Express Files for Bankruptcy to Facilitate Sale to WHP
A consortium led by Toys ‘R’ Us owner WHP Global that includes mall operators Simon Property Group and Brookfield Properties has offered to buy a “substantial majority” of Express, Inc.’s retail stores and operations. In order to facilitate the sale and free up the liquidity needed to continue operations during the process, Express has filed for Chapter 11 bankruptcy protection.
The fashion retailer, which includes the Express, Bonobos and UpWest brands, has been under pressure for some time now. In September 2023 the company brought in former Tyson Foods exec Stewart Glendinning as CEO to turn around the business, and the company initiated a restructuring effort in February 2024. Despite that, Express was delisted from the New York Stock Exchange on March 6, 2024, due to underperformance.
As part of the bankruptcy, all UpWest stores as well as 95 Express stores will be closed beginning April 23, 2024, with additional closures possible as the company assesses its footprint. The remaining Express and Bonobos stores will continue normal operations through the sale, as will the websites of all three brands. Bonobos’ wholesale operations will also continue uninterrupted.
In order to support continued operations, the company has received a commitment for $35 million in new financing from some of its existing lenders and will also use the $49 million in cash it received on April 15, 2024, from the Internal Revenue Service related to the CARES Act.
Express had hoped that its existing partnership with WHP Global, which began in December 2022, would help with a turnaround. The partnership transformed Express, Inc. into a multi-brand fashion retailer by bringing together the Express, Bonobos and UpWest brands, and included plans to expand the monetization of the Express brand through global licensing partnerships.
Brand management firm WHP Global has become somewhat of a specialist in turning around beleaguered retail brands, facilitating the return of Toys ‘R’ Us and Babies ‘R’ Us; purchasing Bonobos in April 2023; and, most recently, teaming up with Guess? to buy Rag & Bone. Property managers Simon and Brookfield also have become regular players in the brand space, taking ownership in an effort to more proactively right the course of pressured retailers like Forever 21 and JCPenney that are critical to their malls. Express certainly fits the bill, with its approximately 530 primarily mall-based locations across the U.S. and Puerto Rico.
“We continue to make meaningful progress refining our product assortments, driving demand, connecting with customers and strengthening our operations,” said Express CEO Glendinning in a statement. “We are taking an important step that will strengthen our financial position and enable Express to continue advancing our business initiatives. 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.”
In tandem with the bankruptcy filing and sale transaction, Express has named interim CFO Mark Still to the position on a permanent basis.
