Mall retailer Express has filed for Chapter 11 bankruptcy.
However, an investor group spearheaded by brand management firm WHP Global is trying to buy the company to save.
According to CNBC, the brand announced the closure of 95 shops and every UpWest store.
The closing sales in the affected stores started on April 22, 2024.
However, the remaining Express stores will keep running as usual.
Is This The End For Express?
Express had a news release revealing it had filed for Chapter 11 bankruptcy to “facilitate” the sale of most of its operations and stores.
The interested investor group includes WHP, Brookfield Properties, and Simon Property Group.
The group sent a nonbinding letter of intent to buy the assets and has already secured $35 million in new financing.
The news release revealed:
“The proposed transaction will provide Express with additional financial resources, better position the business for profitable growth and maximize value for the Company’s stakeholders.”
The retailer also got $49 million from the IRS in relation to the CARES Act: an injection of liquid cash that the company will use to shore up its balance sheet.
CEO Steward Glendinning addressed this in a statement:
“We continue to make meaningful progress refining our product assortments, driving demand, connecting with customers and strengthening our operations… We are taking an important step that will strengthen our financial position and enable Express to continue advancing our business initiatives.”
The brand formed in 1980, but has struggled over the past few years due to debt and pricey mall leases.
Express revealed in a court filing that as of March 2nd, its assets amounted to $1.3 billion while its debts totaled $1.2 billion.
Earlier in April, the retailer struggled to pay its vendors on time because of financial issues and a serious cash flow management problem.
Last year, Express partnered with WHP to buy Bonobos’ liabilities and assets from Walmart for $25 million.
The deal happened despite the retailer’s core business struggling, “and cash was tight.”
However, even this action couldn’t stem the retailer’s declining revenue, which has dropped by around 10% since 2019.
“This stands in marked contrast to an apparel sector that has grown strongly over the same period. This has put the company under a lot of financial strain and has resulted in some significant losses. None of this is sustainable which is one of the reasons for bankruptcy.”
By declaring bankruptcy, Express will get some relief and have a better chance to turn around.