Right from the runway is the Express way. Express operates some 650 stores throughout the US, Canada, and Puerto Rico that sell trendy private-label apparel and accessories targeted to men and women between the ages of 20 and 30. (The chain's fashions are styled to have an international influence and modern appeal.) The stores are located primarily in malls. Express also sells denim and lingerie and operates a growing online business. The chain's international footprint is growing through franchise agreements in the Middle East and Latin America. Launched by Limited Brands (later renamed L Brands) in 1980, Express was taken public in 2010 by the private equity firm Golden Gate Capital.
Express sells through brick-and-mortar retail and outlet stores, an e-commerce operation, and franchises.
Express' brick-and-mortar stores generated about 81% of its total sales in fiscal 2016 (ended 30 January) while its e-commerce channel contributed another 17% to total sales. By merchandise type, apparel made up 88% of the retailer's total sales, while accessories and other items made up an additional 10%. Women's merchandise made up 63% of sales, while men's merchandise made up the remainder. The retailer has around 18,000 employees.
On a purchase order basis, the retailer sources its merchandise from some 60 vendors operating through 306 manufacturing facilities out of 20 countries (mostly in Asia and South and Central America). The top five countries it sourced merchandise from, based on cost, were: China, Indonesia, Vietnam, Sri Lanka, and the Philippines.
Express operates around 650 stores and more than 80 factory outlet stores in 48 US states, the District of Columbia, Puerto Rico, and Canada. California, Texas, Florida, and New York are major markets for the retail chain. The retailer has more than 15 locations in Canada. Overseas, franchisees operate 10 stores in the Middle East, 11 in Mexico and a handful of other Latin American countries, and five stores in South Africa.
Sales and Marketing
Express relies on a variety of marketing vehicles to increase store traffic and build its brand. These include direct mail, e-mail, and in-store promotions, as well as print, TV, and digital advertising. It also makes use of mobile tactics and social networking sites.
The retailer has been boosting its advertising spend in recent years. It spent $110.5 million in FY2016 (ended January), up from $104.6 million and $83.2 million in fiscal years 2015 and 2014, respectively.
Net revenue has fluctuated in recent years.
In fiscal 2016 (ended January), net sales grew 9% on prior year to $2.4 billion due to a 6% increase in dollars per sale on a comparable basis, which the company attributes to a strong product assortment and reduced promotional activity. More disciplined inventory management, faster product refreshes, and speed to market were other factors in strong store performance. Non-comparable sales increased by $69.9 million due to outlet store openings (partially offset by retail store closures).
E-commerce sales were up 11% for the year, and benefited from improved customer experience, including same-day delivery, and improved mobile and web applications.
Net income increased 71% on prior year to $116.5 due to higher sales and lower expenses. Cash from operating activities of $229.6 represented a 47% increase on fiscal 2015.
Express is seeking to grow through a combination of new store openings, growth of its e-commerce operation, and improving sales and margins at existing stores. More recently, it's been closing more traditional stores in favor of opening more factory outlet stores for the budget-conscious in appropriate markets. In fiscal 2016, Express opened 40 new factory outlet stores and one retail store in US, while closing 29 retail stores.
Express made strides in 2015 and 2016 in becoming a slicker outfit. Comparable sales in the period grew 4%, and sales per square foot 7%, on the back on more fashion items, new categories and collections, increased newness, greater inventory discipline including around product testing and purchasing, and better speed to market. The company's e-commerce operation also saw significant improvement – sales via the channel increased 11% due to similar reasons to the above, but also same-day delivery, website improvements, a better mobile platform, and improved customer engagement.
As part of its international growth strategy, Express made exited its franchise agreements in the Middle East and South Africa to focus on the Americas. The company has 18 franchises in Latin America.
Investment firm FMR LLC owns about 11% of the company's shares.
Golden Gate Capital, which bought ailing Express from Limited Brands in 2007, took it public in an IPO worth about $272 million in 2010. The proceeds were used to reduce debt, which stood at $199 million at the end of January 2013 compared with $367 million in January 2011. The IPO followed years of pain for Express, which had closed more than 300 stores since 2005 amid declining sales. During that time it converted most of its remaining locations to a dual-gender format, which the company believes is more productive and profitable.