$260 million in gross proceeds immediately
strengthens EXPR balance sheet
Fashion apparel retailer Express, Inc. (NYSE: EXPR) (the
“Company” or “EXPR”), today announced that it has completed the
previously announced transaction with WHP Global (“WHP”), a leading
global brand management firm. The mutually transformative strategic
partnership advances the Company's omnichannel platform which is
expected to drive accelerated, long-term growth through the
acquisition and operation of a portfolio of brands. EXPR and WHP
have also formed an intellectual property joint venture (the “IP
JV”) intended to scale the Express brand through new domestic
category licensing and international expansion opportunities.
“As our team continues its strong focus on returning the core
Express business to growth and profitability and advancing our
EXPRESSway Forward strategy, our partnership with WHP Global will
allow us to achieve greater scale through non-core domestic
licensing opportunities and international expansion,” said Tim
Baxter, Chief Executive Officer. “The $260 million in gross
proceeds will be used to immediately pay down our high interest
term loan, invest in our omnichannel platform, and pursue
additional opportunities for growth through the acquisition of
brands with WHP, all of which are expected to drive long term,
sustainable value for our shareholders.”
This partnership is expected to provide the following
significant financial and operational benefits:
- Capitalizes on strength of EXPR as a fully integrated
omnichannel platform. EXPR will be ideally positioned to
participate in anticipated retail industry consolidation and pursue
acquisitions with WHP and is expected to expand its brand portfolio
to accelerate growth and profitability. Through synergistic
M&A, EXPR will leverage its platform to drive cost savings and
margin expansion.
- WHP to acquire newly issued shares of EXPR at $4.60 per
share. WHP will make a $25 million common equity PIPE
investment to acquire 5.4 million newly issued shares of EXPR at
$4.60 per share, representing an approximate pro forma ownership of
7.4%.
- Scales existing multi-billion-dollar Express brand through
the IP JV. We expect this partnership to accelerate growth for
the Express brand by leveraging WHP’s licensing expertise to both
expand on our non-core domestic categories and our international
reach. The IP JV is valued at approximately $400 million, with WHP
committing $235 Million to the IP JV for 60% ownership and EXPR
contributing certain intellectual property in exchange for 40%
ownership.
- Strengthens EXPR balance sheet with $260 million in gross
proceeds from WHP investment. This investment provides capital
for EXPR to repay its $90 million term loan and fund EXPR’s first
year guaranteed minimum royalties of $60 million to the IP JV. The
balance of the proceeds will be used for reinvesting in the EXPR
platform and potential future M&A opportunities.
The completion of the transaction was subject to lender consent,
regulatory approvals and customary closing conditions, all of which
were obtained or satisfied. For additional background on the
transaction, please read the announcement press release here:
https://bit.ly/3hfNuOt
Yehuda Shmidman Appointed to Board of Directors
The Company’s Board of Directors (the “Board”) has named Yehuda
Shmidman as a Class II director, effective today.
Mr. Shmidman is a seasoned executive in the brand management
industry, having successfully invested over $3 billion of capital
to acquire, grow and monetize global consumer brands. He is the
co-Founder, Chairman & Chief Executive Officer of WHP
Global.
“I am pleased to welcome Yehuda to the Express, Inc. Board of
Directors and expect that his extensive experience in brand
management will be of great value to our Company,” said Mylle H.
Mangum, Chairman of the Board.
Mr. Shmidman has two decades of experience across multiple
consumer segments including fashion, hard goods, toys, home,
wellness, media, celebrity, sports and electronics, with direct
leadership over dozens of well-known brands including Toys“R”Us,
Anne Klein, Martha Stewart and Peanuts. He is a board member and
executive committee member of the Fashion Scholarship Fund, and a
board observer of Toys“R”Us ANZ.
About Express, Inc.
Express is a modern, multichannel apparel and accessories brand
grounded in versatility, guided by its purpose - We Create
Confidence. We Inspire Self-Expression. - and powered by a styling
community. Launched in 1980 with the idea that style, quality and
value should all be found in one place, Express has been a part of
some of the most important and culture-defining fashion trends. The
Express Edit design philosophy ensures that the brand is always ‘of
the now’ so people can get dressed for every day and any occasion
knowing that Express can help them look the way they want to look
and feel the way they want to feel.
The Company operates over 550 retail and outlet stores in the
United States and Puerto Rico, the express.com online store and the
Express mobile app. Express, Inc. is comprised of the brands
Express and UpWest, and is traded on the NYSE under the symbol
EXPR. For more information, please visit www.express.com or
www.upwest.com.
