Express Turns to Aggressive Cost Cutting and Brand Marketing



Cost control

Retailers are increasingly cutting down on costs and enhancing productivity to improve their bottom line in challenging retail conditions. In 2016, Express (EXPR) took up an extensive cost containment effort to improve margins. Under the cost-cutting initiatives, the company expects to achieve $44 million to $54 million by 2019.

By improving store sustainability and productivity across operations, Express expects to lower occupancy and SG&A (selling general and administrative) costs. The company also expects savings to come from the extension of its factory sourcing base, which will significantly contribute to merchandise margins. The company achieved its targeted savings of $9 million in fiscal 2016. In fiscal 2017, Express expects to achieve $20 million in savings.

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Brand marketing

To drive more customers, Express has resorted to a strong brand awareness campaign. The company has been collaborating with big names in fashion to enhance brand visibility. The company has brought on board Karlie Kloss as it brand ambassador. Kloss is a top American model.

In October 2017, the company roped in NBA stars like Denzel Valentine, Jamal Murray, Brandon Ingram, and John Collins as ambassadors. Merchandise is being revamped to cater better to the customers’ needs. The company is also working to improve its store layout to make customers’ shopping experience better.

Express has also made many changes to Next, its loyalty membership program. At the fiscal 3Q17 earnings conference call, Express’s CEO, David Kornberg, stated that by speeding up the customer sign-up process, the company achieved its 2017 signup target way ahead of the stipulated time.

Express is also focusing on its human resource component. The company has underscored that it is working on creating a good work environment that is also conducive to growth.

In the next article, we’ll look at Express’s recent quarterly performance.


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