Express Rises on Plan to Trim Costs and Shutter 100 Stores

(Bloomberg) -- Express Inc. jumped on Wednesday after the apparel retailer unveiled a strategy to improve profit and reduce costs, including the shuttering of 100 stores.

Columbus, Ohio-based Express said it expects to see $80 million in annualized savings over the next three years. The 100 closures include nine that already ended operations last year and 31 slated to close by the end of this month. Thirty-five more will shutter by the end of January next year, according to a statement.

Shares rose as much as 25% to $5.20 in New York trading, the biggest move in more than a month.

The company’s strategy also includes initiatives such as relaunching a loyalty program and private-label credit card, as well as boosting e-commerce sales. It also expects to spend $50 million to $60 million annually, which will go to improving online sales technology and revamping stores, for the next three years.

“This will of course take some time, but we have a clear path,” Chief Executive Officer Tim Baxter said.

Many apparel retailers face a grim outlook as consumers shift online. Express already said on Jan. 14 it would cut 10% of jobs at its Ohio headquarters and at its design studio in New York City.

The company now expects same-store sales, a key metric of retail health, to be down about 3% for the fourth quarter. It narrowed earnings per share projection for the quarter to a range of $0.17 to $0.19 on an adjusted basis, compared to the previous outlook of $0.16 to $0.21

To contact the reporter on this story: Sally Bakewell in New York at sbakewell1@bloomberg.net

To contact the editors responsible for this story: Crayton Harrison at tharrison5@bloomberg.net, Jonathan Roeder

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