Apparel brand Express Inc. this month launched a new online-only brand called UpWest.
Unlike Express, which focuses on trendy apparel, the UpWest brand will focus on loungewear, sleepwear and casual apparel.
“We see an opportunity to grow a new concept in an adjacent market to Express,” says Express CEO Tim Baxter.
The new brand is targeted at millennial consumers who are looking for comfortable clothes and a philanthropic shopping angle. UpWest will donate 1% of sales, up to $1 million, to charitable organizations. This year, UpWest plans to donate to Freedom Dogs of America, Mental Health America and Random Acts.
“To consumers, comfort is not just a great fabric, it is knowing what the brands you support stand for,” says Jamie Schisler, senior vice president at UpWest. “Giving back is at the heart of our team, and we are proud to support three charities that are aligned with our brand purpose.”
Express and UpWest will be completely separate, each with its own leadership team, designers, merchants, distribution strategies, customer profiles and brand propositions, Schisler says. Shoppers on UpWest.com do not see a mention of Express, and likewise on Express, there is no mention of a new brand.
UpWest also has its own marketing team to drive awareness for the brand, such as through influencers, Schisler says. During this initial launch period, UpWest is planning to host pop-up events for two days in Columbus, Ohio; Chicago; Nashville, Tennessee; Denver; and Austin, Texas. The pop-ups will showcase its products, as well as have events including yoga and meditation.
Express Inc.’s online sales have been a bright spot in declining store and total sales. In its most recent earnings report for its fiscal second quarter 2019 ended Aug. 3, comparable retail sales, which includes both Express stores and ecommerce, decreased 7% compared with the second quarter of 2018. It did not break out ecommerce sales in Q2. In 2018, ecommerce sales increased 19.6% year over year and accounted for 28.7% of overall revenue, Express previously reported.
Express has a “robust strategy” to return the Express brand to growth, Baxter says. Express has previously reported that the strategy includes less discounting and more emphasis on omnichannel services, such as ship-from-store sales and ecommerce orders originating in stores.
“With a healthy balance sheet and positive cash flow generation, Express Inc. is in a strong financial position to be able to also launch a completely new brand to the market,” Baxter says.
Schisler is not providing any sales expectations for UpWest, but says there is a large demand for comfortable products.
“We incubated UpWest as a future growth strategy after exploring white space in the market, and while we believe it has long-term potential, we do not expect it to contribute meaningfully to our financial results in the near term,” Baxter says.
As long as the launch wasn’t expensive, a new direct-to-consumer (DTC) brand makes sense for Express, says Sucharita Kodali, principal analyst at research firm Forrester Research Inc.
“They need to do something to revitalize revenue and there are only so many discounts you can give,” she says. “Taking a page from other DTCs with a comfort, sustainability or pop-up angle makes a ton of sense.”
First, UpWest needs to build an audience and eventually have a large store presence before it makes a meaningful contribution to Express’s bottom line, Kodali says.
Express is No. 103 in the Internet Retailer 2019 Top 500.