A popular mall retailer is now at high risk of bankruptcy as the company’s sales continue to drop and debt mounts.
Express is an American multi-fashion retailer known for its high quality apparel and rather high-priced items.
“Over the last few months, speculation has been mounting about apparel retailer Express’ financial state.
While some might speculate that one big thing has caused the retailer’s failure, that’s just not how bankruptcies work.
Several things have been going wrong over a prolonged period,” says Matthew Debbage, Creditsafe CEO of the Americas and Asia.
According to Creditsafe data, 35% of the company’s owed payments are past due, which amounts to over $3 million.
“On top of this, Creditsafe data reveals that the value of these late payments is well over $3 million.
While this might not seem like a big chunk of money compared to Express’ annual revenue, the fact that the retailer’s DBT (Days Beyond Terms) has increased consistently for the last six months indicates that its cash reserves are likely low, which will only drop even lower if sales continue to decline, operating costs keep rising and its debt load grows,” he continued.
“When you combine all these factors, I can see why some analysts are speculating that the company could be at high risk of bankruptcy.”
Debbage believes the company should be taking steps to prepare for a Chapter 11 filing (even if it ends up not needing one).
This will essentially help the company restructure its financials to keep its operations going.
“What Express needs to be thinking about right now is how it can cut operating expenses with a recession looming and consumer spending expected to drop significantly,” he wrote.
Other Economy News Today
A second Walmart partner has now filed for unexpected bankruptcy after only four years in business.
Hello Bello launched in 2019 exclusively at Walmart locations, the chain’s website, and the Hello Bello website.
The company, which sells premium baby diapers at an affordable rate for all, has now filed an unexpected Chapter 11 bankruptcy.
“Founded by parents Kristen Bell and Dax Shepard, along with Sean Kane (co-CEO), Jay McGraw (co-CEO), and Jennifer Pullen (CFO & COO), the complete line of products is designed to give every parent access to high-quality, better-priced everyday essentials that are better for babies, budgets and the planet,” the company shared on a press release.
Hello Bello has reached a deal to be sold and has filed for Chapter 11 bankruptcy protection to make that happen.
“Hello Bello has reached a deal to be purchased by Hildred Capital Management, a healthcare-focused private equity firm that seeks opportunities to create value in middle-market companies,” reports TheStreet.
“To facilitate the acquisition, Hello Bello and its affiliates have filed voluntary petitions for relief under Chapter 11 in the United States Bankruptcy Court for the District of Delaware.
The Company is seeking approval of the proposed transaction pursuant to section 363 of the United States Bankruptcy Code, which will subject the proposed transaction to higher or otherwise better offers,” the company shared in a press release.
“Given macroeconomic trends, including inflation and increased shipping costs, we believe that this course of action is the best path forward to ensure that Hello Bello continues to bring families the highest quality and most environmentally friendly products at affordable prices,” said CEO Erica Buxton.
The company says it expects to continue running operations as normal during the bankruptcy proceedings.
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