Express to close 100 stores
Retailer Express is set to close up to 100 stores as it tried to restructure its business in the face of growing challenges from e-retail.
The AP had the news:
Express, a staple in U.S. malls, will close about 100 stores as part of a restructuring plan as the chain grapples with drastic changes in where people spend their shopping dollars.
The retailer that caters to younger shoppers said earlier this month that it was laying off 10% of the staff at its Columbus, Ohio, headquarters and its New York City design studio.
Express Inc. said Wednesday that it can cut its costs by $80 million annually, partially through the store closures, nine of which took place in 2019. It plans to close another 31 stores this year, and 35 more by the end of next year.
It was not immediately clear how that would affect the employees at those stores. Staff in Columbus and New York were provided severance pay and ongoing benefits.
Express also said it would relaunch its loyalty program and its private label credit card this fall as part of its effort to reinvigorate the brand.
Express operates about 600 stores. Its sales and profit growth have slid over the past three years.
Clothing retailers, particularly those in malls, have been devastated by changing consumer behavior. More than 9,000 store closures were announced last year, according to Coresight Research, a research and advisory firm.
Katherine Kallergis from The Real Deal reported:
The announcement, part of Express’s plan to reduce costs by $80 million over the next three years, led the company’s stock price to jump 20.7 percent, up to $5.01 per share as of the market’s close on Wednesday. Express said it expects to save $25 million through process improvements, including inventory optimization. The remaining $55 million will come from workforce restructuring.
The 100 store closures include nine stores that closed in 2019. Thirty-one stores will shutter by the end of January, and an additional 35 are expected to close by the end of January 2021. Express said it’s expecting to lose $90 million in sales revenue by 2022, which would be offset by the operating cost savings of the closed stores.
The stores closing this month include one in Wesley Chapel, Florida; two outside of Chicago in Vernon Hills and River Oaks Center; a store at 51st Street and Madison Avenue in Manhattan and one in Yonkers in New York; three stores in northern California and one in central California, according to Business Insider.
CNBC’s Lauren Thomas wrote:
The store closures add to the malaise that U.S. shopping malls have been hit with in recent years. A record of more than 9,000 store closures was announced by retailers — ranging from Gap to Forever 21 to Sears — in 2019. The apparel category within retail has been under pressure especially with more shoppers either pulling back their spending on clothing, or turning to subscription and rental services like Stitch Fix and Rent the Runway.
“When I joined Express, I outlined three priorities: changing the trajectory of the business, developing a corporate strategy, and putting the right team in place,” CEO Tim Baxter said in a statement. “We have spent the past six months developing a strategy with the intent to return Express to long-term growth and a mid-single digit operating margin. Today we took the necessary steps to put the right organization in place to support that strategy.”
Baxter was appointed CEO in June of last year. Previously, he had spent more than two decades working at Macy’s. He succeeded Matthew Moellering, who had served as Express’ interim CEO since January 2019.