Express to sell off most of its stores, including one at Franklin Park Mall
Posted By: Toledo Blade on April 22, 2024. For more information, please click here to read the source article.
Express Inc. — once a trendsetter of casual office attire that has struggled to compete with the likes of Zara and H&M — has filed for Chapter 11 bankruptcy protection.
The Columbus-based retailer, founded in 1980, also said Monday it is seeking to sell the majority of its stores, including the one at Franklin Park Mall in West Toledo.
In an announcement addressing its bankruptcy filing, the company said it plans to close 95 of its Express retail stores and all 10 of its UpWest stores.
Closing sales at locations being shut down, which span across more than 30 states and the District of Columbia, are to begin Tuesday. Beyond these closures, Express said that it expects to conduct business as usual.
Also on Monday, Express announced that it received a nonbinding 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. Express said it had filed for Chapter 11 protection “to facilitate the sale process.”
The consortium exploring the deal also includes mall operators Simon Property Group and Brookfield Properties, Express said. WHP, Simon Property and Brookfield did not immediately respond to requests for comment Monday.
Stewart Glendinning, Ex-press CEO, said WHP “has been a strong partner” of the company’s since 2023, adding that the proposed transaction would give Express additional financial resources and put it in a better position to grow profitably while maximizing value for stakeholders.
Beyond its UpWest storefronts, the company operates about 530 Express retail and Express Factory Outlet stores in the United States and Puerto Rico, in addition to roughly 60 Bonobos Guideshop locations as well as online operations for those brands, according to Express’ website.
Express reported nearly $1.2 billion in total debts and $1.3 billion in total assets as of March 2 in its Chapter 11 petition, which was filed in U.S. Bankruptcy Court for the District of Delaware.
The company started as a women’s fashion purveyor, then branched out to men’s wear. It offered must-have items, like denim dresses for those looking for trendy outfits in the workplace, at affordable prices.
But increasing competition from fast-fashion players like H&M, as well as the rise of Old Navy and athleisure brands like Lululemon, all hurt the brand’s sales, said Neil Saunders, a managing director with research firm GlobalData. Mr. Saunders also noted that it was beset by quality issues, and the pandemic sped up the trend of people working from home, lessening the need for shoppers to buy work outfits.
“Everyone has been nibbling at Express from all sides, and Express doesn’t have a defensible proposition,” he said.
Express joins a handful of retailers filing for Chapter 11 so far this year, including fabrics and craft retailer Joann. Analysts expect the pace of bankruptcy filings this year to be around the same level — close to 24 — as last year, as shoppers hobbled by high consumer debt remain cautious, according to accounting and advisory firm BDO, which tracks retail bankruptcies.
In 2022, only five retailers filed for bankruptcy protection, according to BDO. The number appeared to indicate a recovery from the pandemic-induced store closures that pushed struggling companies over the edge in 2020, when retail bankruptcies spiked to 35 from 21 the year before, BDO said.
Express said Monday it has a commitment for $35 million in new financing, which is subject to court approval, from some existing lenders. That would add to the $49 million in cash it obtained this month from the Internal Revenue Service related to the pandemic-era CARES Act.
Express also announced a leadership update Monday. Mark Still will become chief financial officer, effective immediately, after serving as interim CFO since November, the company said.
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