Express on Thursday announced a 10% cut in its corporate workforce, at its Columbus, Ohio, headquarters and its New York City design studio, "to align its organization with the company's go-forward strategy," which has been developed over the past six months.
The specialty apparel retailer is also streamlining its store management operations to make stores more efficient, according to a company press release.
Express tapped former Macy's merchandising chief Tim Baxter as CEO last year, and said in December that its third quarter 5% comp sales decline was better than expected. The retailer in October had an elevated risk of bankruptcy but has since been upgraded to have a 2% probability of filing in the next 12 months, according to CreditRiskMonitor's analysis and ratings.
Express, formerly part of the Limited stable now known as L Brands, is playing catch-up as rivals like Abercrombie & Fitch and American Eagle have already begun to revamp stores and operations in a tough apparel segment.
Growth in apparel sales in the U.S. is ebbing as shoppers spend more money on experiences, and have less need for apparel as special events and the workplace have become tolerant of more casual attire. Just months ago, Express was among a group of specialty retailers with a 4% to 9.99% chance of filing for bankruptcy (a FRISK score of 2), along with RTW Retailwinds (a portfolio of brands formerly known as New York & Co), Tailored Brands (which runs Men's Wearhouse and JoS. A. Bank), Francesca's and J. Jill, plus department stores Hudson's Bay Co. and Stein Mart.
The retailer has made several moves to keep up with the times, including a subscription service launched in 2018, in-store tech in some locations, a new direct-to-consumer brand, UpWest, and a traveling pop-up concept.
Baxter was hired mid-year last year, after his brief post-Macy's stint as Delta Galil Premium Brands CEO, and after the abrupt exit of CEO David Kornberg from Express a year ago. Ahead of his arrival, the retailer said it would end sales of swim and watches and shutter 11 full-line stores. The company runs more than 600 retail and factory outlet stores in the U.S. and Puerto Rico, and MKM Partners Managing Director Roxanne Meyer last year said more closures are likely.
"Bottom line - [Express]'s old approach to addressing lifestyle has not been effective, in our view," she wrote in a June client note.