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News Release

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

August 24, 2006 at 4:03 PM EDT

              Second Quarter Revenues Rise 17% to $269.2 million

        Second Quarter Operating Income Increases 33% to $26.8 million

NEW YORK, Aug. 24 /PRNewswire-FirstCall/ -- J.Crew Group, Inc. (NYSE: JCG), today announced financial results for the three and six months ended July 29, 2006.

    For the three months ended July 29, 2006:

    - Revenues for the second quarter increased 17% to $269.2 million from
      $229.4 million in the second quarter of fiscal 2005. Store sales (Retail
      and Factory) increased 21% to $197.4 million, with comparable store
      sales increasing 16%. Comparable store sales rose 15% in the second
      quarter of fiscal 2005. Direct sales (Internet and Catalog) for the
      second quarter rose by 7% to $62.8 million.

    - Operating income increased 33% to $26.8 million compared to
      $20.1 million in the second quarter of fiscal 2005.

    - Net loss applicable to common stockholders was $2.8 million, or $(0.08)
      per diluted share, compared to $1.6 million, or $(0.07) per diluted
      share in the second quarter of fiscal 2005. Net loss in the second
      quarter of fiscal 2006 includes pre-tax charges of $10.0 million related
      to the refinancing of debt and $0.5 million for stock option expense
      related to SFAS 123(R) which was not applicable in fiscal 2005.
      Excluding these items net income would have been $7.2 million, or
      $0.20 per diluted share.

Millard Drexler, J.Crew's Chairman and CEO stated: "We are pleased with our second quarter results, and look forward to building on the new foundation we have created for J.Crew Group. Our team is focused on driving productivity across all areas of the business, and we are confident about our near and long-term prospects."

Adjusted net income for the second quarter of fiscal 2006 totaled $13.3 million, or $0.21 per diluted share. Adjusted net income:

    (i)   assumes the Company's initial public offering occurred at
          April 29, 2006,
    (ii)  excludes $10.0 million in costs associated with the refinancing of
          debt; and
    (iii) adjusts the effective tax rate.

On July 3, 2006, J.Crew Group, Inc. closed its initial public offering of common stock in which the Company sold 21.6 million shares raising net proceeds of $402.3 million. Subsequent to the closing, Texas Pacific Group acquired an additional 3.7 million shares with $73.5 million of proceeds from the redemption of preferred stock.

    For the six months ended July 29, 2006:

    - Revenues for the first six months of fiscal 2006 increased 16% to
      $509.9 million from $439.9 million in the six months of fiscal 2005.
      Store sales (Retail and Factory) increased 18% to $364.5 million in the
      first half of fiscal 2006, with comparable store sales increasing 14%.
      Comparable store sales rose 24% in the first half of 2005. Direct sales
      (Internet and Catalog) for the first half of 2006 increased by 9% to
      $129.0 million.

    - Operating income increased 28% to $55.1 million compared to
      $43.1 million in the first half of fiscal 2005.

    - Net income applicable to common stockholders was $1.7 million, or $0.05
      per diluted share, compared to a net loss of $0.1 million, or $0.00 per
      diluted share in the first half of fiscal 2005. Net income for the first
      six months of fiscal 2006 includes pre-tax charges of $10.0 million
      related to the refinancing of debt and $1.0 million related to stock
      option expense related to SFAS 123(R) which was not applicable in fiscal
      2005.  Excluding these items net income would have been $11.8 million or
      $0.34 per diluted share.

    - Adjusted net income for the six months of fiscal 2006 totaled
      $27.5 million, or $0.43 per diluted share.

A reconciliation of net income on a GAAP basis to adjusted net income is included in Exhibits (3) and (4).

Long Term Growth Targets

The Company noted that its annual long term growth targets include: (i) mid single digit comparable Store sales increase; (ii) high single digit Direct sales growth; (iii) 7% - 9% net square footage expansion; and (iv) EPS growth in excess of 20%.

Use of Non-GAAP Financial Measures

The Company has provided non-GAAP adjusted interest expense, loss on refinancing of debt, income taxes, net income, preferred stock dividends and earnings per diluted share information for the three months and six months ended July 29, 2006 in this release, in addition to providing financial results in accordance with GAAP. 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 months and six months ended July 29, 2006 are included in Exhibits (3) and (4).

