Express set to restructure

Express Inc. has a multi-faceted plan to turn around its image to one of confidence and self-expression.

Leaders of the Columbus apparel retailer announced a new corporate strategy Wednesday morning, at the same time they told the Securities and Exchange Commission they'd be closing 100 stores and targeting $80 million in cost-cutting measures over the next several years, including laying off 10% of home office and New York staff.

CEO Tim Baxter said the four-pronged strategy includes an assortment of new ideas, such as a relaunch of the retailer's loyalty program and the introduction of a new private-label credit card in fall 2020, combined with internal go-to-market efficiencies and improved customer experience. Express plans to spend $50 million to $60 million on capital improvements to remaining stores and its e-commerce operations for a refresh.

"There are some legacy ways of thinking, working and operating at Express that have not served at the brand well, and those must change," Baxter said during Wednesday's presentation. "We have some catching up to do. Over the last several years, Express has lost some of its focus on fundamentals."

The company also intends to make a significant change to its approach to apparel, focusing on a brand designed "to create confidence and inspire self-expression" with a more curated assortment of clothes that emphasize versatility and newness. A "Dream big, dress accordingly" marketing campaign was rolled out alongside the strategy announcement.

"We believe the Express brand can create confidence," Baxter said. "When we feel good in our clothes and know we look good, we have the confidence to try something new, to meet someone new or take a new challenge. We want to help our customers make their aspirations a reality."

Staples like the 1MX button-down shirts and performance sport-coats can continue to be refined for versatile work and casual weekend occasions, Baxter said, but more tailored denim products, especially that can pair with work attire, could help it expand its customer base at the same time.

The Columbus apparel chain reported net sales down 5% to $488.5 million and comparable retail sales down 5% to $356.8 million in the third quarter compared to that time last year. The fourth quarter also likely saw sales down 3% though those numbers won't be reported until March, the company said.

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Baxter, a longtime veteran of Macy's Inc., joined the company as CEO last summer, and COO Matthew Moellering was named president in the fall. Also last year, the company announced the addition of new executives in marketing and merchandising roles, and new sourcing and production and e-commerce leaders were announced Wednesday.

There will operational changes coming for the company too. Moellering said the company will cut its speed-to-market by 20% to 25% and that means realigning with suppliers and improving its instant-buy tools, order management and assortment planning. This might mean fewer product choices and sizes and more aggressive markdowns.

Express has below-average conversion rates, Moellering said, so in-store associates will also get additional training to improve their ability to help customers with styling. Buy online, pick-up in store options will roll out to all stores by the end of 2020 as well, even with the smaller footprint.

Express shares (NYSE: EXPR) tanked almost 10% Tuesday, closing at $4.15 a share, but rallied a bit in after-hours trading. Shares were up more than 17% on the day as of mid-morning Wednesday.