US retail corporation Express has filed for bankruptcy this week due to flagging sales and revenue loss year after year.
Chapter 11 Bankruptcy for Express
Clothing retailer Express Inc. has officially filed for Chapter 11 bankruptcy and announced plans to shutter up to 100 stores.
Not Moving With the Times?
With a portfolio that includes Express, Bonobos, and UpWest Express, it appears the retailer has failed to move with the times and to keep consumers, who are spoilt for choice, interested in their brands.
100 Stores Closing
The corporation, which operates more than 500 stores in the US, filed for bankruptcy in Delaware and announced its intentions to close 95 Express stores and all remaining UpWest Express stores.
Interim CFO Made Official CFO
Interim CFO Mark Still was also named as official CFO of the corporation during the announcement, effective immediately.
Meaningful Progress Made
“We continue to make meaningful progress refining our product assortments, driving demand, connecting with customers, and strengthening our operations,” said CEO Stewart Glendinning.
Strengthening Their Financial Position
“We are taking an important step that will strengthen our financial position and enable Express to continue advancing our business initiatives,” he continued.
$35 Million from Lenders
One of these steps notably included a $35 million financing package from lenders, and a proposed agreement to sell a portion of its operations to WHP Global, which would “better position the business for profitable growth and maximize value for our stakeholders,” according to Glendinning.
WHP Global Get Involved
WHP Global is a global brand management firm that specializes in the “fashion, hardgoods, and athletic sectors,” according to its official website, and owns brands like Toys “R” Us and Anne Klein.
“Contemporary Values and Style”
The CEO made it clear that despite the bankruptcy setup, Express Inc. has every intention of moving forward with the “contemporary values and style” that their customers are used to.
Their Top Priority
“Express has a strong portfolio of brands and a premier omnichannel platform,” he continued. “Our top priority remains providing our customers with the contemporary styles and value they expect from us.”
Failure to Keep Up
For years the company, which has been in operation since the 1980s, has failed to keep up with changing consumer trends and interests and to remain competitive and relevant in an increasingly over-saturated US market.
Significant Losses
It seemed like a never-ending downhill slope for the retailer, which tripled its losses year-over-year between 2022 and 2023. By October 2023 it has lost $154 million across 39 weeks.
Delisted from the NYSE
To make matters worse, in March 2024 the New York Stock Exchange informed Express that its common stock was going to be delisted and trading would be suspended.
No Surprises to Some
Analysts are not surprised by the announcement, as signs of growing trouble have been appearing in recent years. In August last year, Express Inc shared its plans to lay off 150 employees throughout 2024.
Cost-Cutting Plans
The layoffs were part of a wider company plan to reduce expenses and save up to $30 million, one-quarter of an overall initiative to reduce costs by $120 million.
“Obvious for Quite Some Time”
Neil Saunders, managing director of data analytics and consulting company GlobalData, said that it had been “obvious for quite some time that bankruptcy was the inevitable destination for Express,” due to years of “struggling to gain traction with consumers.”
Not All Express’ Fault
The expert data analyst gave some credit to Express, claiming that some factors were outside of the corporation’s control. He pointed to the “formal and smart casual market for both men and women [which] has softened over recent years because of a rise from working from home and the casualization of fashion.”
Damning Words From Analysts
However, despite clearly failing to keep up with evolving trends, Express Inc. “made too little effort to adapt” and “has become less relevant to shoppers,” in Saunders’ own words.
Starting With the Pandemic
Express Inc. has faced accelerated business troubles since the beginning of the Covid-19 pandemic. In 2020 their sales dropped by 40% due to the forced closures of some stores during the pandemic.
Will It Be Enough?
Only time will tell if these recent financial woes will be enough to force the Ohio-based umbrella corporation in the right direction.
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The content of this article is for informational purposes only and does not constitute or replace professional financial advice.