Conference Call Information

A conference call to discuss second quarter results is scheduled for today August 24, 2006 at 4:30 PM Eastern Time. Investors and analysts interested in participating in the call are invited to dial (800) 811-0667 approximately ten minutes prior to the start of the call. The conference call will also be web-cast live at www.jcrew.com. A replay of this call will be available until August 31, 2006 and can be accessed by dialing (888) 203-1112 and entering code 3641798.

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 and accessories. As of August 24, 2006, the Company operates 169 retail stores, the J.Crew catalog business, jcrew.com, and 50 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 Consolidated Statements of Operations
                                 (Unaudited)

                                         Three     Three      Six       Six
                                         Months    Months    Months    Months
                                         Ended     Ended     Ended     Ended
    (Amounts in thousands, except       July 29,  July 30,  July 29,  July 30,
     percentages and per share amounts)   2006      2005      2006      2005

    Net Sales:
       Stores                          $197,410  $162,659  $364,535  $307,867
       Direct                            62,823    58,679   129,033   118,050
                                        260,233   221,338   493,568   425,917
    Other                                 8,936     8,028    16,288    13,984
    Total revenues                      269,169   229,366   509,856   439,901

    Costs of goods sold, buying and
     occupancy costs                    155,951   132,346   287,244   246,435

    Gross profit                        113,218    97,020   222,612   193,466
      As a percent of revenues            42.1%     42.3%     43.7%     44.0%

    Selling, general and
     administrative expenses             86,399    76,877   167,498   150,337
      As a percent of revenues            32.1%     33.5%     32.9%     34.2%

    Operating income                     26,819    20,143    55,114    43,129
      As a percent of revenues            10.0%      8.8%     10.8%      9.8%

    Interest expense, net                15,660    17,911    34,856    35,400
    Loss on refinancing of debt          10,039        --    10,039        --
    Income before income taxes            1,120     2,232    10,219     7,729

    Provision for income taxes            1,100       500     2,400     1,100

    Net income                               20     1,732     7,819     6,629
    Preferred stock dividends            (2,777)   (3,364)   (6,141)   (6,728)
    Net income (loss) applicable to
     common stockholders               $ (2,757) $ (1,632)  $ 1,678   $   (99)

    Earnings per share:
       Basic                           $  (0.08) $  (0.07)  $  0.05   $  0.00
       Diluted                         $  (0.08) $  (0.07)  $  0.05   $  0.00

    Weighted average shares outstanding:
       Basic                             36,433    24,168    30,934    24,155
       Diluted                           36,433    24,168    34,670    24,155



                                                                   Exhibit (2)
                     J.Crew Group, Inc. and Subsidiaries
                    Condensed Consolidated Balance Sheets

                                                         July 29,    July 30,
                                                           2006        2005
                                                       (Unaudited) (Unaudited)
    (Amounts in thousands)
    Assets
    Current assets:
     Cash and cash equivalents                          $ 68,838   $  29,692
     Inventories                                         134,636     110,569
     Prepaid expenses and other current assets            34,463      31,945
    Total current assets                                 237,937     172,206

    Property and equipment, net                          109,923     113,466
    Other assets                                          14,637      13,194
    Total assets                                        $362,497   $ 298,866

    Liabilities and stockholders' deficit
    Current liabilities:
     Accounts payable                                   $ 78,610   $  71,327
     Other current liabilities                            51,582      52,760
     Income taxes payable                                  3,568       1,639
     Current portion of long term debt                     2,500     -------
    Total current liabilities                            136,260     125,726

    Long-term debt                                       247,500     603,475
    Deferred credits                                      61,457      57,191

    Preferred stock                                      -------      92,800

    Stockholders' deficit                                (82,720)   (580,326)
    Total liabilities and stockholders' deficit         $362,497   $ 298,866



                                                                   Exhibit (3)

Reconciliation of net income from GAAP basis to "Adjusted Net Income" for the three months ended July 29, 2006

                                      GAAP Basis    Adjustments    As Adjusted

    Total revenues                      $269,169     ---------       $269,169

    Cost of goods sold, buying
     and occupancy costs                 155,951     ---------        155,951

    Gross profit                         113,218     ---------        113,218

    Selling, general and
     administrative expenses              86,399     ---------         86,399

    Operating income                      26,819     ---------         26,819

    Interest expense, net                 15,660       (10,460)(a)      5,200

    Loss on refinancing of debt           10,039       (10,039)(b)    -------

    Income before income taxes             1,120        20,499         21,619

    Provision for income taxes             1,100         7,245 (c)      8,345

    Net income                                20        13,254         13,274

    Preferred stock dividends             (2,777)        2,777 (d)    -------

    Net income (loss) applicable
     to common stockholders             $ (2,757)     $ 16,031       $ 13,274

