DISCLAIMER
This is in no way, shape or form, fluid and function, an analytical, qualitative or intelligent compte rendu. I am obviously not rich, so obviously I haven't made it with my own thinking, so definitely don't put faith in me. But maybe read and learn some things about a company that is probably going to die soon.
This is an unusual post for me; I absolutely abhor short selling, or the placing of bets on the failure of a business. Furthermore, I wish to disclose that I did send an email to the investor relations of Express Corporate stating my beliefs, and several steps they could take to reverse the decline, to try and reach out to a new generation, while also creating a foothold in the growing artisan clothing movement. I also wish to disclose that I only wear express jeans, have worn them since age 13, and currently am wearing a pair of meggings (men's jeggings - men's jean leggings).
This post isn't so much advice on investing in a company, more of a warning that perhaps there are much, much safer bets to make, or even smarter YOLO plays if that really is your thing.
Thesis/TL;DR
Express has failed to maintain a foothold in their previous market crowd, losing out a bunch of my generation to banana republic, free the people or whatever other clothing stores there are now. And rightfully so, aside from their jeans, their T-shirts are garbage, I like their dress shirts but the colours are atrocious, and I really don't feel like spending 150$ on a niceish looking coat that I know I am just not going to pull off. They failed to make in-roads with the younger generation, have absolutely no allure to an older generation, and their men's section has shrunk over the years to be completely removed in specific stores.
Furthermore, Express has failed to rotate their business into the e-commerce trends that others (shout out to my homey GAMESTOP) have. Furthermore, if you think they are going to be intelligent, think again! Here is their SEC filing on their future rebrand:
s22.q4cdn.com/300448...sentation-vFinal.pdf
Scroll down to page 12. Express EDIT is their big idea. They are going to solve all their problems by changing their name to a little fancier sounding and try to attract their customer base back by looking like a White House Black Market. Oof.
Financial Reasonings aka How I learned to stop worrying about the stock price
Look here:
investors.express.co...filings/default.aspx
First 5 filings are insider trading, where basically the whole board are disposing shares.
whalewisdom.com/stock/expr
Even hedgefunds and banks are disposing shares. In fact, as of 12/31/2020, it looks like the only people buying shares were retail investors, with Charles Schwab buying a huge amount of shares.
The way retail investing was explained to me, we are the vultures circling, waiting for something much bigger to make the kill so we can feast afterwards, or waiting for something to die. We aren't supposed to hold all the power, to be able to make the kill, because retail is low volume, low capital and low coordination. Coordination obviously being illegal, which is bullshit because bigger funds are allowed to do it at lunch over finger sandwiches after golfing a few rounds.
I do not believe big money is coming back, in fact I believe the board has done this on purpose. Sales have been decreasing, express has been dying and failing every attempt at a recovery:
finance.yahoo.c...EXPR/financials?p=EXPR
So what did they do this year? They took on more inventory than they are actually worth. No, I am not kidding:
s22.q4cdn.com/300448...sentation-vFinal.pdf
Go to page 9. They went from $207 million in free cash in 2019, to $56 in 2020. Furthermore, they went from $220 million in merchandise in 2019 to $264 million in 2020. They can't sell, they have more financial worth being liquidated, especially sitting at a market capitalization just over 200 million.
From their own 10-K page 13:
Our ability to attract customers to our stores that are located in malls or other shopping centers depends heavily on the success of these
malls and shopping centers, and continued decreases in customer traffic in these malls or shopping centers, whether due to the growing
preference for online shopping or otherwise, could cause our net sales and our profitability to be less than expected.
And page 14:
The COVID-19 pandemic could continue to adversely affect our business operations, store traffic, employee availability, financial
condition, liquidity and cash flow
Even they are admitting defeat in their public filing. In fact, read their bullet points for risk on pages 12-15 (investors.express.co...filings/default.aspx March 25, 2021 filing 10-K).
From page 19:
We depend on key executive management and may not be able to retain or replace these individuals or recruit additional personnel,
which could harm our business.
