Express is among the many retailers that are struggling with the shifts in shopping habits. To help cut costs, the retailer recently announced that it would be closing 100 stores by 2022.

Cost-Cutting Strategy

The plan to close 100 stores by 2022 is only one part of the company’s cost-cutting strategies. In the next three years, it hopes to cut $80 million annually in costs.

Nine of these stores have already closed, and 31 will likely close by the end of January. By the time January 2021 comes to an end, another 35 will have likely closed.

Currently, there are more than 600 Express stores, so this is not an insignificant amount to close.

Recent Figures

Recently, Express had its shares go up more than 18 percent based on this news. The market value of the company is about $313 million, and as of Tuesday, the stock had fallen about 21 percent in the past year.

Job Cuts as Well

It should go without saying that the closure of 100 stores will also lead to cuts in jobs. Express has not commented on how many people will lose their jobs and whether there will be any compensation.

The company will also be restructuring its workforce. Express has been clear that this restructuring will affect about 10 percent of the workers at the Columbus, Ohio, headquarters as well as its New York design studio. Even with those figures, experts could not calculate how many people will be affected, and Express has not given any statistics.

The Goal

According to Tim Baxter, the CEO, this move to close 100 stores is part of a strategy that will bring the company back to long-term growth with an operating margin of mid-single digits. This was in line with Baxter’s goals when he became the CEO, which included changing the business trajectory, making a corporate strategy, and choosing the right team. The plan to close 100 stores is part of the result of six months of careful strategy crafting.

Part of a Larger Problem

Express is far from the only store facing recent store closures. The retailer is still doing better than many brands that have closed all of their stores and filed for bankruptcy. In 2019 alone, more than 9,000 stores were closed.

The apparel industry has been hit hard by these store closures, as people change their shopping habits. More people are either reducing spending on clothing or choosing rental or subscription services instead.

Sources:

https://www.cnbc.com/2020/01/22/clothing-retailer-express-to-close-100-stores-by-2022-stock-jumps.html

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