    Earnings per share:
      Basic                             $  (0.08)     $   0.31       $   0.23
      Diluted                           $  (0.08)     $   0.29       $   0.21

    Weighted average shares outstanding:
      Basic                               36,433        21,367 (e)     57,800
      Diluted                             36,433        27,667 (e)     64,100

    (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 9-3/4% notes with the
        proceeds of  the $285.0 million senior term loan, (v) the repayment of
        the $35.0 million of the senior term loan with the proceeds of the IPO
        and (vi) the amortization of deferring financing costs related to the
        new term loan
    (b) to eliminate the loss on refinancing of debt
    (c) the provision for income taxes on a GAAP basis reflects the non-
        deductibility of preferred stock dividends, the utilization of net
        operating loss carryovers and certain AMT adjustments; the provision
        for income taxes on an "as adjusted" basis reflects an effective tax
        rate of 38.6%, which would be expected to occur after giving effect to
        the exclusion of the aforementioned items which are not expected to
        occur on an ongoing basis.
    (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 offering
        on a basic and diluted basis


                                                                   Exhibit (4)

Reconciliation of net income from GAAP basis to "Adjusted Net Income" for the six months ended July 29, 2006

                                      GAAP Basis    Adjustments    As Adjusted

    Total revenues                      $509,856     $ --------       $509,856

    Cost of goods sold, buying
     and occupancy costs                 287,244       --------        287,244

    Gross profit                         222,612       --------        222,612

    Selling, general and
     administrative expenses             167,498       --------        167,498

    Operating income                      55,114       --------         55,114
    Interest expense, net                 34,856        (24,556)(a)     10,300
    Loss on refinancing of debt           10,039        (10,039)(b)   --------

    Income before income taxes            10,219         34,595         44,814

    Provision for income taxes             2,400         14,898 (c)     17,298

    Net income                             7,819         19,697         27,516

    Preferred stock dividends             (6,141)         6,141 (d)   --------

    Net income (loss) applicable
     to common stockholders             $  1,678         25,838       $ 27,516

    Earnings per share:
      Basic                             $    .05       $    .43       $    .48
      Diluted                           $    .05       $    .38       $    .43

    Weighted average shares outstanding:
      Basic                               30,934         26,866  (e)    57,800
      Diluted                             34,670         29,430  (e)    64,100

     (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 9-3/4% notes with
         the proceeds of  the $285.0 million senior term loan, (v) the
         repayment of the $35.0 million of the senior term loan with the
         proceeds of the IPO and (vi) the amortization of deferring financing
         costs related to the new term loan
     (b) to eliminate the loss on refinancing of debt
     (c) the provision for income taxes on a GAAP basis reflects the non-
         deductibility of preferred stock dividends, the utilization of net
         operating loss carryovers and certain AMT adjustments; the provision
         for income taxes on an "as adjusted" basis reflects an effective tax
         rate of 38.6%, which would be expected to occur after giving effect
         to the exclusion of the aforementioned items which are not expected
         to occur on an ongoing basis.
     (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 offering
         on a basic and diluted basis


    Exhibit 5: Fiscal 2006 Projected Store Count and Square Footage

                Total stores
                   open at    Number of stores  Number of stores  Total stores
                beginning of   opened during      closed during    open at end
    Quarter      the quarter    the quarter        the quarter     the quarter
    1st Quarter
     (Actual)       203              5                  2             206
    2nd Quarter
     (Actual)       206             10                  0             216
    3rd Quarter
     (Projected)    216             10                  0             226
    4th Quarter
     (Projected)    226              3                  1             228


                                                    Reduction of
                                                    gross square
                                                      feet for
                     Total gross    Gross square    stores closed  Total gross
                   square feet at  feet for stores  or downsized  square feet
                    beginning of   opened during       during       at end of
                    the quarter     the quarter      the quarter   the 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
     (Projected)      1,529,368         37,133         (11,688)     1,554,813
    4th Quarter
     (Projected)      1,554,813         11,485          (6,911)     1,559,387

SOURCE J.Crew Group, Inc.
CONTACT: Company Contact - James Scully, Chief Financial Officer, +1-212-209-8040; Investor Contact - Allison Malkin, Chad Jacobs, or Joe Teklits, all of 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.