Express Bankruptcy: $35M Financing, 95 Stores Closing

Key Takeaway

• Express Inc. files for bankruptcy, plans to sell to WHP Global and mall landlords, closing approximately 95 stores.
• Secured $35 million in new financing for operations during bankruptcy; received a $49 million IRS infusion from the CARES Act.
• Bankruptcy reflects wider retail sector distress, joining others like 99 Cents Only Stores and Joann Inc. in seeking protection.

Express Inc. Files for Bankruptcy

Express Inc., a well-known clothing retailer with a significant presence in US malls, has filed for bankruptcy, announcing plans to sell the company. The retailer has received a purchase offer from WHP Global, alongside mall landlords Simon Property Group Inc. and Brookfield Properties. This consortium aims to acquire the company's operations and the majority of its retail stores. The bankruptcy filing is intended to facilitate this sale process efficiently.

WHP Global, a New York-based brand management firm with backing from Ares Management Corp., has a diverse portfolio that includes brands such as Toys “R” Us, Isaac Mizrahi, and Rag & Bone. Notably, WHP Global acquired a 60% stake in Express through a joint venture established in 2023. Express, headquartered in Columbus, Ohio, has disclosed plans to shutter approximately 95 of its over 500 stores, including all UpWest locations, with closing sales set to commence on Tuesday. The company also indicated ongoing evaluations of its store footprint in collaboration with A&G Realty Partners.

Financial Struggles and Strategic Moves

Express Inc.'s bankruptcy filing in Delaware reveals liabilities and assets each ranging from $1 billion to $10 billion. The Chapter 11 filing will allow the retailer to maintain operations while strategizing on repaying its debts. To support its operations during the bankruptcy process, Express has secured $35 million in new financing from its existing lenders. Additionally, the company received a $49 million infusion from the Internal Revenue Service in April, related to the CARES Act, providing a financial lifeline amid its restructuring efforts.

The retailer, which has been a go-to for Millennials seeking affordable officewear and casual attire for over 40 years, has encountered declining revenues in recent years. This downturn is attributed to stiff competition from emerging online brands and shifts in consumer preferences. In a move to revitalize its business, Express engaged external advisers last year to explore cost-cutting measures. This strategic review came shortly after the company, in partnership with WHP Global, acquired men's apparel brand Bonobos Inc.

Retail Industry Challenges

Express Inc.'s bankruptcy is part of a broader trend of financial distress within the retail sector. The company joins a growing list of retailers, including 99 Cents Only Stores and Joann Inc., that have sought bankruptcy protection in recent months. These filings highlight the ongoing challenges faced by traditional brick-and-mortar retailers as they navigate changing market dynamics, evolving consumer behaviors, and the competitive pressures exerted by digital-first brands.