New York (AP):
Express Inc., a trendsetter in casual office attire that once struggled to compete with the likes of Zara and H&M, has filed for Chapter 11 bankruptcy protection.
The Columbus, Ohio-based retailer, founded in 1980, announced Monday that it is considering selling the majority of its stores.
Express, the parent company of the Bonbons and UpWest brands, is closing a small number of stores in the process. In its announcement regarding the bankruptcy filing, the company said it plans to close 95 Express retail stores and all 10 UpWest stores.
Closing sales at shuttered stores across more than 30 states and Washington, D.C., are scheduled to begin Tuesday. Express said it plans to operate as usual after these closures.
Express also announced on Monday that it had received a non-binding letter of intent from a group led by consumer brand acquisition and management company WHP Global to potentially acquire the majority of its stores and business. Express said it filed for Chapter 11 protection “to facilitate the sales process.”
The consortium considering the deal also includes shopping mall operators Simon Property Group and Brookfield Properties, Express said. WHP, Simon Properties and Brookfield did not immediately respond to requests for comment Monday.
Express CEO Stewart Glendinning said WHP has been a “strong partner” for the company since 2023 and said the proposed transaction would give Express additional financial resources and create value for stakeholders. He added that the company will be in a good position to grow profitably while maximizing its sales.
In addition to UpWest storefronts, the company operates approximately 530 Express retail and Express Factory Outlet stores in the U.S. and Puerto Rico, as well as approximately 60 Bonobos Guideshop stores and online sales of these brands, according to the Express website. It is also operated.
Express reported in its Chapter 11 filing in the U.S. Bankruptcy Court for the District of Delaware that as of March 2, it had total debt of approximately $1.2 billion and total assets of nearly $1.3 billion.
The company initially started as a women's clothing store, and later branched out into men's clothing. We offer items such as denim dresses that are essential for trendy coordination at work at affordable prices.
But Neil Saunders, managing director at research firm GlobalData, said increased competition from fast-fashion companies such as H&M and the rise of athleisure brands such as Old Navy and Lululemon have all hurt the brand's sales. He said he was giving. Sanders also noted that the brand has been plagued by quality issues and that the pandemic has accelerated the work-from-home trend, reducing the need for shoppers to buy workwear.
“Everyone is biting at Express from all sides, but Express doesn't have a defensible proposition,” Sanders said.
Express joins a small number of retailers that have filed for Chapter 11 so far this year, including fabric and craft retailer Joanne. Analysts also say bankruptcy filings this year are on track to keep pace with last year's pace as shoppers burdened by large consumer debts remain cautious, according to BDO, an accounting advisory firm that tracks retail bankruptcies. We expect the number to be about the same, or closer to 24.
Only five retailers filed for bankruptcy protection in 2022, according to BDO. The figures appear to signal a recovery from businesses struggling due to pandemic store closures, with retail bankruptcies jumping to 35 in 2020 from 21 a year earlier, BDO said.
Express announced on Monday that it had committed to US$35 million in new financing from some of its existing lenders, which is subject to court approval. This adds to the $49 million in cash the company received from the Internal Revenue Service in connection with the pandemic-era CARES Act earlier this month.
Express also released a management update on Monday. According to the company, Mark Still will serve as interim CFO starting in November 2023, and will immediately become chief financial officer.