Mall Store Chain Considers Filing for Bankruptcy as Financial Crisis Looms

By: Sam Watanuki | Last updated: Apr 18, 2024

Remember when you couldn’t walk through a mall without seeing an Express store? 

Those days are in the rearview mirror. Now, this former retail titan is grappling with the prospect of bankruptcy, a stark turn fueled by relentless competition from trendy, low-cost brands.

Navigating Financial Turbulence

According to Bloomberg, Express is currently in negotiations with lenders as it considers filing for bankruptcy. 

An image of the entrance to an Express Men store, showing a clean and modern storefront with mannequins dressed in formal attire

Source: Wikimedia Commons

It’s tough out there—shoppers are now spending their dollars at online behemoths like Amazon and Shein, leaving Express in a pinch.

Shakeup at the Top

Following a significant decline in sales, CEO Tim Baxter resigned, leaving his successor, Stewart Glendinning, the challenging task of navigating the company through turbulent times. 

A photo of the storefront of an Express retail location featuring prominent yellow and black signage indicating a store closing sale, with signs that read "LAST 3 DAYS!" and "EVERYTHING 80-90% OFF."

Source: Wikimedia Commons

The question remains: can the new leadership reverse the company’s fortunes?

Share Price Plummet

Feel bad about your investments? Express’s situation might make you feel a bit better. 

A wide-angle shot of the New York Stock Exchange building and the bustling street in front of it, filled with pedestrians and street vendors

Source: Wikimedia Commons

Their stock has tanked nearly 90% this year, and to top it off, they’ve been delisted from the New York Stock Exchange. 

The Debt Dilemma

Alarmingly, Express has struggled to meet its financial obligations on time. 

An image of an Express store in a shopping mall with signs advertising a sale with "LAST 3 DAYS!" and discounts of "60-80%."

Source: Wikimedia Commons

At the start of the year, only 30-39% of bills were paid promptly, with the situation worsening rapidly. This signals deep-rooted financial instability within the company.

Flashback to Better Days

Modern Retail reports that in 2010, Express was a leading player in specialty retail, achieving record sales. 

A promotional photo for Express featuring a diverse group of models smiling and walking together, dressed in colorful casual and business casual attire

Source: express/X

Today, the situation is dramatically different, with the company facing severe financial challenges—a stark contrast to its former glory.


Can Bonobos Be the Lifesaver?

In what could be a pivotal move, Express bought the men’s fashion brand Bonobos for $75 million in 2023.

An exterior view of a Bonobos retail store with large glass windows displaying menswear and the brand's name prominently featured above the entrance

Source: Wikimedia Commons

They’re betting big that this fresh addition will reinvigorate their offerings and draw in a crowd looking for something new.


A Digital Pivot

Express isn’t just fighting back; they’re reinventing their game plan. 

The front facade of an Express clothing store with the brand's name in large white letters over the entrance, visible from the street

Source: Wikimedia Commons

They’re diving deep into social media and ramping up their online shopping features. Sara Tervo, their CMO, claims they’re finding a balance, but will this gamble pay off?


The Complexities of Financial Distress

Express’s troubles aren’t from just one misstep. It’s a tangle of inflation, changing consumer habits, and more, pushing people away from splurging on new outfits to spending on essentials. 

A person browsing through a selection of clothing on hangers in a retail store, inspecting a white garment

Source: charlesdeluvio/Unsplash

It’s a complex problem with no easy fix.


Economic Headwinds

What’s worse for a struggling retailer than rising interest rates? Not much.

The Federal Reserve Building, a large neoclassical structure with an American flag flying above, under a clear blue sky

Source: Wikimedia Commons

With rates on the rise, Express’s debt burden grows heavier by the day, making an already difficult situation nearly impossible.


Priced Out of the Market

Express is learning a hard lesson in pricing. 

Inside a modern fashion store with racks of clothing on display, a customer is seen shopping, with wooden frames and white decor elements

Source: Korie Cull/Unsplash

Modern Retail notes that competing with brands offering similar styles at significantly lower prices means their $80 jeans are a hard sell. 


The Prospect of Bankruptcy

With mounting challenges, bankruptcy appears increasingly likely for Express. 

An illuminated Express retail store entrance at night, with the interior lights showcasing clothing displays and promotional signs offering discounts

Source: Wikimedia Commons

While daunting, such a move could provide the necessary reset, offering a chance to restructure and potentially revive its business in a radically changed retail landscape.


Impact of Consumer Shifts to E-Commerce

The surge in online shopping has drastically reduced foot traffic in malls (via Resonai), directly impacting Express’s physical store sales.

