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Express Inc. Bankruptcy: Mall Giants Bid with $84M Boost

Express Inc. files for bankruptcy, plans sale to consortium including WHP Global and major mall landlords, aiming to preserve majority of stores.

By Jack Wilson

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4/22, 17:10 EDT
Ares Management Corporation
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Key Takeaway

  • Express Inc. files for bankruptcy, plans to sell to WHP Global and mall landlords Simon Property Group and Brookfield Properties.
  • The retailer aims to close about 95 stores; receives $35 million in new financing plus a $49 million IRS boost from the CARES Act.
  • Express's struggle reflects broader retail sector challenges amid competition from online brands and changing consumer preferences.

Express Inc. Files for Bankruptcy

Express Inc., a prominent clothing retailer known for its presence in U.S. malls, has declared bankruptcy with intentions to sell the company. The retailer has accepted a purchase proposal from WHP Global, in collaboration with mall landlords Simon Property Group Inc. and Brookfield Properties. This consortium aims to take over the company's operations and a majority of its retail outlets. The bankruptcy filing is designed to streamline the sale process. WHP Global, a brand management firm based in New York and supported by Ares Management Corp., boasts a portfolio that includes Toys “R” Us, Isaac Mizrahi, and Rag & Bone. In a significant move, WHP Global acquired a 60% stake in Express through a joint venture established in 2023. Express, headquartered in Columbus, Ohio, plans to close about 95 of its over 500 stores, including all UpWest locations, with sales starting Tuesday. The company is also evaluating its store footprint with the assistance of A&G Realty Partners.

Financial Struggles and Strategic Moves

Express Inc.'s bankruptcy documents filed in Delaware show liabilities and assets each in the range of $1 billion to $10 billion. The Chapter 11 filing permits the retailer to continue operations while formulating a repayment strategy for its debts. To aid its operations during the bankruptcy, Express has arranged $35 million in new financing from its existing lenders. Furthermore, the company benefited from a $49 million boost from the Internal Revenue Service in April, courtesy of the CARES Act, offering a crucial financial support during its restructuring. Over the past 40 years, Express has been a favored destination for Millennials looking for reasonably priced office wear and casual clothing. However, the retailer has faced declining revenues due to fierce competition from new online brands and shifts in consumer preferences. Last year, Express sought external advice for cost reduction strategies, following its acquisition of men's apparel brand Bonobos Inc. alongside WHP Global.

Retail Industry Challenges

The bankruptcy of Express Inc. is indicative of the wider distress within the retail sector. The company is among a list of retailers, including 99 Cents Only Stores and Joann Inc., that have filed for bankruptcy protection in recent times. These cases underscore the difficulties faced by traditional brick-and-mortar retailers as they adapt to the evolving market landscape, changing consumer behaviors, and the competitive threat from digital-first entities.

Management Quotes

  • David Simon, CEO of Simon Property Group:

    "Pleased with the brands and many had been 'extraordinarily profitable,' in previous years, but the firm wouldn’t necessarily own its retail brands five or ten years down the line since the business is not its core focus."