Fashion retailer Express has reported another loss, but that it has been “gaining momentum” despite financial loss for the second quarter of this fiscal year.
Despite the loss, Express CEO Tim Baxter expressed optimism, citing improvements in the business – particularly in the women’s and e-commerce divisions.
He noted that second-quarter net sales and diluted loss per share aligned with their outlook, indicating positive momentum.
The company has initiated cost-cutting measures, identifying $80 million in savings this year, with plans to reach $120 million in 2024 and $200 million by 2025.
Additionally, Express secured a $65 million term loan and anticipates a $52 million CARES Act refund later this year, strengthening its liquidity.
“We are transforming Express to create shareholder value and are focused on driving long-term profitable growth and delivering positive free cash flow in our core Express business, leveraging our omnichannel platform to reduce costs, and accelerating our growth and profitability through our strategic partnership with WHP Global,” concluded Baxter.
Neil Saunders, MD of GlobalData, offered a contrasting perspective, noting that while Express seemed confident and was on track for a better second quarter, it did not materialise.
“Express has slumped further and faster, all off the back of weak trading in the prior year,” he remarked.
“On the bottom line, last year’s profit of $7 million has evaporated and been replaced with a net loss of $44.1 million.”
Saunders explained that the decline is caused by middle-market consumers who are now willing to cut down the stores they visit or buy less from to save costs.
“In our view, very little about the Express proposition stands out, he continued.
“The assortment is bland, styles are mediocre, and prices are too expensive for the type of products offered.”
Despite the management’s effort to correct this, Saunders said it may be “too little too late” to save the business from “being anything but a disaster.”
EXPR is a multi-brand fashion retailer whose portfolio includes Express, Bonobos and UpWest. The company operates an omnichannel platform as well as physical and online stores.
