensed Statements of Operations
                                 (Unaudited)


    (Amounts in thousands,
      except percentages
      and per share
      amounts)             Three        Three        Nine         Nine
                           Months       Months       Months       Months
                           Ended        Ended        Ended        Ended
                         October 28,  October 29,  October 28,  October 29,
                            2006         2005         2006          2005
    Net sales
      Stores              $202,174     $160,825     $566,708     $468,692
      Direct                66,346       56,407      195,379      174,457
                           268,520      217,232      762,087      643,149
    Other                    7,055        6,130       23,343       20,114
    Total Revenues         275,575      223,362      785,430      663,263

    Costs of goods sold,
     buying and occupancy
     costs                 147,703      125,513      434,944      371,948
    Gross Profit           127,872       97,849      350,486      291,315
      As a percent of
      revenues                46.4%        43.8%        44.6%        43.9%

    Selling, general
     administrative
     expenses               94,690       75,843      262,188      226,180
      As a percent of
       revenues               34.4%       34.0%        33.4%        34.1%
    Operating income        33,182      22,006       88,298       65,135
      As a percent of
       revenues               12.0%        9.9%        11.2%         9.8%

    Interest expense, net    5,172       18,478       40,028       53,878

    Loss on refinancing
     of debt                  ----         ----       10,039         ----

    Income before income
     taxes                  28,010        3,528       38,231       11,257

    Provision for income
     taxes                   2,000          500        4,400        1,600

    Net income              26,010        3,028       33,831        9,657

    Preferred stock
     dividends                ----       (3,364)      (6,141)     (10,092)

    Net income (loss)
     applicable to common
     shareholders          $26,010        ($336)     $27,690        ($435)

    Income (loss) per
     share:
      Basic                  $0.45       ($0.01)       $0.69       ($0.02)
      Diluted                $0.40       ($0.01)       $0.62       ($0.02)

    Weighted average shares
     outstanding:
    Basic                   58,036       24,726       39,968       24,364
    Diluted                 64,657       24,726       44,846       24,364



                                                                   Exhibit (2)

                     J. Crew Group, Inc. and Subsidiaries
                    Condensed Consolidated Balance Sheets


    (Amounts in thousands)                         October 28,     October 29,
                                                      2006            2005
                                                   (Unaudited)    (Unaudited)
    Assets
    Current assets:
     Cash and cash equivalents                       $72,475        $28,421
     Inventories                                     174,687        160,669
     Prepaid expenses and other currents assets       38,744         35,898
    Total current assets                             285,906        224,988

    Property and equipment, net                      113,925        112,090

    Other assets                                      14,074         13,220
    Total assets                                    $413,905       $350,298

    Liabilities and Stockholders' deficit
    Current liabilities:
     Accounts payable                                $85,334        $97,446
     Other current liabilities                        64,341         62,613
     Income taxes payable                              5,087          1,620
     Current portion of long-term debt                 2,850           ----
    Total current liabilities                        157,612        161,679

    Long-term debt                                   247,150        617,423

    Deferred credits                                  64,278         56,751

    Preferred stock                                     ----         92,800

    Stockholders' deficit                            (55,135)      (578,355)
    Total liabilities and stockholders' deficit     $413,905       $350,298



                                                                   Exhibit (3)

    Reconciliation of net income on a GAAP basis to "Adjusted net income"


                                  Three Months Ended October 28, 2006
    (Amounts in thousands,
    except percentages and
    per share amounts)       GAAP Basis       Adjustments        As Adjusted
    Total Revenues            $275,575           ----              $275,575

    Cost of goods sold,
     buying and occupancy
     costs                     147,703           ----               147,703

    Gross profit               127,872           ----               127,872

    Selling, general
     administrative expenses    94,690           ----                94,690

    Operating income            33,182           ----                33,182

    Interest expense, net        5,172           ----                 5,172

    Loss on refinancing of
     debt                         ----           ----                  ----
    Income before income
     taxes                      28,010           ----                28,010

    Provision for income
     taxes                       2,000           8,812 (c)           10,812
    Net income                  26,010          (8,812)              17,198

    Preferred stock
     dividends                    ----            ----                 ----
    Net income applicable to
     common shareholders       $26,010         ($8,812)             $17,198


    Earnings per share:
         Basic                   $0.45          ($0.15)               $0.30
         Diluted                 $0.40          ($0.13)               $0.27

    Weighted average shares
     outstanding:
         Basic                  58,036            ----               58,036
         Diluted                64,657            ----               64,657


