Dive Brief:
- The New York Stock Exchange on Wednesday began the process of delisting apparel retailer Express. The company said the NYSE suspended trading of Express’ common stock after its average global market capitalization fell below $15 million over 30 trading days.
- The company’s common stock will now publicly trade on the OTC Pink Market under its former NYSE ticker symbol, “EXPR.” The retailer said the change does not affect its business operations, or reporting obligations to the U.S. Securities and Exchange Commission.
- “Over the past several months, we have taken decisive steps to position Express for the long term, including implementing a series of cost-saving initiatives and streamlining our process to enhance operational efficiency,” CEO Stewart Glendinning said. “We remain focused on continuing to serve our customers and positioning our organization for the future.”
Dive Insight:
As a result of the trading shift to the OTC Pink Market, Express will be part of a less liquid market for existing and potential stockholders, which could further depress the trading price for the company’s stock, the company said in a securities filing.
The NYSE first warned Express last April that it risked delisting over a different concern – its closing share price slipped below $1.00 for a 30-day trading period. Concerns about the company’s financial health spiked again last month following a Wall Street Journal report that Express was preparing for a possible debt restructuring deal that could include bankruptcy.
Should that be the outcome, “although many retail chains have filed for bankruptcy in recent years including Bed Bath & Beyond, Party City, Christmas Tree Shops and others, Express would be one of the first major mall-based retailers to enter Chapter 11 in the post-Covid world,” Sarah Foss, Debtwire’s global head of legal and restructuring, said in emailed comments.
But Glendinning pushed back in a memo to employees, saying Express has “made tremendous progress in our transformation over the past several months,” by implementing cost-savings initiatives. Over the summer, Express initiated a reverse stock split and also laid off about 150 employees. A source close to Express told Retail Dive that as of last month Express had not discussed debt restructuring with its lenders. WHP Global and Express closed on a strategic partnership last January. At the time, WHP took a 7.4% stake in Express, and invested $235 million in a joint venture with the retailer, of which it owns 60% and Express owns 40%.
Express has about 530 namesake retail and factory outlet stores in the U.S. and Puerto Rico. Its portfolio also includes about 60 Bonobos locations and 12 UpWest stores. Analysts have said part of the company’s troubles stemmed from the fact that its core offering, business casual apparel, fell out of favor at the height of the pandemic when work-from-home arrangements surged.
