Express has slashed a number of corporate jobs as it adapts its business model to the pandemic-plagued retail environment.
The apparel and accessories chain announced today, in tandem with the release of its third-quarter financial results, that it completed a 10% workforce reduction at its headquarters in Columbus, Ohio. It shared that the layoffs are expected to result in $13 million in benefits next year, in addition to the $95 million cash tax benefit it is anticipating to receive in the second quarter of 2021 as part of the CARES Act signed into law in late March.
“Our streamlined go-to-market process and the implementation of our new inventory planning and management systems have already improved our efficiency and enabled us to operate with greater speed and agility,” CEO Tim Baxter explained in a statement. “Further reducing our workforce was a difficult decision but was appropriate to calibrate the organization to the capabilities of this new operating model.”
For the three months ended Oct. 31, Express recorded an adjusted net loss of $76.2 million, or a loss of $1.17 per share, compared with the prior year’s net loss of $1.8 million, or a loss of 3 cents per diluted share. Revenues fell 34% to $322.1 million, with consolidated comparable sales down 30%. The results widely missed analysts’ predictions of a loss of 51 cents per share and revenues of $376.37 million.
Watch on FN
To bolster its business amid the COVID-19 outbreak, the company announced that it would “aggressively pursue” additional liquidity measures: It has accessed $165 million from its $250 million asset-based credit facility; cut second-quarter inventory receipts by upwards of $100 million; and negotiated $25 million in rent abatements with a number of landlords. It aims to realize about $550 million in liquidity benefits, with about $440 million expected this year — an increase from the previously announced $425 million.
“We have effectively managed that which was within our control, and as I look ahead, I am optimistic about our ability to deliver improved results and cautious about the continued uncertainty brought about by the current environment,” Baxter added. “Our strategy is the right one, the changes to our product presentation and brand positioning are the right ones, and our financial actions are the right ones.”