                                  Nine Months Ended October 28, 2006
    (Amounts in thousands,
    except percentages and
    per share amounts)       GAAP Basis       Adjustments        As Adjusted
    Total Revenues            $785,430            ----             $785,430

    Cost of goods sold,
     buying and
     occupancy costs           434,944            ----              434,944

    Gross profit               350,486            ----              350,486

    Selling, general
     administrative expenses   262,188            ----              262,188

    Operating income            88,298            ----               88,298

    Interest expense, net       40,028         (24,556) (a)          15,472

    Loss on refinancing of
     debt                       10,039         (10,039) (b)           ----
    Income before income
     taxes                      38,231          34,595              72,826

    Provision for income
     taxes                       4,400          23,711 (c)          28,111
    Net income                  33,831          10,884              44,715

    Preferred stock dividends   (6,141)          6,141 (c)            ----
    Net income applicable to
     common shareholders       $27,690         $17,025             $44,715


    Earnings per share:
         Basic                   $0.69           $0.08               $0.77
         Diluted                 $0.62           $0.08               $0.70

    Weighted average shares
     outstanding:
         Basic                  39,968          17,911 (e)          57,879
         Diluted                44,846          19,439 (e)          64,285

    (a) to adjust interest expense for (i) the redemption of all outstanding
        preferred stock, (ii) the conversion of the 5% notes payable into
        common stock, (iii) the redemption of $21.7 million of the 13 1/8%
        debentures, (iv) the repayment of $275.0 million aggregate principal
        amount of 9 3/4% notes with the proceeds of the $285.0 million senior
        term loan, (v) the repayment of $35.0 million of the senior term loan
        with the proceeds of the IPO completed in July 2006 and (vi) the
        amortization of deferred financing costs related to the term loan
        entered into in May 2006, assuming each of these transactions had been
        completed at the beginning of the fiscal year.

    (b) to eliminate the loss on refinancing of debt.

    (c) to adjust the provision for income taxes to reflect the Company's
        estimated future ongoing effective tax rate of 38.6%.  The expected
        increase in the Company's effective tax rate occurs primarily because
        the net operating loss carryovers which were generated primarily as a
        result of the Company's highly leveraged capital structure prior to
        the IPO should be substantially utilized by the end of fiscal 2006 and
        therefore the current effective tax rate is not reflective of the
        Company's ongoing effective tax rate.

    (d) to reflect the redemption of $92.8 million of Series A preferred
        stock.

    (e) to reflect the number of common shares outstanding after the IPO on a
        basic and diluted basis.



                                                             Exhibit (4)

                   Projected Store Count and Square Footage

                  Total        Number of     Number of   Total
                  stores       stores        stores      stores
                  open at      opened        closed      open
                  beginning    during        during      at end
                  of the       the           the         of the
     Quarter      quarter      quarter       quarter     quarter

    1st Quarter
     (Actual)       203            5            2          206

    2nd Quarter
     (Actual)       206           10            0          216

    3rd Quarter
     (Actual)       216           11            1          226

    4th Quarter
     (Projected)    226            3            1          228


                  Total         Gross          Reduction of      Total
                  gross         square         gross square      gross
                  square        feet for       feet for          square
                  feet at       stores         stores closed     feet at
                  beginning     opened         or downsized      end of
                  of the        during         during the        the
     Quarter      quarter       the quarter    quarter           quarter

    1st Quarter
     (Actual)     1,478,384       25,474        (14,500)       1,489,358

    2nd Quarter
     (Actual)     1,489,358       42,147         (2,137)       1,529,368

    3rd Quarter
     (Actual)     1,529,368       43,280        (10,768)       1,561,880

    4th Quarter
     (Projected)  1,561,880       11,481        (14,190)       1,559,171

SOURCE J. Crew Group, Inc.
CONTACT: James Scully, Chief Financial Officer, J. Crew Group, +1-212- 209-8040; or Investor Contact: Allison Malkin/Chad Jacobs/Joe Teklits, Integrated Corporate Relations, +1-203-682-8200/

Certain statements herein 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 the Company's 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 the strength of the economy, changes in the overall level of consumer spending or preferences in apparel, the performance of the Company's products within the prevailing retail environment, trade restrictions, political or financial instability in countries where the Company's goods are manufactured, postal rate increases, paper and printing costs, availability of suitable store locations at appropriate terms and other factors which are set forth in the Company's Form 10-K and in all filings with the SEC made by the Company subsequent to the filing of the Form 10-K. The Company does not undertake to publicly update or revise its forward-looking statements, whether as a result of new information, future events or otherwise.