A woman sitting at a wooden table. She is holding a credit card and is smiling. She is surrounded by different colored shopping bags.

Source: Andrea Piacquadio/Pexels

As consumers continue to favor digital platforms for convenience and variety, Express faces the challenge of aligning its physical presence with evolving shopping behaviors, emphasizing the need for a robust online strategy to capture and retain customer interest.


Strategic Shifts and New Market Entry

Express is expanding into new markets such as Central America and Mexico (via Retail Touchpoints), aiming to diversify its revenue streams and reduce its dependency on volatile North American mall traffic.

An aerial view of Mexico City seen in the daytime.

Source: carlos aranda/Unsplash

This strategic shift is part of a broader effort to tap into emerging markets where mall culture may still be flourishing, offering a new customer base for growth.


The Role of the CARES Act

According to Retail Dive, Express is awaiting a significant financial relief from the CARES Act, with a planned $52 million in tax refunds that CEO Stewart Glendinning expects will substantially boost the company’s liquidity.

A Presidential Portrait of Joe Biden. He is wearing a blue suit with a pin of the US flag. There is a US flag behind him.

Source: The White House/Wikimedia Commons

This relief is crucial for maintaining operations and mitigating the immediate financial crisis, as it allows the company to manage its cash flow more effectively in the short term.


Recent Partnership Ventures

In January, Express solidified a strategic partnership with WHP Global, forming an intellectual property joint venture that injected $235 million into Express for a 60% stake (via PR Newswire).

Two businessmen shake hands over a wooden table

Source: Freepik

This move not only bolsters Express’ potential financial position but also leverages WHP’s expertise to rejuvenate the brand and expand its global footprint.


Restructuring Efforts Beyond Cost-Cutting

Beyond reducing costs, Express has been actively optimizing its operational efficiency.

A man in a brown coat is browsing through a selection of shirts in a clothing store

Source: senivpetro/Freepik

This includes streamlining supply chain processes and renegotiating lease agreements to better align with current market conditions, which are critical to reducing overhead and improving profit margins.


Innovation in Product Offering

Recognizing the shift in consumer preferences, Express has revamped its product lines to include updated denim collections and versatile business-casual attire suited for hybrid work environments.

A group of people in suits talking at a brown table in a restaurant

Source: August de Richelieu/Pexels

These innovations aim to meet the new consumer demand for style and functionality, drawing customers back into stores.


Enhancing Customer Engagement

Express has been enhancing customer engagement since the pandemic by implementing advanced digital marketing strategies and developing a more robust online presence (via Marketing Dive).

A woman is pictured shopping online as she sits on the edge of her bed

Source: Freepik

This includes personalized marketing efforts that cater to individual consumer preferences, aiming to increase customer loyalty and drive sales both online and in-store.


Leveraging Data for Business Decisions

As such, data analytics likely plays a pivotal role at Express, guiding decisions from inventory management to customer engagement strategies.

A table of people sitting around papers showing data analysis

Source: Kindel Media/Pexels

By analyzing consumer data, Express can better anticipate market trends and customer needs, enabling more strategic inventory and pricing decisions to optimize sales and customer satisfaction.


Community-Focused Retail Locations

Express is transitioning from traditional mall locations to community-focused retail spaces (via Yahoo! News).

Clothes hanging off the rack with red labels showing 70% off

Source: Artem Beliaikin

This strategy reflects a shift towards creating more personalized shopping experiences that are integrated into local communities, potentially increasing customer engagement and loyalty in less saturated markets.


Environmental and Social Governance Initiatives

Express is also actively engaging in Environmental and Social Governance (ESG) initiatives to enhance its market appeal to environmentally and socially conscious consumers.

A person is pictured holding a small plant while standing in a dry desert

Source: Wikimedia

This includes adopting sustainable practices in product development and operations, which not only improve the company’s reputation but also align with increasing consumer expectations for corporate responsibility.


Analysis of Competitive Landscape

Express is navigating a retail landscape where competitors are also adapting to economic pressures and shifting consumer habits.

A woman shopping for clothes in a retail store

Source: Freepik

While other competitors may be downsizing, others are innovating in product diversification and digital transformation, offering key lessons and strategies that Express could consider to enhance its competitive edge.


Future Outlook and Strategic Directions

Looking forward, Express aims to leverage its strategic changes to stabilize and grow its business. This includes focusing on expanding digital capabilities, exploring new market territories, and continuing to innovate its product offerings.

An image of a woman as she stares through the window of a store on the street

Source: Freepik

The success of these strategies will be crucial for Express to overcome its current challenges and reshape its future in the retail industry.