NEW YORK — Express won’t settle down into maturity.
After reinstalling its chief executive and reengineering the business, the 22-year-old chain is back on the fast track, seeking to at least double in size and transform into "a master brand."
"We believe Express has a $4 billion to $5 billion potential," stated Michael Weiss, president and ceo of Express, a division of Limited Brands Inc., in an exclusive interview. "When we reach the potential is heavily contingent on the economic environment."
When it comes to making mega projections, Express has credibility, even if it doesn’t have a precise timetable for its ultimate objectives. Express is one of the few fashion specialty chains with a long-term success story, like Talbots, Zara, and up until two years ago, Gap and Banana Republic.
It’s also one of the few retailers with a knack for maintaining a fashion edge without sacrificing volume. It’s all about attitude, hot items, keeping focused on core competencies — denim, knits and tops — and turning huge inventories. Last year, the $2 billion Express women’s chain sold 2.5 million jeans, mostly in the $59 to $80 price range, another 10,000 that were designer-priced around $200, and about five million cut and sewn T-shirts, from $19.50 to $29.50.
Then there’s the corporation’s culture of reinventing the businesses every few years to keep fresh. During the late Nineties, Express dropped its baroque decor and French motifs and adopted a clean, contemporary white palette for a cosmopolitan, jet-set appeal. The divisions also re-engineered to be design-driven, from previously letting the market dictate the assortment, and established separate teams for the different stages of the design process.
Now the retailer is integrating 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 Structure labels are gone, the Express labels are sewn in, and as of last spring, the entire men’s collection was overhauled.
To bolster both Express Men’s and Express Women’s, the company relaunched its content-only Web site July 7, adding men’s wear and more merchandise overall, as well as flash technology for interactivity and faster visuals; a "what’s hot" section; inside looks at how Express operates, and interviews with the design team."This is a pretty darn robust site, considering its depth of content," said Anne Marie Blaire, director of Internet Brand Development, brand and business planning. As far as evolving the site to e-commerce, "It’s not out of the question, but it’s not in the near-term plans," Blaire said.
There’s a series of firsts in line for Express, like launching a national TV campaign July 29, and a real budget for "big events," as one official said. Parties with Express models Karolina Kurkova and Mini Anden are being staged at dual gender "flagships" in Miami’s Aventura mall, here in SoHo at 584 Broadway, and in Los Angeles’s Hollywood and Highland shopping complex, on July 25, July 30 and Aug. 1, respectively.
The whole purpose for all the activity, as Weiss put it: "We’re establishing ourselves as a brand."
And not just any brand. The Limited considers Express, along with its Victoria’s Secret and Bath & Body Works divisions, a "master brand," which Weiss defined as "a very large brand, in excess of $1 billion, profitable and on a track for rapid multiplication of volumes."
What should the Express brand stand for? "It’s young, forward, urban, with a little edge, a real fashion resource to young women, and real cool to young men, but we understand we have to sell a lot of goods," Weiss explained.
Beyond men’s wear, major product extensions at Express are not on the drawing boards.
"Not right now," Weiss said. "We want to do better with what we’ve got. We would like to think the brand name extends to all kinds of fashion things. But the concentration is on apparel, jeans and sportswear, with a bit more wear-to-work apparel than in the past. We are getting more tailored to wear to work, but we are not going to be a suit resource. We believe in doing a few things very well."
Through much of the Eighties and the early Nineties, Express did many things exceedingly well, achieving operating profits, as a percent of sales, in the mid-teens. In recent years, though, the rate of profitability has shrunk way down, to the low single digits, between 3 and 4 percent last year. According to a Bear Stearns report on Limited Brands, Express Men’s is seen suffering a $55 million operating loss this year, while Express Women’s operating profits will come in around $130 million, putting the combined operation at around $75 million to $80 million in operating profits.Markdowns, the intensified promotional climate, increased competition and the internal restructuring that may have distracted the management, have led to declines. Still, Weiss said margins have been increased since the business was reengineered to have its own design and manufacturing teams, and merchandise groups. And he said Express had its "best ever first quarter, in terms of every measure, sales , margin and profit, with a very effective tops presentation, which combined with a highly successful promotional strategy drove results." Comp-store sales rose 7 percent in the quarter ended May 4.
