After a long decline and an impending trip to bankruptcy court, Express is hoping to become something of a phoenix with a new role to play in the retail ecosystem.
But experts say the brand itself — once a mainstay of shoppers who wanted to look sharp as they entered the workforce — still has plenty of work to do as it seeks to find its place with today’s consumers.
Express filed for Chapter 11 bankruptcy in the early hours on Monday with a letter of intent from a familiar suitor — Phoenix, which is a joint venture of brand management firm WHP Global and two of the retailer’s key landlords, Simon Property Group and Brookfield Properties.
That could be a lifeline for the company.
But Stewart Glendinning, the Tyson Foods veteran who became chief executive officer of Express in September, warned in his declaration to the court that the retailer needs to reach a deal with a buyer quickly.
“The biggest impediment to a going-concern transaction will be time,” Glendinning said.
Under the terms of the $35 million in financing Express received to file for bankruptcy, the company needs to have a firm deal in 30 days or “will be forced to pivot to an orderly liquidation process.”
That sets a quick countdown over the bankruptcy case that, one way or the other, will radically transform the business and potentially set it up to play a key role for WHP.
Should Phoenix buy Express out of bankruptcy, the brand management firm is set to use it as a retail and operational arm for its business, which already includes Joseph Abboud, Joe’s Jeans, Isaac Mizrahi, William Rast and other brands.
That roughly mirrors the set up of competitor Authentic Brands Group, which owns the brands, and its SPARC joint venture, which holds the operating business. (Simon also has a stake in SPARC, showing the landlord’s willingness to work with brand managers at large.)
According to the letter of intent, Phoenix wants to “continue to operate the company’s e-commerce business and as many of its existing stores located in the United States as possible, pending reaching acceptable agreement with the landlords of such locations.”
Phoenix would be capitalized with at least $200 million, including an “equity commitment from WHP Global of at least $100 million, providing ample capital to create a strong operation with a footprint of over 280 stores already identified to continue the Express and Bonobos brands and legacies.”
In the meantime, the company has started the process to close 106 stores and also hopes to spin off sustainability-minded UpWest business during the bankruptcy.
It’s been a long decline for the retailer.
Express — which along with Victoria’s Secret, Abercrombie & Fitch Co. and others was once owned by The Limited Brands — opened its first store in 1980.
The brand peaked in the 1990s with more than 600 doors, but was overshadowed by other specialty retailers and failed to evolve fast enough over the past decade.
In late 2022, Express forged a $260 million partnership with WHP aimed at building the business overseas through licensing deals while also creating a platform to acquire other brands.
WHP took 60 percent ownership of a joint venture that held Express’ intellectual property. And then the brand management firm and Express went on to buy Bonobos, with WHP getting the brand for $50 million and Express picking up the operating assets and liabilities for $25 million.
But the Express retail business never really saw the traction it needed.
In February, Glendinning was fending off rumors of a bankruptcy and trying to calm nerves.
“Headlines rarely tell the full story, and I want you to be armed with the facts,” Glendinning told employees in a memo at the time.
“We have acted with urgency and accomplished a lot in a short period of time, and I am grateful for your efforts,” he said. “I also recognize that all of this change was not easy, but it was necessary to position our organization for the future.”
The company was “proactively preserving our liquidity” while it waited on a government payment under the Coronavirus Aid, Relief and Economic Security Act.
That payment — for $49 million — came on April 15, but it wasn’t enough to avert a bankruptcy.
WWD’s sister publication Sourcing Journal has reported that private equity firm Sycamore Partners has also been taking a look at Express.
Under the umbrella of WHP, the Express business could be used to support other brands, but the Express name itself still needs plenty of support of its own.
“I don’t think it has an identity,” said Jessica Ramírez, senior research analyst at Jane Hali and Associates. “I don’t think it has a place that sits in the consumer’s mind. It’s just so far behind that it’s hard to even think of where it would sit.”
Ramírez pointed to competition from fast fashion and from brands such as Reformation or Everlane.
“I don’t know who is [thinking], ‘Oh, let me go to Express,’” she said. “If it’s going to be wear-to-work or cute, just go out [styles], you’ll think of Zara or you’ll think of off-price.”
Neil Saunders, managing director of GlobalData, said: “The formal and smart casual market for both men and women has softened over recent years because of a rise from working from home and the casualization of fashion. This puts Express firmly on the wrong side of trends and, in our view, the chain made too little effort to adapt.
“In many ways, Express is the archetypal middle-market mass retailer that consumers are increasingly willing to either cut out of the portfolio of stores they visit, or buy less from, as they look to save money,” Saunders said.
Now, Express just might have a chance to be something else — if it can move fast over the next 30 days.