We depend on the leadership and experience of our key executive management. The loss of the services of any of our key executives could have a
material adverse effect on our business and prospects, as we may not be able to find suitable individuals to replace them on a timely basis or
without incurring increased costs, or at all. We believe that our future success will depend greatly on our continued ability to attract and retain highly
skilled and qualified personnel. There is a high level of competition for experienced, successful talent in the retail industry. Our inability to meet our
talent requirements in the future could impair our growth and harm our business.
I don't know how routine this wording is, but this just fuels my belief they plan on giving themselves cash bonuses instead of stock, detailing the need for all of the board. If I was a serious investor, I would look into getting the services of one of the law firms that look for wrong-doings to look at Express. They have increased risk themselves, failed to make moves to benefit the business, and have made significant disposals of their own holdings in recent business, promoting a narrative that the business is floundering. This smells wrong and feels wrong.
Please go to page 30 of the 10-K. If I knew how to link it into this post, I would, because it is all you need to see to know this company is dead.
Now go to Form S-3 on the express investors filing page:
THEY ARE GOING TO SELL 25 MILLION SHARES FOR A MAXIMUM PRICE OF 4$
That means that they don't even think they can get more than 4$, and I don't understand why they are selling shares when they have nearly 300 million dollars of merchandise on hand that they can't sell. How do I know they can't sell? Because I am wearing 25$ jeans at size 30x30, which is the most common size, I never get to buy jeans on sale. Furthermore, I am being bombarded with emails about more and more sales, where my size (again the most common size and always sold out in the past) is completely available. So yeah, I went long on express jeans, bought a bunch and put them at the back of my jean cubby so I have jeans for the future. Because Express isn't going to be around for much longer to sell them to me.
Disclaimers
I am stupid, and stupidly writing this in my beloved Express Jeans. I do not believe nor advise short selling, nor taking a position against a company. It is immoral, unethical, and frankly quite dangerous.
I just don't think you should invest in Express. And maybe if you are invested, contact a good law firm that specializes in companies playing the bankruptcy game...
This is in no way, shape or form, fluid and function, an analytical, qualitative or intelligent compte rendu. I am obviously not rich, so obviously I haven't made it with my own thinking, so definitely don't put faith in me. But maybe read and learn some things about a company that is probably going to die soon.
This is an unusual post for me; I absolutely abhor short selling, or the placing of bets on the failure of a business. Furthermore, I wish to disclose that I did send an email to the investor relations of Express Corporate stating my beliefs, and several steps they could take to reverse the decline, to try and reach out to a new generation, while also creating a foothold in the growing artisan clothing movement. I also wish to disclose that I only wear express jeans, have worn them since age 13, and currently am wearing a pair of meggings (men's jeggings - men's jean leggings).
This post isn't so much advice on investing in a company, more of a warning that perhaps there are much, much safer bets to make, or even smarter YOLO plays if that really is your thing.
Thesis/TL;DR
Express has failed to maintain a foothold in their previous market crowd, losing out a bunch of my generation to banana republic, free the people or whatever other clothing stores there are now. And rightfully so, aside from their jeans, their T-shirts are garbage, I like their dress shirts but the colours are atrocious, and I really don't feel like spending 150$ on a niceish looking coat that I know I am just not going to pull off. They failed to make in-roads with the younger generation, have absolutely no allure to an older generation, and their men's section has shrunk over the years to be completely removed in specific stores.
Furthermore, Express has failed to rotate their business into the e-commerce trends that others (shout out to my homey GAMESTOP) have. Furthermore, if you think they are going to be intelligent, think again! Here is their SEC filing on their future rebrand:
s22.q4cdn.com/300448...sentation-vFinal.pdf
Scroll down to page 12. Express EDIT is their big idea. They are going to solve all their problems by changing their name to a little fancier sounding and try to attract their customer base back by looking like a White House Black Market. Oof.
