American fashion brand Express has announced that it will close all 17 of its Canadian stores, beginning this month, as well as discontinue its Canadian operations through its Canadian subsidiary, Express Fashion Apparel Canada Inc. The retailer will continue to operate 635 stores in the United States.
Express entered the Canadian market in the fall of 2011 amid controversy, when customers complained that prices were considerably higher in its Canadian stores than in the United States. The company's first Canadian location opened at CF Fairview Mall.
The company said that its decision to exit Canada was part of its ongoing strategy to improve profitability, and manage and optimize its store footprint. Express also said that the "challenging Canadian retail environment" and "unfavorable exchange rates" prevented it from meeting expectations.
Express Canada has reportedly filed an Application for Protection under the Companies' Creditors Arrangement Act with an Ontario Superior Court of Justice.
"The challenging Canadian retail environment, coupled with unfavorable exchange rates prevented us from meeting the expectations we had when we entered the market in 2011,” said David Kornberg, president and CEO, Express. “Our overriding focus remains to invest in and direct our resources towards those areas that can generate the greatest return, including growing our e-commerce business, relaunching our customer loyalty program, and continuing to build our omnichannel capabilities to allow our customers to engage with our brand and shop wherever, whenever, and however they want.”
Express Canada currently has 17 stores in Alberta, British Columbia, and Ontario. The retailer intends to conduct store closing sales beginning mid-May. Stores are in some of the country's leading malls, with seven stores in the Greater Toronto Area, two in Ottawa, three in Calgary, Two in Vancouver and one in Edmonton. Express also operates an outlet in Niagara-on-the-Lake.
Subsequent to the closings, Canadian customers will continue to be able to make purchases through the Company's e-commerce website, www.express.com, as well as through the Express mobile app.
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For the fiscal year ended January 28, 2017, Express Canada had net sales of approximately $34 million in U.S. dollars ($45 million in Canadian dollars) and contributed a net loss of approximately $6 million in U.S. dollars to the Express, Inc. consolidated financial statements.
Express will incur charges of approximately US $6 million in the first quarter of 2017 and the remaining US $22 million to US $28 million of exit costs in the second quarter of 2017 related to its Canadian exit.
The company anticipates tax benefits from the move in the range of US $14 million to US $16 million, of which approximately US $7 million is expected in the first quarter of 2017 and the remaining US $7 million to US $9 million in the second quarter of 2017.
Express Canada is seeking appointment of Alvarez & Marsal Canada as monitor in CCAA proceedings to oversee liquidation process for Express Canada.
Express was founded in 1980 by Limited Brands as 'Limited Express' in Columbus, Ohio. Limited sold 75% of Express to Golden Gate Capital Partners in May of 2007. Express is a specialty apparel and accessories retailer of women's and men's merchandise, targeting the 20 to 30- year-old customer.