Can Express find success teaming up with Toys ‘R’ Us’ owner?
Photo: Wikimedia Commons/Nike5748

Express is one of many apparel brands struggling to find new relevance without the draw they once enjoyed during the heyday of the shopping mall. Now the brand is entering into a partnership with a company known for its work recently reviving another iconic retailer.

Express has entered into a partnership with WHP Global, through which the companies intend to scale the Express brand both via domestic category licensing and international expansion, according to a press release. As part of the deal, WHP Global will make a set of financial investments in the retail brand, including $235 million for 60 percent ownership in an intellectual property joint venture with Express.

WHP Global is the current owner of Toys “R” Us. The press release enumerates a few moves the companies intend to take through the partnership, such as:

  • Pursuing acquisitions with WHP and expanding its brand portfolio;
  • Pursuing licensing in non-core categories; 
  • Providing capital for brand acquisition and debt reduction.

In its third quarter earnings in December, Express reported an eight percent comp-sales decline, a gross margin decline of 540 base points, an operating loss of $30 million and a negative EBIDTA of $14 million.

Tim Baxter, chief executive officer of Express, chalked the poor performance up to consumers’ reduced appetite for spending in discretionary categories and an increased desire for deep discounts. The chain had experienced steady growth over five quarters up until that point.

The chain could be in for further hits to its performance as well, as this holiday season Express has been putting “mountains of unsold basics” on clearance to try to clear out packaway inventory, according to Reuters.

WHP Global purchased its controlling stake in Toys “R” Us in 2021. Toys “R” Us had previously filed for Chapter 11 bankruptcy in 2018.

Since the acquisition, Toys “R” Us has moved away from the big box model that characterized the retailer’s original retail presence in favor of strategies like rolling out holiday shops inside Macy’s locations.

In addition to Toys “R” Us, WHP Global owns a number of other U.S. and international brands — Babies “R” Us, Joseph Abboud, Anne Klein, Joe’s Jeans, William Rast and Lotto — and has a controlling interest in Isaac Mizrahi. The company brings in $4.5 billion per year through its brands.

BrainTrust

“WHP’s investment in Express should bode well for the retailer, given WHP’s prior experience transforming several brands that were in trouble mode. “

David Spear

VP, Professional Services, Retail, NCR


“WHP can bring the outside perspective needed to pivot the business, whether it be the basic store format or merchandise mix.”

Gwen Morrison

Partner, Candezent & Retail Cities Consultant


“Express was a key source of white collar workwear. When the pandemic benched those workers, Express and others were deeply affected.”

Cathy Hotka

Principal, Cathy Hotka & Associates

Discussion Questions

DISCUSSION QUESTIONS: What will it take to reinvigorate Express? Is WHP Global a good partner for Express in its mission to kick start its business?

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How likely is Express to become a more formidable retailer over the next five years?

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5 responses to “Can Express find success teaming up with Toys ‘R’ Us’ owner?”

  1. David Spear Avatar
    David Spear

    WHP’s investment in Express should bode well for the retailer, given WHP’s prior experience transforming several brands that were in trouble mode. WHP has a strong operating model. What they are doing with Toys “R” Us can be similarly layered onto the Express brand due to familiar parallels to each of the businesses. In short order, I’d expect WHP’s capabilities in e-commerce, licensing, and PR/communications to be applied to the Express brand in a substantial manner.

  2. Cathy Hotka Avatar
    Cathy Hotka

    Express was a key source of white collar workwear. When the pandemic benched those workers, Express and others were deeply affected. It is hard to know what societal trend or business innovation could turn that around.

  3. Gwen Morrison Avatar
    Gwen Morrison

    WHP can bring the outside perspective needed to pivot the business, whether it be the basic store format or merchandise mix. They must see value in Express’s assets and will most likely leverage to new shopper segments.

  4. Craig Sundstrom Avatar
    Craig Sundstrom

    Not to be cruel, but if “owner of ‘Toys-R-Us’” is at the top of your resume, you’re not likely to get many call backs. The country has too many look-alike (clothes) retailers, and teaming up with some acronymed company few (outside the industry … if even that) have heard of isn’t likely to be the answer for Express.

  5. KarenBurdette Avatar
    KarenBurdette

    I have no idea what WHP has in mind for Express, but I would LOVE to see a once beloved brand reinvent themselves after the pandemic and transform into a 1:1 manufacturing brand online. Perfect fits and reducing waste in the landfills.

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David Spear
David Spear
Member
9 months ago

WHP’s investment in Express should bode well for the retailer, given WHP’s prior experience transforming several brands that were in trouble mode. WHP has a strong operating model. What they are doing with Toys “R” Us can be similarly layered onto the Express brand due to familiar parallels to each of the businesses. In short order, I’d expect WHP’s capabilities in e-commerce, licensing, and PR/communications to be applied to the Express brand in a substantial manner.

5
Cathy Hotka
Cathy Hotka
Active Member
9 months ago

Express was a key source of white collar workwear. When the pandemic benched those workers, Express and others were deeply affected. It is hard to know what societal trend or business innovation could turn that around.

3
Gwen Morrison
Gwen Morrison
9 months ago

WHP can bring the outside perspective needed to pivot the business, whether it be the basic store format or merchandise mix. They must see value in Express’s assets and will most likely leverage to new shopper segments.

2
Craig Sundstrom
Craig Sundstrom
Active Member
9 months ago

Not to be cruel, but if “owner of ‘Toys-R-Us’” is at the top of your resume, you’re not likely to get many call backs. The country has too many look-alike (clothes) retailers, and teaming up with some acronymed company few (outside the industry … if even that) have heard of isn’t likely to be the answer for Express.

1
KarenBurdette
KarenBurdette
9 months ago

I have no idea what WHP has in mind for Express, but I would LOVE to see a once beloved brand reinvent themselves after the pandemic and transform into a 1:1 manufacturing brand online. Perfect fits and reducing waste in the landfills.

1