Dive Brief:
- Express Inc. on Thursday announced that CEO Tim Baxter resigned from his position and as a member of the board, according to a company press release.
- Stewart Glendinning has been appointed to the chief executive role and as a member of the board of directors, effective Sept. 15.
- Glendinning most recently served as group president of prepared foods at Tyson Foods.
Dive Insight:
One day after reporting Q2 earnings, Express has announced its chief executive is exiting the company.
The fashion apparel retailer saw net sales fall 6.4% year over year. Sales at its namesake Express and UpWest plunged 15%, while overall comparable sales fell 13%. Store comps fell 21% year over year.
In a statement, the company said that Baxter’s resignation is unrelated to the company’s accounting or financial reporting and reiterated its guidance that was announced on Wednesday.
“The Express Board is confident that Stewart is the right person to reinvigorate performance and build the strongest possible foundation on which Express can succeed,” Mylle Mangum, chairman of the Express board, said in a statement. “He is a highly accomplished executive who will bring fresh thinking to the company and our strategies for profitable growth. Stewart shares the Board’s belief that further operating improvements and greater financial discipline are needed to ensure that Express is best positioned to deliver significant, sustainable shareholder value.”
Express hired advisers to help review its business model and achieve $200 million in annualized savings by 2025. The retailer last month announced a reverse stock split, which should help the company regain compliance with the New York Stock Exchange, said it plans to cut 150 jobs by the third quarter.
Baxter was named CEO of Express in 2019. Among other roles, he spent 26 years with Macy’s and the former May Department Stores in various leadership positions, including as the retailer’s chief merchandising officer.
The leadership change reflects the company's emphasis on operational efficiency. But GlobalData Managing Director Neil Saunders, in a client note regarding its second quarter, warned that addressing merchandising weakness must accompany cost cuts.
"These actions are sound, but when margins are down by 1,000 basis points and sales are nosediving it rather suggests that at least as much effort needs to be spent on fixing the brand as is being exerted on reviewing costs," he said. "Express simply cannot shrink its way to success."
