Express Inc, which owns Express, Bonobos and UpWest, says it made savings of $30m in Q3 2023, and has made $80m worth of savings in 2023 overall.
The retailer says reductions to its marketing and store labour costs helped deliver this, as well as a reduction in total staff at its corporate office, which took place in August. The retailer aims to deliver $200m in annualised savings by 2025.
Alongside these savings, Express Inc says it is “aggressively pursuing” at least $50m in gross margin expansion opportunities by using efficiencies in its sourcing, production and supply chain.
Express Inc also reported a 5% increase in net sales, despite a fall in net sales at the company’s Express and UpWest retail brands.
Express Inc’s CEO Stewart Glendinning said: “During the past three months, I have had the opportunity to assess our operating capabilities, organisational structure and processes, marketing and customer acquisition abilities, and merchandise and product strategies.
“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. Our efforts to unlock our full potential and improve our performance are already underway.”
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Key results for Express Inc in Q3 2023
- Consolidated net sales increased 5% to $454.1m, up from $434.1m in Q3 2022
- Gross margin of 24.1% of net sales, down from 27.8% of net sales in Q2 2022
- $28.7m operating loss, down from an operating loss of $29.5m in Q3 2022.
In a call with investors as the results were announced, Glendinning said: “While there’s more work to be done to improve year-over-year sales results, there were several positive indicators in the quarter.”
Glendinning added that sales of womenswear were improving, which he attributed to a shift in the company’s merchandising strategy, although store traffic was “weaker than expected”. He added that ecommerce sales were also driving improvements in womenswear.
At Express Inc’s Express and UpWest retail brands, net sales decreased 7% to $402m, down from $434.1m in Q3 2022. While retail sales were 4% down overall, a decrease in store sales of 16% was partially offset by a 10% increase in online sales.
Net sales at menswear retail brand Bonobos, which Express Inc acquired in April 2023, totalled $52.1m, which Glendinning told investors “exceeded our expectations”. He added: “The addition of Bonobos has allowed us to leverage our back office and is creating increased purchase leverage with suppliers.”
Glendinning added: “While Express has broad market reach and penetration, Bonobos with annual revenues in excess of $200m has a tremendous opportunity for increased awareness and household penetration to build on its existing scale. The combination of in-store fitting and online fulfilment has created strong customer retention and repeat purchase, and we expect to continue to grow the topline.”
Looking ahead, Express Inc says it expects to add $25m to net sales in Q4 2023 and an operating margin of negative mid-single digits. Glendinning told investors that the company also expects to see a further $40m of savings in Q4, as well as a “meaningful reduction” in inventory during 2024.