According to Limited, Express Women’s posted $1.54 billion in sales last year. The average store posted $360 in sales per square foot and had 6,417 square feet of selling space. Structure posted $502 million in total sales, with sales-per-square-foot of $274 and an average of 4,041 square feet per store. Effective this year, results from Express Women’s and Structure are combined for reporting purposes. By the end of 2002, Express expects to have 635 women's stores, and 370 men's locations.
Of Limited Brands’ three women’s sportswear divisions, Express remains the biggest and most profitable. Lerner New York has thinner operating profits, and Limited Stores is still losing money, though Weiss predicted that Limited Stores, headed by Jeffrey Sherman, will turn profitable this year. However, Express is far behind Victoria’s Secret and Bath & Body Works divisions in profitability. Those two divisions have operating profits estimated by analysts at around 20 percent, give or take a point or two.
For Express, men’s wear improvements could mean the most to productivity levels and profits, but it’s also the riskiest maneuver. Industry-wide, men’s has been abysmal, and for years Structure has been losing money. What few people remember is that Structure was originally under Weiss’ wing, and originally called Express Men’s when it was launched in 1987 and spun off as a separate division in 1990.
Compared to Structure, Express Men’s has a more tailored, career approach, a strong emphasis on jackets and pants that can be sold separately or together as a suit, as well as ties. With the collection revamped under the Express label, "Structure is losing significantly less money," Weiss said, while acknowledging, "We’ve got to get into the black faster."Also, Structure store signs have begun coming down, and replaced with Express signs, but most Structure signs are still up.
"It will take a few years to totally convert to Express Men’s," Weiss said. "We want to have the store right inside, before the signs on the outside go up."
The process of rolling out dual-gender stores has begun, with 18 currently in operation, and 46 expected by the end of the year. Denim bars selling merchandise for both sexes create a transition point from Express Women’s to Express Men’s in most of the locations.
Also, 50 Structures will be converted to Express Men’s over the next month; 40 have already been converted. In most of those locations, the stores are adjacent and have pass-throughs inside.
Of the 370 men’s locations, 180 will still bear Structure signs. At one time, Structure operated about 550 units, but really never got past a reputation for selling cheesy merchandise. Things were complicated by major trend shifts.
According to Weiss, "the worn out and beat up collegiate, high school look got boring to men, and clothing got hurt because there’s been less of a demand in the workplace. That’s swinging back. Dress shirts and ties are our most rapidly growing categories. Men’s wear is coming back, but there has to be something new that happens. Dressed up clothing and more put-together looks are coming back. We’ll see movement this year."
It remains to be seen whether the conversion to Express Men’s and the formation of dual-gender stores will elevate productivity. "We are trying to ascertain over a period of time whether or not there is a real synergy," Weiss said.
The company has been identifying malls where stores can be converted to dual gender units, and sometimes that leads to less square footage than having separate Express and Structure shops. For example, Weiss noted that in the Hawthorne Mall in Chicago, "We put up a dual-gender store, where there had been separate women’s and men’s stores, and we’re doing 40 percent more business in that store than in the past with less square footage than the two stores combined."Asked if there is continuity in design between the women’s and men’s collections, Weiss said, "Not in design, but there is continuity in terms of attitude. The last thing we want to present is a Von Trapp family look."
At Express Women’s, there’s a higher fashion quotient, and the assortment has broadened, particularly in work wear. Some high-profile locations, such as the 13,000-square-foot, two-level SoHo unit, opened last Thursday at 584 Broadway,sell one-of-a-kind items, conveying a trendier, higher-priced image.
Furthering the impression of being a "designed" brand, there’s noticeably greater detailing on the jeans, sweaters and corduroys, as Express seeks to cater to new customers and those loyal customers that have gotten older and more affluent over years, while continuing to bank on denims, knit tops and sportswear. Activewear was launched last December.
