US apparel retailer Express, Inc has issued a positive trading update as it noted around 95% of its stores have now reopened and its strategic transformation remains on track.
The company said it expects to reopen the remainder of its stores in the coming weeks, and as part of the process, has enabled ship from store capabilities in over 330 locations to support online demand, and online pick-up in over 275 stores.
With each wave of store openings, sales and traffic improved steadily week over week through the third week in June, with sales outpacing traffic due to higher conversion levels. Comparable sales for open stores sequentially improved from down over 50% in early May to approximately negative 15% by the third week in June.
Traffic also improved, from approximately negative 65% in early May to approximately negative 30% by the third week in June. As Covid-19 cases began to spike in several states in late June, Express saw declines in both sales and traffic in Arizona, California, Florida, and Texas, which were significant enough to impact total results, it said.
Express added results in stores have been negatively impacted by reduced mall traffic due to the pandemic and the cancellation of June and July product – the latter causing the assortments to not yet be fully reflective of the company’s new vision but deemed prudent in order to effectively manage liquidity.
Improvement, however, has been seen in online sales and traffic on Express’ website and mobile app, which reflects positive consumer response to the new product. Digital penetration to the total has remained elevated even as stores have reopened.
“While the recovery of our industry will clearly take some time, our strategic transformation remains on track,” said CEO Tim Baxter. “The majority of our stores are now reopened, traffic and sales have steadily improved and our e-commerce demand was positive in the month of June. We are encouraged by our customers’ response to the new Express product vision and brand positioning, and remain focused on what we can control as we continue to drive the Expressway Forward strategy and advance towards our long term objective of profitable growth.
“As we began the first quarter and launched our strategic transformation, we had significantly reduced our inventory levels in order to reposition our assortments to reflect our new product edit for the spring season. At the onset of the pandemic, we further reduced receipts by more than US$100m which negatively impacted our ability to do that. We will continue to take the decisive and appropriate actions necessary to ensure sufficient liquidity throughout the duration of the pandemic and resulting economic uncertainty.”
Express outlined its Expressway Forward plan in January. The three-year corporate strategy outlines key initiatives based on the company’s four foundational pillars of product, brand, customer and execution.