Express Turnaround Plan Includes 100 Store Closings
Apparel retailer and mall staple Express said it will close around 100 stores by 2022 as part of a new strategy to save $80 million in costs annually over the next three years.
The closures includes nine stores in 2019, 31 by the end of January 2020, and an additional 35 by the end of January 2021.
“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,” said CEO Tim Baxter, in a recent statement announcing announced a restructuring of its corporate workforce that impacts approximately 10% of the positions in the company’s Columbus, OH headquarters and its design studio in New York City. “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.”
Baxter joined the company as CEO last June, succeeding Matthew Moellering, who was serving as interim CEO, following the departure of David Kornberg. Baxter previously spent 26 years with Macy’s and the former May Department Stores in various roles, most recently as Macy’s chief merchandising officer.
The news of the store closings came as Express, open since 1980, revealed its new strategy, dubbed The EXPRESSway Forward.
“My expectation is that we will return to a mid-single-digit operating margin through a combination of low-single-digit comp sales growth, margin expansion and cost reductions. This will of course take some time, but we have a clear path,” Baxter said in a separate press release.
Over the next three years, the company plans to spend between $50-60 million in capital expenditures each year to fund technology investments, ongoing maintenance of technology platforms, enhance customer facing e-commerce capabilities, and refresh stores to ensure consistent representation of the brand.
Part of the plan for Express’s turnaround is the relaunch of its loyalty program and private label credit card in Fall 2020. The retailer also plans to optimize marketing spend through new tools and predictive models, and more personalized customer communications.
In addition to the fleet rationalization and cost reductions, Express said it will create operational efficiency across the organization, including a new go-to-market process, inventory optimization, an improved customer experience and enhanced omnichannel capabilities.
It has also developed a new product approach dubbed “The Express Edit,” which it said will result in a curated assortment reflecting versatility and consistent newness. Based on customer insights, the company said it will aim to “edit the best of current fashion for real-life versatility.” How the brand engages with customers will be consistent with this point of view across women’s and men’s, across channels, and across communication touchpoints, and will encourage them to “Dream Big. Dress Accordingly.”
Express employs approximately 18,000 associates in over 650 retail stores, both nationally and internationally.