Known to mall rats for its edgy, budget friendly, trendy apparel and accessories, Express Inc. has experienced a few growing pains in its 30-year tenure, but they hardly show today.
The Columbus, Ohio-based Express, which operates 577 doors, is the sixth largest specialty apparel chain in the U.S. by sales. The chain targets men and women between the ages of 20 and 30, and offers a mélange of apparel, from funky, club-ready tops and destroyed denim to preppy, office-appropriate tailored suits and crisp button-down shirts. At Limited Brands, it moved from experiment to separate division and from single to dual gender in its floor set, spinning off a separate — and short-lived — men’s division in the process. More recently, it’s been among just a handful of retail concepts to move from the umbrella of private equity ownership to a public offering.
A fast-fashion-focused brand — like competitors including H&M, Zara and Topshop — Express also carries footwear, swimwear, innerwear, jewelry, handbags, lip gloss and men’s and women’s fragrances.
Despite the stagnant economy, the firm is slowly growing and layering on new merchandise to its apparel collection.
By yearend, the company said it plans to expand its store count by 22 units, and looks to ramp up sales in its bread-and-butter categories: casual tops and bottoms and wear-to-work. The retailer also introduced woven tops this year, and abandoned the lowprice denim business, opting instead to carry higherprice premium denim.
The company, which went public in May, is the offspring of a retailing giant. Once owned by Limited Brands Inc., which runs Victoria’s Secret, Bath & Body Works, La Senza and Henri Bendel, Express was founded in 1980 under the moniker Limited Express.
The apparel retailer, which at the time carried only women’s clothing and targeted a teenage consumer, tested the concept in Chicago’s Water Tower Place.
In 1981, current president and chief executive officer Michael Weiss joined Limited to run the eight-door experiment. A year later, he was named president and Express became Limited’s first separate division.
In 1984, Express hit its 100-store mark, and just two years later, the store count mushroomed to 250. The company began testing the sale of men’s merchandise in 16 stores the following year.
The men’s fashion line, called Structure, was spun off into its own brand and the first freestanding Structure store was opened in 1990. At the time, Express’ store tally reached 500, and according to the retailer, its volume passed the $1 billion mark in 1991.
With hopes of building its men’s line, Limited turned Structure into its own division in 1992, but the shelf life of the men’s brand was relatively brief. In 2001, Limited integrated it into Express, making it a dual-gender concept. Before its integration, Structure recorded net sales of $502 million, and operated 439 stores, while Express registered net sales of $1.54 billion, and operated 667 stores, according to a regulatory filing in 2001.
In that time period, Limited Brands had been redefining its image. It sold its plus-size concept, Lane Bryant, to Charming Shoppes Inc., as well as misses’ clothing brand Lerner New York/New York & Co. to Bear Stearns Merchant Banking.
The Intimate Brands Inc. division, which included Victoria’s Secret, also was recombined into Limited.
The shift away from apparel to beauty and innerwear foreshadowed the sale of the majority interest in Express to private equity firm Golden Gate Private Equity Inc. in 2007. Prior to its sale, Express operated 658 stores and registered $1.75 billion in sales, representing 16.4 percent of Limited’s total volume of $10.67 billion, according to Limited’s annual report for the fiscal year ended Feb. 3, 2007.
San Francisco-based Golden Gate, which is also an active investor in apparel retailers such as Eddie Bauer Holdings Inc., J. Jill Group Inc. and midtier jeweler Zale Corp., paid Limited $602 million to acquire a 75 percent stake of Express.
After Golden Gate took its stake, Weiss, who had been ceo of Express until 1993 and served as its president from 1997 to 2004, was rehired by the company as president and ceo in July 2007.
Express also converted its stores to a dual-gender format, redesigned its go-tomarket strategy and launched an e-commerce platform.
In the most recent quarter, Express said e-commerce merchandise sales rose 57.1 percent to $27.3 million, from $17.4 million in the first quarter. As a result, secondquarter e-commerce sales were 6.4 percent of total volume, which amounted to $426.5 million, in the period ended July 31. The retailer said on its second-quarter call that e-commerce is a “substantial top- and bottom- line opportunity” that it hopes to grow to approximately 10 to 15 percent of total sales in the near future.
It’s easy to forget that all this talk of growth vehicles and burgeoning sales opportunities came from a recent earnings call — just the company’s second since going public.
In February, 30 years after its inception, Express announced plans for a $200 million initial public offering. It set terms for its IPO in April to raise more than $300 million, giving it a market cap of $1.7 billion. On May 13, Express, trading under the symbol EXPR on the New York Stock Exchange, sold 16 million shares for $17 each, raising approximately $272 million. The stock closed at $16.75 that day.
Since May, the retailer’s stock price has fluctuated from just under $19 a share to just under $13 a share. Last month, shares of Express averaged $14.82 a share. (For more on the IPO, see page 7.)