NEW YORK — Express is exiting the intimate apparel business.

The 23-year-old apparel chain confirmed market reports Tuesday that it is dropping the lingerie category, which has been a mainstay at the specialty retailer for the past four years and generated about $70 million of the $1.54 billion in total sales at the Express Women’s operation last year.

The decision to drop lingerie was regarded by several manufacturers of underwear, daywear and intimate apparel as a coming tide of further consolidation at retail and in the innerwear industry this year.

Vendors also believe that parentLimited Brands is looking to focus its lingerie business primarily on its Victoria’s Secret brand for greater growth and profitability, as 100 additional stores are expected to be added to the fleet of just more than 900 doors. Last fall, the $2.4 billion Victoria’s Secret opened its flagship lingerie and beauty megastore at Herald Square here about a block away from an Express unit and former Structure store on East 34th Street.

A Limited Brands spokesman said, "Express does plan to exit the lingerie business by the end of 2003. It’s plain and simple: we determined as we grow our dual-gender brand that other categories would benefit from our investment."

Lingerie manufacturers, some of which also do private label for Victoria’s Secret, said they were upset with the changes at Express.

"We had been selling to over 600 doors. We have orders through May, but this is just another annoying sign of the times," said one innerwear executive who did not want to be identified.

Express began reengineering its businesses in July 2002, a move in which the retailer plans to at least double its size and transform into what Express president and chief executive officer Michael Weiss called "a master brand." As reported, the upside potential of the transformation is $4 billion to $5 billion.

The departure of lingerie at Express also comes in the midst of Limited Brands’ integration of its Structure men’s wear into Express to form Express Men’s by converting dozens of stores to "dual-gender" units and converting dozens of Structure units into Express Men’s. The dual-gender stores, now totaling more than 40 units, feature denim bars with merchandise for both sexes.According to Limited, the average Express store posted $360 in sales per square foot and had 6,417 square feet of selling space. Structure, which posted $502 million in total sales, has sales per square foot of $274 and an average of 4,041 square feet. The combined men’s and women’s operations include approximately 635 women’s stores and 370 men’s locations.

Through the Eighties and early Nineties, Express achieved operating profits, as a percentage of sales, in the midteens. But recently, the rate of profitability has diminished to the low-single digits, between 3 and 4 percent a year.

Reflecting this downturn are Limited Brands’ third-quarter profits, which sank a hefty 82.5 percent. Net income for the three months ended Nov. 2 stumbled to $15.8 million, or 3 cents a diluted share, 1 cent above consensus estimates, but down from income of $90.2 million, or 21 cents, in last year’s quarter.

In the apparel group, sales were $890.4 million, up 1.2 percent from the year-ago period. Both sales and margins were below plan, as marketing and promotional activity accelerated in response to softening sales trends. Express results were elevated by knit and woven tops and knit pants and dresses. Men’s results were helped by woven shirts, denim, accessories and suiting elements.

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