{"id":1459024,"date":"2024-02-23T23:00:00","date_gmt":"2024-02-24T04:00:00","guid":{"rendered":"https:\/\/bugaluu.com\/news\/?p=1459024"},"modified":"2024-02-23T23:00:00","modified_gmt":"2024-02-24T04:00:00","slug":"apparel-retailer-express-moving-toward-bankruptcy","status":"publish","type":"post","link":"https:\/\/bugaluu.com\/news\/apparel-retailer-express-moving-toward-bankruptcy\/1459024\/","title":{"rendered":"Apparel Retailer Express Moving Toward Bankruptcy"},"content":{"rendered":"

Apparel Retailer Express Moving Toward Bankruptcy<\/span><\/p>\n

\n

During the company\u2019s last earnings call<\/a> in November, recently appointed CEO Stewart Glendinning acknowledged the company made some missteps<\/a>:\u00a0Among other factors, there was a misalignment between its assortment and customer demand, <\/span><\/span><\/span><\/span><\/span><\/span>Retail Dive<\/a>‘s <\/span><\/span><\/span><\/span><\/span><\/span>Nate Delesline reports.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n

An Express storefront at King of Prussia mall in Pennsylvania. The retailer said this week that it plans to initiate an international brand expansion starting next year<\/em><\/a><\/p>\n

Express took a hit during the pandemic as its core offering \u2014\u00a0business casual \u2014\u00a0fell out of favor as work-from-home surged.<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n

\u201cUnfortunately, my previous assessment of Express\u2019 fragile financial situation leading to a possible bankruptcy due to declining revenue, gross margin profits and ballooning debt of $280 million is a foregone conclusion,\u201d Shawn Grain Carter, a retail industry consultant and professor at the Fashion Institute of Technology at the State University, said in an email to Retail Dive. \u201cWith high-interest rates, the retail company must decide between the \u2018lesser of two evils.\u2019 Moreover, until they fix the waning consumer demand for their merchandise and elevate the brand and product mix, financial wizardry will not resolve their retail woes.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n

Over the past several years, the company has undergone a number of changes as it works to improve its performance.\u00a0Last January,\u00a0WHP<\/span><\/span><\/span> Global closed on a strategic partnership<\/a> with Express. The two entities formed an intellectual property joint venture under which WHP<\/span><\/span><\/span> contributed $235 million for a 60% stake, while Express retained the remaining 40%. The two entities in November <\/span><\/span><\/span><\/span><\/span><\/span>announced plans to expand Express internationally, including in Indonesia and Paraguay, and grow its presence in Central America and Mexico.\u00a0<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n

And after the New York Stock Exchange warned of a potential delisting<\/a> in late March,\u00a0Express executed a 1-for-20 reverse stock split<\/a>, which decreased outstanding shares to 3.7 million from 74.9 million. That stock split enabled Express to regain listing compliance with the New York Stock Exchange.\u00a0<\/span><\/span><\/span><\/span><\/span><\/span>Around the same time, Express said it planned to cut 150 jobs by the end of the third quarter. <\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n

The company also expanded its portfolio last year through a deal with WHP to acquire Bonobos<\/a> from Walmart for $75 million.\u00a0That acquisition<\/span><\/span><\/span><\/span><\/span><\/span><\/span><\/span>\u00a0helped guide the retailer to a 5% year-over-year uptick in Q3 net sales<\/a> to $454.1 million from $434.1 million a year earlier. However, comparable sales for Express stores and e-commerce fell 4% and net loss grew to $36.8 million from $34.4 million in the year-ago period.\u00a0<\/span><\/span><\/span><\/span><\/span><\/span>Inventory was also up 14% for the quarter, rising to nearly $481 million from $422.7 million a year earlier.\u00a0<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n

\u201cExpress has the right building blocks in place with a strong portfolio of brands, a high-potential partnership with WHP and a premier omnichannel<\/span> platform,\u201d Glendinning<\/span> said<\/a> in the earnings announcement. \u201cOur efforts to unlock our full potential and improve our performance are already underway.\u201d<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n

The apparel retailer in late November lowered its full-year 2023 guidance, now expecting net sales to be between $1.84 billion and $1.87 billion, with Bonobos driving $150 million in net sales.\u00a0<\/span><\/span><\/span><\/span><\/span><\/span><\/p>\n

Finally, on Friday, Bloomberg reported that at least one lender to\u00a0Express has approached the retailer to put aside a pool of money for expenses tied to a potential future bankruptcy filing. <\/strong><\/p>\n

A demand to set aside so-called cash reserves, if enforced, could push Express into Chapter 11 as it would eat into limited liquidity available for necessary payments to vendors, landlords and other parties.<\/p>\n

Creditors have been growing increasingly antsy and considering whether to push the company to file for bankruptcy, Bloomberg previously\u00a0reported.<\/p>\n

Express, which is burning through a short supply of cash as it attempts to fix troubled operations, is looking to avoid any move to fund reserves for as long as possible, other people familiar with the matter said. The retailer lost over $150 million in three quarters through late October as it faced an escalating competitive threat from fast-fashion rivals.<\/p>\n<\/div>\n

Tyler Durden<\/a><\/span>
\nFri, 02\/23\/2024 – 18:00<\/span><\/p>\n

\u200bRead More<\/a>\u00a0<\/p>\n

\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

Apparel Retailer Express Moving Toward Bankruptcy During the company\u2019s last earnings call in November, recently appointed CEO Stewart Glendinning acknowledged the company made some missteps:\u00a0Among…<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[1],"tags":[],"class_list":["post-1459024","post","type-post","status-publish","format-standard","hentry","category-news","wpcat-1-id"],"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/pbimBl-67yE","jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1459024","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/comments?post=1459024"}],"version-history":[{"count":0,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/posts\/1459024\/revisions"}],"wp:attachment":[{"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/media?parent=1459024"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/categories?post=1459024"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bugaluu.com\/news\/wp-json\/wp\/v2\/tags?post=1459024"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}