Express, Inc. on Tuesday announced the departure of CEO David Kornberg, who will also no longer serve as president or as a member of the board of directors, effective immediately.
He will remain employed by the company through Feb. 21, however. The board has appointed Matthew Moellering to serve as chief executive in the interim while a permanent CEO and president is appointed, according to a company press release.
Moellering, who has been with Express since 2006, has served as executive vice president and chief operating officer there since September 2011 and will continue in those roles while taking on the CEO duties, according to the release. Before going to Express, he served in various roles with former Express owner Limited Brands (now L Brands) and Procter & Gamble, and serves on the board of privately held retailer L.L. Bean, the company said.
Express is one of the retailers formerly owned by Les Wexner's L Brands, and it could be on track to falter in the face of dramatic shifts in shopping habits and fashion sensibilities, much like The Limited, which was once Wexner's flagship brand, but in 2016 filed for bankruptcy and shuttered all stores.
In the third quarter, the apparel retailer's net sales rose 2% to $515 million year over year, as comparable sales (including e-commerce) were flat, compared to a 1% decrease in the third quarter of 2017. E-commerce sales rose 26% to $149.1 million as those comps rose 23%. Operating income fell to $10.2 million from the year-ago quarter's $10.8 million.
At that time, Kornberg said that the retailer's sales to date in November were below its expectations and that traffic was off, but sought to assure investors that its finances are sound. Regarding its holiday sales, the retailer Jan. 15 released a statement only saying that sales were "tracking within the guidance" issued in November, which had included a forecast for a 5%-7% comp decline and was a pull-back of its previous expectation.
"We entered the holiday season positioned to succeed with increased newness as compared to last year," he said in a statement in November. "While the majority of the quarter is still in front of us, we are revising our guidance to reflect a more cautious stance given recent unexpected sales trends. Our financial position remains sound and we continue to have long-term confidence in our brand and business."
Lee Peterson, executive vice president of thought leadership and marketing at WD Partners, gives Express credit for many of its efforts, including its BOPIS and "excellent social media pushes," an accomplishment in a noisy world, but says the retailer is struggling in an ill-defined corner of apparel retail.
"They lack clear brand definition, the old 'raison d'être,'" he told Retail Dive in an email, noting that, while they're trendy, they're not fast fashion, upscale, nor an outlet store. "Shifting to the latest whim seems to have slowed them down. In specialty apparel, you can miss a trend and have a lousy quarter. Or, you can miss two trends and have a lousy year. Either way, in their category, if you're not 'on it' in terms of style, you're going to see a roller coaster performance. The consumer has too many choices and will bail on you in a heartbeat."