Another mall clothing retailer is now at high risk of bankruptcy as it prepares for debt restructuring, The Wall Street Journal reports.
Apparel retailer Express Inc. is preparing for a possible debt restructuring that could include a bankruptcy filing “within weeks,” The Wall Street Journal reported Monday, citing sources familiar with the matter.
According to the report, Express has hired M3 Partners and law firm Kirkland & Ellis.
Both entities specialize in debt restructuring, reports Retail Dive.
The retailer is looking to avoid a Chapter 11 filing by restructuring its debt outside the bankruptcy process, the report said.
Express reported total debt of about $275 million at the end of the third quarter, an increase from $235.4 million a year before.
During the company’s last earnings call in November, recently appointed CEO Stewart Glendinning acknowledged the company made some missteps: Among other factors, there was a misalignment between its assortment and customer demand.
Express took a hit during the pandemic as its core offering — business casual — fell out of favor as work-from-home surged.
“Unfortunately, my previous assessment of Express’ fragile financial situation leading to a possible bankruptcy due to declining revenue, gross margin profits and ballooning debt of $280 million is a foregone conclusion,” Shawn Grain Carter, a retail industry consultant and professor at the Fashion Institute of Technology at the State University, said in an email to Retail Dive.
“With high-interest rates, the retail company must decide between the ‘lesser of two evils.’
Moreover, until they fix the waning consumer demand for their merchandise and elevate the brand and product mix, financial wizardry will not resolve their retail woes.”
And after the New York Stock Exchange warned of a potential delisting in late March, Express executed a 1-for-20 reverse stock split, which decreased outstanding shares to 3.7 million from 74.9 million.
That stock split enabled Express to regain listing compliance with the New York Stock Exchange.
Around the same time, Express said it planned to cut 150 jobs by the end of the third quarter.
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Also Read: A Popular Essential Retailer Is Now Closing 72 Locations
Other Economy News Today
Another grocery store now makes unexpected closures after not being “able to capitalize on the area”, sources report.
A Lidl store has announced that it would soon close down – and the news has upset customers, reports The-Sun.
The message was sent out to employees on Thursday, February 8, by Lidl’s vice president, according to the Index Journal.
They explained that the closure was due to several economic factors.
These included “not meeting sales expectations” and “not being able to capitalize on the area.”
“This marks a continuing trend of shutting down stores in low-income and rural areas across the Southeast,” the message also said.
The store closure is reportedly set for the end of February so shoppers will only have around two weeks to visit that location.
Lidl is a German grocery store chain that also established itself in the US and has grown to over 173 locations, mostly on the East Coast, according to ScrapeHero.
Shoppers in Greenwood were upset by the news, according to the Index Journal.
Customer Eric Outz said he had not heard about the closure and said he would later talk to one of his family members who worked at the store.
“I think it’s a good store,” he said.
“I feel bad for them,” Eric said about the employees.
Other customers also shared their thoughts on the closure on Reddit.
“I’m actually devastated. I’ve lived in Greenwood for 5 years and go to that Lidl at least every week, usually twice a week,” one Redditor shared.
“It’s better than basically every other grocery store in town, but people just stick to what they know.”
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Also Read: A US Company Now Declares An Unexpected Bankruptcy
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