Amid declining sales, apparel retailer Express has hired restructuring adviser M3 and law firm Kirkland & Ellis to help restructure nearly $280 million of debt, according to the Wall Street Journal, which cited people with knowledge of the matter. If the company is unable to successfully restructure its debt, a bankruptcy filing could be imminent.
Express’ ability to avoid bankruptcy hinges on whether its lenders will agree to provide more liquidity or loosen repayment options, and whether the company’s vendors will continue shipping goods without tightening payment schedules, the sources told WSJ.
Express, which has faced declining sales for some time now, brought in former Tyson Foods exec Stewart Glendinning as CEO in September 2023 to turn around the business. In Q3 2023, which ended Oct. 28, 2023, and was reported on Nov. 30, 2023, the company posted a net loss of $36.8 million, compared to a net loss of $34.4 million in Q3 2022. The company’s total debt at the end of the third quarter was $274.7 million, and Express said at the time that it had engaged advisors to conduct “a comprehensive review of its business model” in order find ways to meaningfully reduce costs.
The company had hoped that its partnership with brand management firm WHP Global would help in this regard. The partnership, which began in December 2022, transformed Express into a multi-brand fashion retailer that includes Express, Bonobos and UpWest and included plans to expand the monetization of the Express brand through global licensing partnerships.
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“Express has the right building blocks in place with a strong portfolio of brands, a high-potential partnership with WHP and a premier omnichannel platform,” said Glendinning in a statement commenting on the company’s Q3 2023 earnings. “Our efforts to unlock our full potential and improve our performance are already underway,” he added at the time, although it appears those efforts may not be producing results fast enough to save the ailing chain.
