Express files for bankruptcy, plans to close 95 locations

Clothing retailer Express (EXPR) is filing for bankruptcy as the company has grappled with challenges in retaining consumers in the post-COVID era. The struggling retailer has received a potential acquisition offer from WHP Global, as it navigates the restructuring process.

As part of its bankruptcy proceedings, Express plans to implement a strategic downsizing of its physical footprint. The company intends to close 95 of its Express locations and all of its UpWest stores.

Yahoo Finance's Brooke DiPalma breaks down the details.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance.

This post was written by Angel Smith

Video transcript

MADISSON MILLS: Well, from top retailer now to bankrupt, Express is the latest clothing retailer to file for bankruptcy. Yahoo Finance senior reporter Brooke DiPalma has more on this story. Brooke, what can you tell us?

BROOKE DIPALMA: Good morning, Seana. Good morning, Maddie. I mean, certainly, one expert calling this an inevitable destination for Express. That was from Neil Sanders of Global Data. He said that this retailer really has struggled to gain traction with consumers in recent years, especially post-COVID.

It's faced declining sales as it couldn't keep up with that casualization trend. And so here's exactly what we know about Express, that clothing retailer did file for bankruptcy. They received a potential sale offer from WHP Global here. And they already do own a stake in the company since 2023. They own about a 7% stake in Express.

And so ultimately here, what else happened today was Mark Steele, he was named CFO permanently. Now, he has served as interim CFO since November of last year after their then CFO decided to depart. As part of this whole entire process, the company did announce it will also be closing 95 Express retail stores, and it will also be closing all of its UpWest stores.

Now, it's important to note here, guys, that despite these physical store locations, the company will still be operating its express.com, its bonobos.com, and upwest.com. All those online sites still along with all apps, they are still accepting all orders, they're still accepting all coupons. And so really, they're trying to make this status quo for all consumers here. But certainly a big announcement. Once again, Neil Saunders of Global Data saying this was inevitable for the company.

SEANA SMITH: So then, Brooke, what's the next when you take into account the likelihood, I guess, that Express could potentially survive this and come out the other side? What are those odds look like?

BROOKE DIPALMA: Yeah. Well, when you think about it, WHP also owns Toys "R" Us. They also own Ann Klein. So we've seen these sort of companies get bought out, get acquired, and then come out as a different sort of format, a different way. We know Toys "R" Us is now in Macy's. And what Neil really said to me is that this really allows the company to reset the business should they accept that offer. Then they can shut down a number of those badly performing stores and still come out in a different way in a new format.

And we've seen this before. As you can see right here, we've seen JC Penny's, Forever 21, Toys "R" Us all file for bankruptcy. But it doesn't always end up this way. It's important to note here Laura Taylor, Sears, of course, they ended very differently. But really, Express CEO expressing that he aims to really use this as an opportunity to reset the business and is really assessing all is on the table right now.

MADISSON MILLS: It's great to look at retail because it's such a reminder of the fundamentals of these businesses. And Express, the clothes have not been good since I was in college, which is too long ago at this point in time. Like it was good for the peak wearing a blazer out to a party season of fashion--

BROOKE DIPALMA: A good job interview.

MADISSON MILLS: Right. But that is no longer the case.

SEANA SMITH: But I also think the big difference or the huge difference, I would say, between Express and some of those names that you just outlined, specifically Toys "R" Us is the brand that Toys "R" Us has, right? That was such a household name. That was something that everyone associated with a great time in their childhood. You had that strong brand where I don't think you can make that same argument about Express. That kind of changes the dynamic and I think maybe the odds of exactly how this is all going to play out. But I don't know. We'll see.

MADISSON MILLS: No, that's a really good point, Seana. Brooke, thank you so much for joining us as always. Really appreciate it.