Express Files for Bankruptcy, to Close Nearly 100 Stores
Longtime mall retailer Express filed for Chapter 11 bankruptcy protection on Monday, however, a group of investors led by brand management firm WHP Global is looking to save the company by acquiring it. Express, whose portfolio includes its namesake banner, Bonobos and UpWest, said it will close 95 of its eponymous shops and all of its UpWest doors. The bankruptcy filing is expected to “facilitate” a sale process of most of its retail stores and operations to the investor group, which includes WHP, Simon Property Group, and Brookfield Properties. Express received a nonbinding letter of intent from the investors to buy the assets, and has also secured $35 million in new financing from some of its existing lenders, subject to court approval.
Total Retail's Take: The inevitable has finally happened with this bankruptcy filing by Express. The retail chain has seen a softening in its business for several years now, with revenues down by about 10 percent since 2019. Further adding to its liquidity challenges, Express acquired Bonobos’ operating assets and related liabilities for $25 million from Walmart in a joint deal with WHP. The retailer will be able to extract itself from burdensome mall lease agreements as part of its bankruptcy filing, which should provide immediate relief.
In a statement emailed to Total Retail, Juan Pellerano, chief marketing officer at Swap, a retail technology platform that manages all e-commerce operations for direct-to-consumer brands, elaborated on Express' bankruptcy filing.
"“The closure of Express falls in line with the decline of multibrand mass retailers at all levels, whether that be digitally led Matches and FarFetch or now brick-and-mortar focused Express," Pellerano said. "Multibrand, whether it’s online or in-store, becomes a race-to-the-bottom volume game for the business. The minute that volume decreases it’s impossible for the retailer to discount further with already extremely tight margins. While premium malls have maintained decent foot traffic, Express typically hasn't occupied those spaces and never mastered its online business which put it in this position. This further denotes that a healthy omnichannel strategy is the only path forward for retail businesses.”