About WHP Global
WHP Global is a leading New York based firm that acquires global
consumer brands and invests in high-growth distribution channels
including digital commerce platforms and global expansion. WHP owns
ANNE KLEIN®, JOSEPH ABBOUD®, JOE'S JEANS®, WILLIAM RAST®, ISAAC
MIZRAHI®, LOTTO®, TOYS"R"US®, BABIES"R"US®, and a 60% interest in
the EXPRESS® brand. Collectively the brands generate over USD $6.5
billion in global retail sales. The company also owns WHP+, a
turnkey direct to consumer digital e-commerce platform and WHP
SOLUTIONS, a sourcing agency based in Asia. For more information,
please visit https://www.whp-global.com.
Forward-Looking Statements
Certain statements are “forward-looking statements” made
pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements include
any statement that does not directly relate to any historical or
current fact and include, but are not limited to (1) guidance and
expectations, including statements regarding expected operating
margins, comparable sales, effective tax rates, interest income,
net income, diluted earnings per share, cash tax refunds,
liquidity, EBITDA, free cash flow, eCommerce demand, and capital
expenditures, (2) statements regarding expected store openings,
store closures, store conversions, and gross square footage, and
(3) statements regarding the Company's strategy, plans, and
initiatives, including, but not limited to, results expected from
such strategy, plans, and initiatives. You can identify these
forward-looking statements by the use of words in the future tense
and statements accompanied by words such as “outlook,” “indicator,”
“believes,” “expects,” “potential,” “continues,” “may,” “will,”
“should,” “seeks,” “approximately,” “predicts,” “intends,” “plans,”
“scheduled,” “estimates,” “anticipates,” “opportunity,” “leads” or
the negative version of these words or other comparable words.
Forward-looking statements are based on our current expectations
and assumptions, which may not prove to be accurate. These
statements are not guarantees and are subject to risks,
uncertainties, and changes in circumstances that are difficult to
predict, and significant contingencies, many of which are beyond
the Company's control. Many factors could cause actual results to
differ materially and adversely from these forward-looking
statements. Among these factors are (1) changes in consumer
spending and general economic conditions; (2) the COVID-19 pandemic
and its continued impact on our business operations, store traffic,
employee availability, financial condition, liquidity and cash
flow; (3) geopolitical risks, including impacts from the ongoing
conflict between Russia and Ukraine and increased tensions between
China and Taiwan; (4) our ability to operate our business
efficiently, manage capital expenditures and costs, and obtain
financing when required; (5) our ability to identify and respond to
new and changing fashion trends, customer preferences, and other
related factors; (6) fluctuations in our sales, results of
operations, and cash levels on a seasonal basis and due to a
variety of other factors, including our product offerings relative
to customer demand, the mix of merchandise we sell, promotions, and
inventory levels; (7) customer traffic at malls, shopping centers,
and at our stores; (8) competition from other retailers; (9) our
dependence on a strong brand image; (10) our ability to adapt to
changing consumer behavior and develop and maintain a relevant and
reliable omni channel experience for our customers; (11) the
failure or breach of information systems upon which we rely; (12)
our ability to protect customer data from fraud and theft; (13) our
dependence upon third parties to manufacture all of our
merchandise; (14) changes in the cost of raw materials, labor, and
freight; (15) supply chain or other business disruption, including
as a result of the coronavirus; (16) our dependence upon key
executive management; (17) our ability to execute our growth
strategy, EXPRESSway Forward, including engaging our customers and
acquiring new ones, executing with precision to accelerate sales
and profitability, creating great product and reinvigorating our
brand; (18) our substantial lease obligations; (19) our reliance on
third parties to provide us with certain key services for our
business; (20) impairment charges on long-lived assets; (21) claims
made against us resulting in litigation or changes in laws and
regulations applicable to our business; (22) our inability to
protect our trademarks or other intellectual property rights which
may preclude the use of our trademarks or other intellectual
property around the world; (23) restrictions imposed on us under
the terms of our asset-based loan facility, including restrictions
on the ability to effect share repurchases; (24) changes in tax
requirements, results of tax audits, and other factors that may
cause fluctuations in our effective tax rate; (25) changes in
tariff rates; (26) natural disasters, extreme weather, public
health issues, including pandemics, fire, acts of terrorism or war
and other events that cause business interruption, and (27) risks
related to our partnership with WHP Global. These factors should
not be construed as exhaustive and should be read in conjunction
with the additional information concerning these and other factors
in Express, Inc.'s filings with the Securities and Exchange
Commission. We undertake no obligation to publicly update or revise
any forward-looking statement as a result of new information,
future events, or otherwise, except as required by law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230125005743/en/
Express, Inc. Contact Greg Johnson VP, Investor Relations
gjohnson@express.com 614-474-4890
WHP Global Contact Jaime Cassavechia EJ Media Group
jaime@ejmediagroup.com 212-518-4771 x108
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