Fashion apparel retailer Express plans to cut 150 jobs by the end of the third quarter.
The disclosure accompanied the release of the company’s preliminary second-quarter results on Thursday. Express this week said it has identified opportunities to reduce $200 million in annual expenses by 2025. The company plans to achieve $150 million in annualized expense reductions by 2025, plus another $50 million in sourcing, production and supply chain efficiencies.
CEO Tim Baxter said in a statement that the company has identified and implemented $80 million in reductions for 2023 and $120 million for 2024. The savings in fiscal 2024 include the workforce reduction, which is expected to generate about $30 million. In May, the company said it had identified and implemented $65 million of annualized cost reductions for fiscal 2023 versus fiscal 2022. On Thursday, Express announced an additional $15 million of savings for 2023.
Express expects to incur $5 million in severance, benefits and restructuring costs related to the workforce reduction. The company said Friday the layoffs predominately affected associates in the corporate office and some field leadership changes.
Two C-suite leaders also left the company this year. Chief Operating Officer Matthew Moellering retired May 5 and Chief Merchandising Officer Malissa Akay left the company in July as part of the previously announced expense reduction initiatives.
Second-quarter net sales at Express will likely range from $400 million to $450 million, which is in line with the company’s previously announced outlook, the company said.
“Net sales for the Express brand improved sequentially throughout the second quarter driven by the corrective actions we have taken to address imbalances in our women’s assortment architecture,” Baxter said. “These results give us confidence that we will continue to see improvement in net sales for the Express brand in the back half of the year.”
Baxter also said the integration and performance of the Bonobos brand is on track. Express and brand management firm WHP Global completed their acquisition of Bonobos from Walmart in May for $75 million. Express and WHP Global, a retail investment and brand management company, have an intellectual property joint venture under which WHP owns 60% and Express owns 40%. WHP Global took a 7.4% stake in Express in December.
Express this week also confirmed it authorized a reverse stock split. The reverse stock split is expected to take effect on Aug. 31. The company said the reverse stock split should enable Express to regain compliance with New York Stock Exchange listing standards.
The NYSE in late March notified Express that it was at risk of delisting after the company’s average closing share price remained below its minimum price threshold of $1.00 over a 30-trading-day period.
“As we transform [Express] to create shareholder value, we are committed to driving long-term profitable growth and delivering positive free cash flow in our core Express business. We are conducting a comprehensive review of our business model to identify actions that we believe will meaningfully reduce pre-tax costs and enable a more efficient and effective organization,” Baxter said.
