Express' debut of the UpWest brand came at an important moment.
The specialty retailer was in the middle of a rocky time financially and strategically, which was acknowledged at the moment of the millennial-focused brand’s debut.
“While our primary focus remains on returning the Express business to long-term, profitable growth, UpWest brings something new and exciting to the market,” Tim Baxter, CEO of Express, said in a statement at the time.
It was the fall of 2019, and the UpWest line would go on to feature casual apparel, loungewear and sleepwear for men and women. A few months later, the world would be in the midst of a pandemic. People put away their work and going out clothing and instead reached for casual apparel, loungewear and sleepwear.
Not only did UpWest come out with cozy lifestyle clothing, the brand also offered home goods and wellness products, items that soon would become central to a population that was mostly living inside their own homes.
The brand’s central mission of “comfort for good” in order to positively impact the people and planet was also on target with what was being sought out by shoppers. The largest segment of consumers are those that are purpose driven, according to the IBM institute for Business Value, which reported that nearly half of shoppers choose products and brands based on how well they align to their values.
Whether it was fortuitous timing or an on-target business plan, UpWest was soon showing results. By this May, the brand reported a “remarkable” Q1, with sales growth of 68%, according to Baxter. UpWest had 11 stores at the time with four additional locations planned for this year.
“UpWest continues to gain momentum and is well positioned to be a growth engine for our company,” Baxter said.
The right brand at the right time?
In the fall of 2019, around the time of the launch of UpWest, Express was placed on a Retail Dive watchlist for its elevated risk of bankruptcy.
At the start of 2020, the retailer announced a 10% cut in its corporate workforce. About a week following that notice, the company said it was closing 100 stores and unveiled a turnaround strategy, dubbed the Expressway Forward. The retailer then bookended the year by cutting another 10% of its workforce after reporting a net sales decrease of 34% and a net loss of over $90 million. In early 2021, analysts stated the retailer was “hemorrhaging cash.”
But, the company was putting its new plan in place, including launching its Express Edit stores, which had a smaller footprint and a curated product selection. The concept garnered interest from shoppers, and showed potential to transition Express' retail strategy and “unlock value,” according to a March note from MKM Partners.
UpWest continued to grow during that time, and Express saw similar results with the brand as it did with its Express Edit stores. “We’re coming into these locations, we are gaining new customers through the physical store location, and our digital business in those surrounding zip codes is accelerating pretty significantly,” Baxter said on a call with analysts.
Because even though it was launched as a digital brand, like many other DTC companies, UpWest soon decided to move into traditional brick-and-mortar retail.
Taking cues from the DTC playbook
The $100 billion DTC market in the U.S. is currently accelerating, with more companies setting up physical stores, as those locations act as a channel for sales but also a means of marketing a company.
“Omnichannel, a combination of online and offline presence, is going to be the norm for DTC brands,” e-commerce data analysis company PipeCandy wrote in a recent report on direct-to-consumer brands. “Most brands have a foot in each, although they choose to focus more on either of the channels.”
While some DTC companies are learning ways to expand their reach, not everyone is convinced that Express can be a leader in the space.
“DTC brands were fueled by trustworthy, like-minded founders that gained trust and credibility to their millennial customers by being ‘just like them’. It will be hard for a corporate brand like Express to duplicate this magic formula,” Quynh Mai, founder and CEO of Qulture, said via email. “Express is a bit late to the DTC party.”
Additionally, a number of direct-to-consumer companies, which were once seen as disruptors in retail, are starting to stumble right as consumers are becoming more cautious with their spending due to inflation.
UpWest has also adopted another strategy DTC brands have leaned on in recent years: forming partnerships with traditional retailers. Allbirds has partnered with Nordstrom, intimates company Parade announced it would be sold in select Urban Outfitters stores, and a few weeks ago Glossier inked its first wholesale partnership with Sephora.
How will UpWest partner up? As of this publication date, it is unknown — Baxter only mentioned that the brand was collaborating with a “prominent national retailer” that will be revealed later on this year.
In the meantime, the company is sticking with its commitment to be a purpose-driven brand. UpWest opened two stores this year in New York and partnered with environmental nonprofit GrowNYC to build a community garden in Brooklyn and raise money for the organization throughout the year.
How far UpWest will go is yet to be seen. It was launched at an opportune time with an opportune assortment, but if other DTC companies are any indication, nothing is guaranteed.
Express itself sees promise and potential for the comfort-driven brand. “UpWest is a catalyst for growth that I expect will deliver long-term shareholder value for Express,” Baxter said last year.