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.
- Express, Inc. and WHP Global Enter into Mutually Transformative Strategic Partnership, Leveraging a Platform to Build a Portfolio of Brands and Accelerate Long-Term Growth – Express, Inc./WHP Global/Business Wire
- Express, Inc. Reports Third Quarter 2022 Results – Express
- Denim shorts in winter: Express, Gap stores glutted with prior seasons’ goods – Reuters
- WHP Global Signs Deal to Bring Joseph Abboud Brand to China – WHP Global
- WHP Global Acquires Controlling Stake in Toys”R”Us – WHP Global/PR Newswire
- What Went Wrong: The Demise of Toys R Us – The Wharton School
- Will Toys “R” Us kinds help Macy’s have a very merry Christmas? – RetailWire