Express, Inc. filed for Chapter 11 bankruptcy within the U.S., the apparel retailer announced April 22. It should also close 95 Express stores of the about 530 it operates, and all 12 UpWest locations, with closing sales starting April 23. Express also operates the brand Bonobo.
The retailer also said that it received a nonbinding letter of intent from a consortium including WHP Global, Simon Property Group and Brookfield Properties with interest in purchasing a majority stake in its retail stores and operations.
Law firm Kirkland & Ellis is serving as legal counsel to Express, and M3 will proceed as financial advisor.
“We proceed to make meaningful progress refining our product assortments, driving demand, connecting with customers and strengthening our operations,” CEO Stewart Glendinning said in a press release. “We’re taking a vital step that can strengthen our financial position and enable Express to proceed advancing our business initiatives. WHP has been a robust partner to the Company since 2023, and the proposed transaction will provide us additional financial resources, higher position the business for profitable growth and maximize value for our stakeholders.”
Retail stores and ecommerce web sites proceed to operate during normal hours and fulfill orders, Express said. The retailer will proceed to evaluate its store footprint with the assistance of A&G Realty Partners, it said.
Express is No. 116 within the Top 1000, Digital Commerce 360’s rating of North America’s leading retailers by online sales.
What led to Express filing for bankruptcy?
The retailer reported assets of between $1 billion and $10 billion, and liabilities between $1 billion and $10 billion within the filing. Express also received a commitment for $35 million in latest financing from its lenders, it said.
It previously reported $274.7 million in debt within the third fiscal quarter of 2023, essentially the most recent quarter for which it has shared financial information. That was a rise from $235.4 million within the year-ago period. $65 million of the debt is from a loan the retailer took out in 2023 at 15% interest as a “short-term measure to strengthen our liquidity position,” former chief financial officer Jason Judd said in a Q2 earnings call.
During that quarter, Express also recorded an operating lack of $28.7 million and a net lack of $36.8 million. Express introduced an expense reduction initiative in 2022, with a goal of saving $200 million by 2025. It saved $30 million during that third quarter and was on course to realize $80 million in cost savings for 2023.
The retailer undertook extensive discounting to sell apparel within the quarter, it said. That had a negative impact on margins, it said.
In February 2024, Express shared plans to restructure its debt within the hopes of avoiding bankruptcy.
Express and WHP
WHP previously invested in Express in 2022, when it spent about $25 million for a 7.4% stake within the retailer. In 2023, it acquired a 60% interest in Express.
WHP has a history of acquiring struggling retailers. In 2021, the firm acquired a controlling interest within the parent company of Toys R Us and Babies R Us. In February 2024, WHP partnered with Guess Inc. to accumulate apparel retailer Rag & Bone.
Guess is No. 173 within the Top 1000, and Rag & Bone ranks No. 638.
Express leadership changes
The retailer also announced that Mark Still will take over as senior vice chairman and chief financial officer. He became interim CFO in November 2023 after former CFO Jason Judd left Express, one yr after joining the corporate.
The retailer appointed a brand new CEO in September 2023. Stewart Glendinning previously worked as group president of prepared foods and chief financial officer at Tyson Foods.
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