Express, a multi-brand fashion retailer, has filed for Chapter 11 bankruptcy and plans to close over 100 stores as part of a strategic move to position the company for stronger growth in the future. The company has been facing challenges in keeping up with consumer preferences, standing out in the market, and competing in a saturated U.S. retail landscape. To save costs, Express had previously laid off 150 employees in 2023, but that was only a portion of the planned $120 million cost reduction effort.
By October 2023, Express had tripled its losses compared to the previous year, totaling over $154 million in losses for 39 weeks. Sales were down 5.6%, inventory was up 32%, and gross margins had dropped from 30% in 2022 to 21.5% in October 2023. The company has filed for bankruptcy protection and is operating under debtor in possession status, allowing it to restructure its finances. In March 2024, Express was notified by the New York Stock Exchange that its common stock would be delisted and trading of its stock was suspended.
Express is looking to secure funding that could potentially save the business in the long term, with a non-binding letter of intent received from a consortium led by WHP Global, Simon Property Group, and Brookfield Properties. WHP Global, which does over $7 billion in sales, has previously revived brands like Toys R Us and recently announced a partnership with Kohl’s. The agreement includes opening Baby R Us shops within Kohl’s stores and offering products on Kohls.com. WHP Global is also bringing the Lotto brand to the U.S. market through a deal with Dick’s Sporting Goods.
Mark Still has been named as the new CFO of Express, with a commitment of $35 million in new financing from existing lenders and $49 million in cash received from the Internal Revenue Service related to the CARES Act. In 2020, Express experienced a 40% drop in revenue due to the pandemic, resulting in over $800 million in sales losses for the year. Currently, the company operates 530 Express retail and Express Factory Outlet stores in the United States and Puerto Rico, as well as online stores and Bonobos Guideshop locations.
The company’s decision to file for bankruptcy and close stores is part of a larger effort to reposition Express for future growth. With the support of WHP Global, Simon Property Group, and Brookfield Properties, Express aims to navigate its financial challenges and emerge stronger from this restructuring process. The challenges faced by Express, including declining sales and increasing losses, highlight the difficulties that traditional retail brands are facing in a rapidly evolving industry landscape. By taking bold steps to address these issues, Express is working towards a more sustainable and successful future in the competitive fashion retail market.
