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The group Phoenix Retail is expected to acquire Express assets out of bankruptcy in a deal worth $174 million.

Nearly two months after Express Inc. filed for Chapter 11 bankruptcy, a U.S. bankruptcy judge approved a sale providing an exit path.

Express disclosed when it filed for bankruptcy in April that it received a nonbinding letter of intent to acquire a majority stake in its stores and operations. That letter came from a consortium led by the firm WHP Global. The menswear retailer’s properties include the Express, Bonobos and UpWest brands.

Express is No. 117 in the Top 1000, Digital Commerce 360’s ranking of North America’s leading retailers by online sales. It is classified in the Apparel & Accessories category.

Phoenix Retail to buy Express assets out of bankruptcy

The newly formed group set to purchase Express assets out of bankruptcy took on the name Phoenix Retail, LLC. Participants, according to the stalking horse bid that was approved June 14, also include WHP and “affiliates of certain of the Debtors’ landlords, specifically, SPG Fashion Retail, LLC and BPR Acquisitions LLC.” The mall owners it referred to, Simon Property Group and Brookfield Properties, also signed on to the initial letter Express shared in April.

In the approved deal, Phoenix will agree to pay a total of $174 million. That total includes $136 million in cash and taking on $38 million in liabilities. The parties expect the deal to close by June 21.

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Phoenix Retail announced its intentions on June 14. It said that after the deal closes, it plans to “operate all direct-to-consumer (DTC) commerce in the U.S.A. for Express and Bonobos.” As it focuses on the two brands, it expects to keep 450 stores open, along with ecommerce operations. In doing so, it expects to keep 7,000 jobs intact. Phoenix lists “WHP Global, an affiliate of Simon Property Group, Brookfield Properties, and Centennial Real Estate,” as the parties forming the entity.

“We are thrilled to partner with Simon, Brookfield, and Centennial to launch Phoenix,” said Yehuda Shmidman, chairman and CEO of WHP Global in the announcement. “Today’s court approval and the formation of Phoenix marks a vital step in our mission to save Express Inc. and continue serving millions of customers who love the Express and Bonobos brands.”

Schmidman expressed optimism that the stores would be better positioned coming out of the bankruptcy proceedings.

“With the restructuring actions accomplished during the Chapter 11 process, we believe Express is now well-positioned for a powerful path forward, benefiting all stakeholders, including our valued vendor partners, licensees, landlords and dedicated team,” he stated.

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Why Express filed for Chapter 11 bankruptcy

News that Express was preparing for possible Chapter 11 bankruptcy filing broke in February. The retailer reported $274.7 million in debt in results from its third fiscal quarter of 2023. That was up from $235.4 million a year earlier. It also recorded an operating loss of $28.7 million and a net loss of $36.8 million during that period.

The company began restructuring its debt and ultimately filed for bankruptcy on April 22. At the time, it reported assets of between $1 billion and $10 billion, alongside liabilities of between $1 billion and $10 billion.

WHP invested in Express as far back as 2022, buying a 7.4% stake for about $25 million. The following year, it amassed a 60% total interest in the retailer. The firm previously took a controlling position in the parent company of Toys R Us and Babies R Us. It also partnered with Guess Inc. in a deal to acquire the apparel retailer Rag & Bone in February.

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