"The business is getting different, not necessarily tougher," Weiss said. "The competitive environment is different. We’re up against fewer but stronger people. The fashion life cycle is no longer about what’s going on now in Europe and will happen in New York six months later and in Chicago a year later. It’s instantaneous. I still go to Europe a lot, and if I see something that is happening there, it means we’ve already missed it. Things are happening fast, but we move very fast."
Asked what’s made Express a long-term success story, Weiss replied, "In my opinion, the key in fashion is not to not fall down. The key is to get up very rapidly. You are going to stumble, but you’ve got to get up very fast, and we have a history of doing that. We hit a bad season every four or five years. My experience is when we have a bad season, the process of retrenching moves us very rapidly forward.
"We have the metabolism to know when we are ready to fight."
But the most potent force behind the success at Express is Weiss himself.
Many retail sources say he has the ability to turn around Gap, which is seeking a new ceo to succeed Mickey Drexler and is experiencing problems on all sides of the business. But Weiss, at 61, seems as engaged as ever at Express, and determined to meet the key objectives for this year, in particular, raising store productivity, and integrating men’s wear. He’s rated a five-star merchant, among the savviest in the industry, and has been at the helm of Express for a long time.The first Express store opened in 1980 at Water Tower Place in Chicago. Weiss was brought in to launch Express as a separate division in 1982. He rapidly expanded the business, and was pumped up to vice chairman of the corporation in 1993 until returning to Express in 1997, to pull it out of arare protracted slump.
Donatella Versace will receive the International Award at the 2018 @cfda awards, which were announced tonight. Tap link in bio for a list of all the nominees and honorees. #wwdnews #wwdfashion (📷: @rahirezvanistudio )
The 2018 @cfda Awards nominees are out! @virgilabloh for @off____white for is nominated for Womenswear Designer of the Year. Tap link in bio for all the nominees. #wwdnews #wwdfashion ( 📷: @simonelezzi)
@chanelofficial is suing high-end vintage retailer @whatgoesaroundnyc for trademark infringement, a move that could cost the retailer millions. The French fashion house claims that it’s not only unintentionally sold counterfeit goods on occasion, but that it’s “gone out of its way to create an association with Chanel,” which does not exist. Read Chanel’s statement on WWD.com #wwdnews (@aitorrosasphoto)
Exclusive: Guillaume Henry has left @ninaricci, the fashion house said on Thursday. “After three years of mutually gratifying creative collaboration, Nina Ricci and Guillaume Henry have together decided that the designer will depart the house after the presentation of the fall-winter 2018-19 collection,” Ricci said in a statement. Get all the details on WWD.com #wwdfashion (📷: @aitorrosasphoto)
“When Bella enters a room all heads turn,” said @peterphilipsmakeup, creative and image director for @diormakeup. Last night, the two celebrated the product launch of Dior’s Lacquer Plump in Los Angeles with other celebs like @parisjackson, @winnieharlow and more. Head to WWD.com to see the rest of the photos from the night (📷: @chelsealaurenla) #wwdeye
“These shirts are an art form, it’s about getting the message out to as many people as you can. It breaks down the pretentiousness of the art gallery,” says Kumasi Sadiki, cofounder of @ebayontheblock, a store that sells merchandise by New York artists who are shifting their attention to clothes as a wearable medium. Pictured here is a design by artist @joegarvey_, one of the first to spearhead this movement. Head to WWD.com to read @mistywhitesidell full story on how their designs have become merch for the underground elite #wwdfashion
@netaporter is dedicating a part of its website – called the Fine Jewelry and Watch Destination – to highlight its high-end jewelry. The hub will feature products on the site, as well as incorporate styling advice and educational content about high-priced jewelry items. Get more details on WWD.com. #wwdaccessories
For “The Cher Show,” an upcoming musical based on @cher’s life and career, @bobmackie is once again collaborating with the singer in designing the costumes. For decades, Mackie has designed glitzy stage costumes and red carpet looks for the 71-year-old Grammy winner. Pictured here is a sketch of some of the pieces in the wardrobe of the musical, which is set to debut in Chicago on June 12 before making its way to Broadway #wwdeye