News

Express Announces Business Model Review

James L. Flint

• August 18, 2023

Express, a clothing retailer based in Columbus, Ohio, has recently initiated a comprehensive review of its business model with the aim of reducing costs and enhancing operational efficiencies. The company has set an ambitious target to achieve $150 million in annualized expense reductions by 2025 in comparison to 2022. Notably, Express has already identified and implemented $80 million in savings for 2023 and an additional $120 million for 2024.

As part of its cost reduction strategy for fiscal year 2024, Express plans to streamline its workforce, resulting in an estimated $30 million in savings. The associated charges related to the workforce reduction amount to approximately $5 million and have already been recognized in the company's financial statements for the second quarter.

In addition to workforce optimization, Express is actively pursuing opportunities to expand its gross margin by at least $50 million. This growth will be achieved through leveraging efficiencies in sourcing, production, and supply chain management.

Furthermore, Express released its preliminary results for the second quarter, forecasting sales in the range of $400 million to $450 million. The company also expects a loss per share between 50 cents and 60 cents, aligning with its previously communicated outlook in May.

Express's CEO, Tim Baxter, expressed optimism about the sales performance of the Express brand, noting sequential improvements throughout the quarter. These improvements were driven by corrective actions taken to address imbalances in the women's assortment architecture.

To strengthen its financial position and enhance shareholder value, Express's board of directors has approved a 1-for-20 reverse split of its common stock. This action is set to take effect after the market closes on or around August 30.

In conclusion, Express is committed to executing its business model review diligently to achieve significant cost reductions and operational improvements. The company remains focused on enhancing its gross margin and delivering sustainable growth in the long term.