Express Inc, a once-popular retailer known for its trendy office attire, has filed for Chapter 11 bankruptcy protection. The company, based in Columbus, Ohio, has struggled to keep up with competitors like Zara and H&M. As part of its bankruptcy filing, Express plans to sell the majority of its stores and close a significant number of outlets.
The closure of 95 Express retail stores and all 10 UpWest stores is expected to begin soon. However, the company assures customers that it will continue to operate its remaining stores and conduct business as usual. In addition, Express has received a non-binding letter of intent from a group led by consumer brand acquisition and management firm WHP Global to potentially purchase the majority of its stores and operations.
WHP Global’s offer is seen as a lifeline for Express, providing additional financial resources and a chance for the company to grow profitably. The consortium exploring the deal also includes mall operators Simon Property Group and Brookfield Properties, signaling potential support for Express’s future. Express CEO Stewart Glendinning expressed optimism about the proposed transaction, emphasizing the benefits it could bring to the company and its stakeholders.
Express currently operates around 530 retail and factory outlet stores in the United States and Puerto Rico, along with roughly 60 Bonobos Guideshop locations. It also has an online presence for these brands. However, the company has been grappling with significant debts, reporting nearly $1.2 billion in total debts and $1.3 billion in total assets as of March 2.
The decline of Express can be attributed to several factors. The rise of fast fashion brands like H&M, along with the success of Old Navy and athleisure brands like Lululemon, has posed a challenge to Express’s market share. Additionally, the pandemic accelerated the trend of remote work, reducing the demand for office attire. Quality issues within the brand further compounded its struggles.
Express’s bankruptcy filing aligns with a trend in the retail industry. Several retailers have filed for Chapter 11 this year, reflecting the cautious spending habits of consumers burdened by high levels of debt. Accounting and advisory firm BDO predicts that the pace of bankruptcy filings this year will be similar to last year, with approximately 24 retailers expected to seek bankruptcy protection.
To support its operations during the bankruptcy process, Express has secured $35 million in new financing, pending court approval. This funding will supplement the $49 million in cash obtained earlier through the CARES Act. The company also announced a leadership update, with Mark Still taking on the role of chief financial officer.
While Express faces significant challenges, the potential sale and financial support from WHP Global and other investors offer a glimmer of hope for its future. The company will need to adapt to changing consumer preferences and find a unique value proposition to regain its competitive edge in the retail market.
