Right from the runway is the Express way. Express operates more than 625 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.
Golden Gate Capital, which bought ailing Express from Limited Brands in 2007, took it public in an IPO worth about $272 million. (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 has 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.
Express operates more than 610 stores in 47 US states, the District of Columbia, and Puerto Rico. California, Texas, Florida, and New York are major markets for the retail chain. The retailer has about a dozen locations in Canada. Overseas, franchisees operates about a dozen stores in the Middle East and a handful Mexico, Panama. and Peru.
Sales and Marketing
Advertising expenses totaled $85.5 million, $83.2 million, and $72.6 million in fiscal years 2013, 2012, and 2011, respectively. 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 social networking sites, such as Facebook and Twitter.
Express stores rang up $2.1 billion in sales in fiscal 2013 (ended January), a 4% increase versus the prior year. Net income fell 1% over the same period to $139 million. The increase was due to a 53rd sales week in fiscal 2013. Excluding the extra week, sales were flat due to decreases in both transactions and average dollar sales, offset by growth in e-commerce sales. Indeed, online sales accounted for 13% of the retailer's sales in 2013 (versus 8% two years ago). Net sales were comprised of approximately 62% women's merchandise and approximately 38% men's merchandise.
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. Indeed, with comparable sales (sales at stores open for more than one year) posting declines in three of the past five years, the retailer is looking to improve the performance of its go-to-market strategy, which is designed to reduce inventory risk and markdowns by offering a product assortment that's more appealing to customers.
Express expects to open about a half a dozen stores in fiscal 2014 (ends January), including four in Canada and two flagship locations in San Francisco's Union Square and Times Square in New York. International growth is key to achieving the company's goal of becoming a successful global brand. To that end, it opened its first four stores in Latin America in fiscal 2013 and added four locations in the Middle East through franchisees. Looking to expand in Central and South America, Express in 2012 partnered with retail franchise operator, Fastco Commercial S.A., to open stores under the Express banner in 10 countries in the region. Alshaya Trading Co. is its development partner in the Middle East.
Investment firm FMR LLC owns about 11% of the company's shares.