Express Inc., a familiar name in American malls, has made a sobering move in the retail world by filing for Chapter 11 bankruptcy. With their headquarters in Columbus, Ohio, the fashion retailer indicated almost $1.2 billion in total debts compared to $1.3 billion in total assets, as reported in their U.S. Bankruptcy Court for the District of Delaware filing noted by FOX Television Stations. A casualty of changing fashion landscapes and potentially questionable leadership choices, nearly 100 of Express's locations are ceasing operations across the country.
In an ill-timed pivot, Express announced the store closures alongside their bankruptcy declaration, with sales kicking off as soon as Tuesday, revealing the depth of the chain's financial troubles. Some existing lenders, according to Express, are shouldering the company with a fresh $35 million in financing, adding to a figure mentioned by CBS News — $49 million courtesy of the Internal Revenue Service through the CARES Act. California will witness a notable number of closures, including locations in prime areas like San Diego, Downey, and Valencia, to name a few. These stores provided affordable fashion for over four decades and the ripple effect of their shuttering is expected to be significant.
Express's journey to bankruptcy court wasn't solely based on external factors. Neil Saunders, managing director of GlobalData, mentioned to ABC7, that the "formal and smart casual market for both men and women has softened over recent years," hurting retailers like Express. Saunders specified that these dynamics left Express "firmly on the wrong side of trends" and noted that the company demonstrated insufficient adaptation strategies.
Criticism has also been aimed at Express's strategic maneuvers, including the appointment of Stewart Glendinning, previously a Tyson Foods executive, as its CEO. Recognizing the fashion retailer was laden with bland merchandise and overpricing which outpaced competitors, Saunders suggested these missteps contributed substantially to their current predicament. As Saunders lifted the lid on the issue to CBS News, a sale of the company's operations and most of its stores is being facilitated through the Chapter 11 process to brand manager WHP Global and mall magnates Simon Property Group and Brookfield Properties.
Despite the glaring setbacks, Express is refusing to fold its entire deck. The retailer has obtained a letter of intent from a consortium led by WHP Global for the potential sale of a substantial majority of its retail footprint and operations. "WHP has been a strong partner to the company since 2023, and the proposed transaction will provide us additional financial resources, better position the business for profitable growth and maximize value for our stakeholders," Glendinning optimistically stated, as echoed by ABC7. This potential deal may just be the lifeline Express needs to sustain its presence in the fast-evolving retail fashion domain.
