Express Inc. is closing 100 stores by 2022 as it focuses its attention on growing its ecommerce business. Express expects the store closures will reduce sales by $90 million in the next two years, but boost its overall profits. The clothing brand already closed nine stores and will close 66 more by the end of January 2021.
While closing stores will decrease sales, it will also save Express the cost of operating them. The retailer said it expects to save $80 million per year over the next 3 years as a result of the closings. The apparel brand also estimates it can increase its before-tax earnings by $15 million by 2020 if it improves its online infrastructure and uses its remaining stores more efficiently.
Express did not disclose details on what improvements would be made, but expects to spend $50-$60 million in capital expenditures including enhancements to customer-facing ecommerce capabilities and revamped stores.
The brand also plans to relaunch its loyalty program and update its private-label credit card with new benefits, which it expects will reduce marketing cost by letting the brand more accurately target profitable customers.
Express also announced an update to fourth quarter expectations. The company now expects same-store sales, a key metric of retail health, to be down about 3%.
Express is No. 103 in the 2019 Digital Commerce 360 Top 1000.
In other retail news:
- British clothing retailer ASOS Plc Holdings (No. 32) reported that online order volume rose 20% to 27.7 million orders placed during the last 4 months of 2019, but it didn’t disclose revenue figures. Overall sales grew 19.6% for that period to 1.07 billion pounds ($1.40 billion), up from 895.0 million pounds ($1.17 billion) for the comparable period.
- VF Corp. (No. 87), which owns apparel brands such as North Face, Vans and Timberland, reported a 16% rise in ecommerce sales for the third quarter ended Dec. 31 and a 17% rise in online sales for the preceding 9 months. It didn’t break out ecommerce revenue. However, its digital growth outlook for the full year shrank, down to 20% growth as opposed to its earlier estimate of 25% growth. Total sales rose 4.6% for the quarter to $3.38 billion, up from $3.23 billion the prior year. For the year so far, total sales are up 5.5% to $9.05 billion, up from $8.58 billion.