Express
Hilco Consumer-Retail (Hilco) successfully won a mandate from Express in 2017 to close its Canadian business. The results exceeded management’s expectations, initiating a long-standing relationship between Express and Hilco to address both opportunities and challenges that management faced over the subsequent years.
- Asset monetization mandates included clearance sales, winding down Canada, single unit store closure work in the US and Puerto Rico, as well as larger scale store closure work throughout 2024.
- Advisory mandates included inventory valuation reports and operations due diligence reports.
- Capital deployment mandates included two separate Term Loans into Express to provide incremental liquidity and a DIP loan to facilitate a going concern sale.
From 2018 to 2022, Express engaged Hilco to manage a series of strategic store closures and clearance sales across the United States and Puerto Rico. These efforts were crucial in helping Express reduce its physical footprint by targeting underperforming locations while maximizing recovery value through carefully managed inventory liquidation processes.
Following 16 successful store-closing projects over a 4-year period, Hilco’s expertise was once again called upon in 2024. During this new transitional phase for Express, an additional 115 underperforming stores were closed. Hilco’s involvement ensured a smooth wind-down of non-core locations while maximizing inventory recovery.
In Q4 2020, Express engaged Hilco Valuation Services to conduct an inventory appraisal after a competitor undervalued the company’s assets due to COVID-related factors. Hilco Valuation Services’ appraisal was uniquely informed by Hilco’s extensive experience closing stores for Express, which enabled Hilco Valuation Services to provide a more accurate and higher valuation compared to the competition. The resulting appraisal preserved Express’ liquidity, averting a potential liquidation during the pandemic. Subsequently, Hilco Enterprise Valuation Services performed an intellectual property appraisal. Both valuations, enhanced by Hilco’s comprehensive understanding of Express’ operations, proved crucial in supporting the company’s financing efforts at a critical juncture.
In the Fall and Winter of 2021, Express, like many retailers, was hit hard by staffing shortages exacerbated by the COVID-19 pandemic. To ensure continued operational success during the holiday shopping period, Express engaged Hilco for immediate support. Hilco quickly deployed its Retail SWAT Teams, composed of seasoned retail experts, to stabilize in-store operations.
The SWAT Teams focused on several critical areas:
- Clearing bottlenecks by moving inventory from back rooms to the sales floor, ensuring products were available for customers.
- Ensuring proper merchandising of inventory once it was on the sales floor, maximizing the visual appeal and sales potential of the products.
- Leveraging Hilco’s ReStore for Retail (R4R) virtual store management platform to provide daily reporting and track that inventory was handled efficiently and in a timely manner. This reporting helped identify granular issues, such as stores needing additional hangers to keep inventory properly organized.
By engaging Hilco to address its staffing shortages, Express was able to maximize sales during the peak holiday season.
In November 2022, ReStore Capital provided Express with a $90 million FILO Term Loan to address immediate liquidity needs and support ongoing operations. Shortly after funding, the loan was repaid in January 2023 using proceeds from WHP Global’s acquisition of Express’ intellectual property.
Over the following year, Hilco’s partnership with Express continued to strengthen. Hilco Valuation Services expanded its appraisal scope to include Bonobos after Express acquired the brand in April 2023. This robust relationship set the stage for ReStore Capital to arrange additional financing:
- $65 million Second Lien Term Loan in September 2023
- $25 million new money DIP Term Loan
These loans were crucial in supporting Express during its Chapter 11 filing and facilitating its eventual sale to Phoenix Retail in June 2024. Both loans were fully repaid using proceeds from the sale.
From 2017 to 2024, Hilco played a pivotal role in Express’ business evolution, providing comprehensive solutions across various disciplines. This multifaceted support included store closing events, valuation services, operational assistance during staffing shortages, and capital solutions.
The successful outcomes of these engagements culminated in June 2024 with Express’ acquisition by Phoenix Retail, a joint venture between WHP Global, an affiliate of Simon Property Group, Brookfield Properties, and Centennial Real Estate. This transition marks a new chapter for Express, with the company now well-positioned for future success under new ownership.
