Express Turnaround Plan on Track as Majority of Stores Reopen — COVID-19 Spikes Could Pose Challenges
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Express’ transformation is back on schedule.
The fashion apparel and accessories chain announced today that its new corporate strategy, which was disrupted by the coronavirus outbreak, remains on track as majority of its stores reopen to the public and are seeing steady gains in sales.
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Unveiled in late January, the business plan outlined the permanent closures of 100 outposts by 2022 as well as the relaunch of its loyalty program and private-label credit card in the fall, the introduction of enhanced omnichannel capabilities and the development of a curated assortment of product dubbed The Express Edit.
According to the Columbus, Ohio-based company, the strategy had been in its “early stages” when the pandemic struck the United States and forced the closures of its units across the country starting mid-March. It added that “a number of important initiatives” were already underway at the time, and the business had begun to show “positive signs” of a turnaround.
As of early July, Express has reopened roughly 95% of its brick-and-mortar fleet and expects to resume operations at its remaining locations in the coming weeks. It reported that comps for those open stores have “sequentially improved” from negative 50% in early May to negative 15% by the third week in June. Traffic has also advanced from negative 65% to negative 30% for those same periods.
“Traffic and sales have steadily improved, and our e-commerce demand was positive in the month of June,” shared CEO Tim Baxter. “We are encouraged by our customers’ response to the new Express product vision and brand positioning, and remain focused on what we can control as we continue to drive the ‘Expressway Forward’ strategy and advance towards our long term objective of profitable growth.”
As part of the reopening process, the retailer has installed ship-from-store capabilities in more than 330 outposts as well as buy online, pick-up in store services at 275 stores. (It plans to have all locations equipped with BOPIS by the end of the third quarter.)
However, amid a new spike in COVID-19 cases in several states, Express noted declines in both sales and traffic in Arizona, California, Florida and Texas, which it said were “significant enough” to impact its balance sheet.
“Results in stores have been negatively impacted by multiple factors, including reduced mall traffic due to COVID-19 and the cancellation of June and July product — the latter causing the assortments to not yet be fully reflective of the company’s new vision but deemed prudent in order to effectively manage liquidity,” it added.
As previously announced, Express has accessed $165 million from its credit facility to improve its financial flexibility. It has also cut expenses through inventory reductions, hiring freezes and furloughing store associates as well as a number of corporate employees.
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