Financial Reasonings aka How I learned to stop worrying about the stock price
Look here:
investors.express.co...filings/default.aspx
First 5 filings are insider trading, where basically the whole board are disposing shares.
whalewisdom.com/stock/expr
Even hedgefunds and banks are disposing shares. In fact, as of 12/31/2020, it looks like the only people buying shares were retail investors, with Charles Schwab buying a huge amount of shares.
The way retail investing was explained to me, we are the vultures circling, waiting for something much bigger to make the kill so we can feast afterwards, or waiting for something to die. We aren't supposed to hold all the power, to be able to make the kill, because retail is low volume, low capital and low coordination. Coordination obviously being illegal, which is bullshit because bigger funds are allowed to do it at lunch over finger sandwiches after golfing a few rounds.
I do not believe big money is coming back, in fact I believe the board has done this on purpose. Sales have been decreasing, express has been dying and failing every attempt at a recovery:
finance.yahoo.c...EXPR/financials?p=EXPR
So what did they do this year? They took on more inventory than they are actually worth. No, I am not kidding:
s22.q4cdn.com/300448...sentation-vFinal.pdf
Go to page 9. They went from $207 million in free cash in 2019, to $56 in 2020. Furthermore, they went from $220 million in merchandise in 2019 to $264 million in 2020. They can't sell, they have more financial worth being liquidated, especially sitting at a market capitalization just over 200 million.
From their own 10-K page 13:
Our ability to attract customers to our stores that are located in malls or other shopping centers depends heavily on the success of these
malls and shopping centers, and continued decreases in customer traffic in these malls or shopping centers, whether due to the growing
preference for online shopping or otherwise, could cause our net sales and our profitability to be less than expected.
And page 14:
The COVID-19 pandemic could continue to adversely affect our business operations, store traffic, employee availability, financial
condition, liquidity and cash flow
Even they are admitting defeat in their public filing. In fact, read their bullet points for risk on pages 12-15 (investors.express.co...filings/default.aspx March 25, 2021 filing 10-K).
From page 19:
We depend on key executive management and may not be able to retain or replace these individuals or recruit additional personnel,
which could harm our business.
We depend on the leadership and experience of our key executive management. The loss of the services of any of our key executives could have a
material adverse effect on our business and prospects, as we may not be able to find suitable individuals to replace them on a timely basis or
without incurring increased costs, or at all. We believe that our future success will depend greatly on our continued ability to attract and retain highly
skilled and qualified personnel. There is a high level of competition for experienced, successful talent in the retail industry. Our inability to meet our
talent requirements in the future could impair our growth and harm our business.
I don't know how routine this wording is, but this just fuels my belief they plan on giving themselves cash bonuses instead of stock, detailing the need for all of the board. If I was a serious investor, I would look into getting the services of one of the law firms that look for wrong-doings to look at Express. They have increased risk themselves, failed to make moves to benefit the business, and have made significant disposals of their own holdings in recent business, promoting a narrative that the business is floundering. This smells wrong and feels wrong.
Please go to page 30 of the 10-K. If I knew how to link it into this post, I would, because it is all you need to see to know this company is dead.
Now go to Form S-3 on the express investors filing page:
THEY ARE GOING TO SELL 25 MILLION SHARES FOR A MAXIMUM PRICE OF 4$
That means that they don't even think they can get more than 4$, and I don't understand why they are selling shares when they have nearly 300 million dollars of merchandise on hand that they can't sell. How do I know they can't sell? Because I am wearing 25$ jeans at size 30x30, which is the most common size, I never get to buy jeans on sale. Furthermore, I am being bombarded with emails about more and more sales, where my size (again the most common size and always sold out in the past) is completely available. So yeah, I went long on express jeans, bought a bunch and put them at the back of my jean cubby so I have jeans for the future. Because Express isn't going to be around for much longer to sell them to me.
Disclaimers
I am stupid, and stupidly writing this in my beloved Express Jeans. I do not believe nor advise short selling, nor taking a position against a company. It is immoral, unethical, and frankly quite dangerous.
I just don't think you should invest in Express. And maybe if you are invested, contact a good law firm that specializes in companies playing the bankruptcy game...