Express test of the store concept outside the mall; targets $1 billion in online sales by 2024
Express posted a lower-than-expected fourth-quarter loss and sales that beat expectations as the pandemic continued to weigh on its results.
The fashion clothing retailer also revealed that it is thinking smaller in terms of stores. Speaking on the earnings call, CEO Tim Baxter said the company sees an opportunity to diversify its store base, which is mostly based in malls. To do this, he opened two “Express Edit” concept stores, one in Columbus (Ohio) and the other in Nashville. The stores, which are located across the street, have a smaller footprint of 1,400 to 4,000 square feet. and a product line curated to reflect local styles and trends within a particular market and even neighborhood.
“We plan to add eight more Express Edit concept stores in 2021, which are short-term leases to allow us maximum flexibility as we learn about this new format,” Baxter said on the call. “And as we continue to learn what smaller street-side Express Edit locations could do, we actually have the opportunity to potentially expand that fleet. »
In another test, the company reduced its store square footage by 45% at the King of Prussia Mall in King of Prussia, Pennsylvania. Baxter said the results have been “remarkable”, with productivity twice that of the rest of the Express fleet.
“So we know we have the opportunity to reduce a lot of square footage in our malls and be a lot more productive,” he said.
Express recorded a loss of $53.3 million, or $0.82 per share, in the quarter ended Jan. 30, higher than the loss of $141.6 million, or $2.21 per share, recorded a year ago. Adjusted loss per share was $0.66 versus analysts’ expected loss of $0.83.
Sales fell 29% to $430.3 million, below estimates of $490 million.
Same-store retail sales, which include Express stores and e-commerce, fell 28%. The retailer said it was finalizing a strategy that would grow its digital channel to $1 billion in 2024, with details to be revealed in the second quarter of 2021.
For the full year, Express’ consolidated net sales fell 40% to $1.2 billion. Net loss was $405.4 million, or a loss of $6.27 per diluted share.
“Over the past twelve months, we have effectively managed our liquidity while significantly advancing the EXPRESSway Forward strategy,” Baxter said. “We have taken appropriate action and made progress despite extraordinary circumstances and market conditions. We are well positioned to accelerate in 2021. I expect sales to continue to improve sequentially each quarter and return to positive EBITDA in the second half of the year.
The company said it secured $140 million in additional financing through an agreement with Sycamore Partners, Wells Fargo and Bank of America Merrill Lynch, and negotiated $85 million in rent reductions, deferrals and future rent reductions with its landlords. .
Express operates over 500 retail and outlet stores in the United States and Puerto Rico.