By closing 100 stores in the next two years, Express aims to save around $80 million annually over the next three years, as reported by CNBC.
The clothing retailer said it will close 100 stores by 2022, which will involve layoffs – though as of Wednesday (Jan. 22), no specific number was given.
Express’ shares were up 18 percent after the news was reported. The company has a market value of $313 million, but saw its shares fall 21 percent over the last year.
That is in keeping with the general depression among U.S. malls, which have seen more than 9,000 store closures in the last year, including Gap, Forever 21 and Sears, among others. Macy’s announced their plan to shutter dozens of locations. Mall vacancies reached an all-time high last year, with more vacant stores than at any time during the last two recessions.
Among shoppers, the trends have been to pull back from spending so much on apparel or to rely on rental companies like Stitch Fix and Rent the Runway to get clothing items on a temporary basis.
Express CEO Tim Baxter, who was appointed in June of 2019, said the company has spent the last six months developing a strategy to return the company to stable growth and a mid-single-digit operating margin.
Express said nine of the stores slated to close were already dark, and 31 were expected to close by the end of the month. Another 35 will close by the end of January 2021.
The company still operates more than 600 stores in the U.S. and Puerto Rico, including factory outlet locations.
The layoffs were announced as a restructuring of the workforce, with the company saying roughly 10 percent of their staff at the Columbus, Ohio headquarters and a design studio in New York will be impacted.
Express has narrowed the range for its fourth-quarter earnings outlook, with an eye toward the low end. Their shares were between 17 cents and 19 cents on Wednesday (Jan. 22) and were expected to drop 3 percent during this quarter, which includes the holiday season.