The chief executive officer (CEO) of Express, a famous fashion retail chain, has taken quick steps to stop the company from going bankrupt. Reports suggest that Express is close to filing for Chapter 11 bankruptcy, a move that could endanger 600 of its stores. The CEO's prompt actions aim to save the company and protect these stores from closing.
Express CEO's Efforts to Save Company
Stewart Glendinning, the CEO of Express, has made a strong statement to reassure investors about his steps to ensure the company's future. In a memo that Retail Dive got hold of, Glendinning praised his team's efforts during these challenging times.
"We've moved quickly and achieved a lot in just a short time, and I'm thankful for your hard work," he said.
Glendinning explained that Express is actively working with its suppliers and property owners. The goal is to keep the company's cash flow steady while they wait for a large sum of money from the IRS.
Express is expecting to receive $62 million due to the CARES Act. This act, known as the Coronavirus Aid, Relief, and Economic Security Act, is set to provide significant financial relief to the company.
During the company's third-quarter earnings call in November, Interim Chief Financial Officer Mark Still said that approval from the IRS and the Congressional Joint Committee on Taxation is required to disburse the CARES Act payments. Regarding the CARES Act payments, a source close to the company said it is now mainly a question of timing on when the cash will be received.
Express has not had any discussions with lenders regarding possible debt restructuring, the source told Retail Dive. Kirkland & Ellis has also worked with Express since the company went public in 2010. The source said restructuring advisory firm M3 was brought on at lenders' request when the company entered a previous loan.
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Express Struggles to Stand Out Amidst Retail Challenges
Express, a well-known fast fashion retailer, is fighting to attract customers and boost sales by offering big discounts, with some items now up to 70% off. However, these price cuts alone might not secure the brand's future.
Established in 1980, Express initially gained popularity by offering affordable business and casual clothing. But in today's highly competitive market, with numerous online and physical store options, the brand has found it hard to keep its customer base.
"Express doesn't stand out," said Neil Saunders, managing director of GlobalData, speaking to Retail Dive last year. He pointed out that the brand's collection is unremarkable, the styles are average, and the prices are a bit high for what's being offered.
In 2020, Express faced a tough decision, closing 91 stores, which resulted in many job losses. The company now operates around 600 stores. Stewart Glendinning took over as the CEO in 2023, coming from his previous role as Group President of Prepared Foods at Tyson Foods, Inc.
Upon his appointment, Mylle Mangum, Chairman of the Express Board, said in a press release, "He's an accomplished executive who will bring new ideas to our company and our strategies for profitable growth.
Stewart agrees with the Board that we need more operational improvements and financial discipline to ensure Express can deliver significant, sustainable value to our shareholders."
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