Express’s New Owner Brings Post-Bankruptcy Hope to Beleaguered Retailer

Express’s bankruptcy filing earlier this month had analysts concerned about the popular clothing retailer’s survival, but news about its new owner has given a glimmer of hope to both Wall Street and consumers alike.

A new report by Forbes reveals that the company entered into a nonbinding letter of intent with WHP Global and other participants, including Simon Property Group and Brookfield Properties. However, it’s the presence of WHP founder Yehuda Shmidman that has analysts feeling bullish about the future of the fashion staple.

Shmidman was the man behind the 2003 partnership between fashion icon Isaac Mizrahi and Target, a groundbreaking move that ushered in a new era of ready-to-wear options by haute couture designers for the average consumer. He was also hailed as the savior of the beleaguered Toys”R”Us brand.

But for Shmidman, the acquisition of popular brands — WHP’s portfolio includes Bonobos and Anne Klein, in addition to Isaac Mizrahi and Toys”R”Us — is a question of intellectual property (IP) ownership, which he feels is an underrated and viable market.

“We currently see very few buyers at the table willing to invest in brands as they wait for the macro environment to stabilize,” he said to Forbes. “The combination of more brands for sale with fewer qualified buyers has led us to the busiest IP market in memory.”

And Schmidman is hoping to take the “partner or perish” approach to Express, as he’d previously done in 2023 when he brokered the retailer’s partnership with Bonobos.

As previously reported, several factors contribute to Express’s financial woes. Rising inflation, with prices up 3.5% from a year ago, has led some consumers to cut back on nonessential spending. Additionally, analysts point to issues within Express’s core business, including its product assortment and competitive positioning.

Neil Saunders, managing director for GlobalData Retail, explained that Express’s failure to adapt to changing consumer preferences, combined with the inflation concerns, contributed to its decline.

Schmidman, however, cited his portfolio of brands’ value of $7 billion as proof that his purchase of beleaguered legacy brands, like Express, can be profitable in the long run. Thanks to the COVID-19 pandemic, owners of floundering brands are looking to unload their IPs, leaving WHP and other investors to buy them at a fraction of their original cost.

It remains to be seen, however, if this approach will work for Express.