Express Inc., a well-known fashion retailer, announced it has filed for Chapter 11 bankruptcy protection as it grapples with longstanding challenges in merchandise appeal and intense competition in the fast-fashion sector. The Columbus, Ohio-based company, which has been a fixture in American malls since 1980, disclosed plans to close 95 of its more than 500 Express stores across the United States and all of its 10 UpWest locations.
The bankruptcy filing, submitted in Delaware, reveals a strategy to stabilize the company's finances through significant store closures and a potential sale of its major assets. Express has also secured a non-binding letter of intent from WHP Global, signaling a consortium's interest in acquiring a substantial part of its retail operations. The consortium includes notable mall operators such as Simon Property Group and Brookfield Properties.
Stewart Glendinning, CEO of Express, stated, "We continue to make meaningful progress refining our product assortments, driving demand, connecting with customers, and strengthening our operations. We are taking an important step that will strengthen our financial position and enable Express to continue advancing our business initiatives."
According to the filing, Express has obtained $35 million in new financing from existing lenders and anticipates additional financial support from the potential transaction with WHP Global. Glendinning noted that the partnership with WHP, established in 2023, aims to provide the necessary resources to position the business for profitable growth and to maximize stakeholder value.
The financial turmoil at Express has been exacerbated by shifting fashion trends, including the rise of casual and work-from-home attire spurred by the pandemic. Neil Saunders, managing director of GlobalData, highlighted that the company struggled to adapt to these changes, with its offerings often perceived as overpriced and uninspiring compared to competitors.
"Express has found itself on the wrong side of trends," Saunders explained. "In our view, the chain made too little effort to adapt. As a result, the Express brand itself has become less relevant to shoppers."
The broader retail landscape has seen a wave of bankruptcies in recent years, with companies like Joann and several others succumbing to similar pressures. BDO, an accounting and advisory firm, anticipates that the pace of retail bankruptcies this year will mirror last year's levels as consumers, burdened by high debt, remain cautious.
The current financial restructuring includes not only store closures and potential sales but also leadership changes. Express announced that Mark Still, who has served as interim CFO since November 2023, will assume the role of chief financial officer effective immediately.
As part of its commitment to navigating through these challenging times, Express has ensured that all of its brands' online channels will continue to operate normally, accepting orders, processing returns, and redeeming gift cards and store credits. The Express Insider program benefits will also remain unaffected during this period.
