Retail Bankruptcies: Life in the ‘Express’ Lane
Business and retail media are filled with stories of companies that are in the express lane towards restructuring and holding huge sales on their way toward bankruptcy. It has become such a popular topic of speculation that one online source even gives odds of bankruptcy filing.
Over the past week, the media was placing odds on the bankruptcy chances of Express Inc. The retail clothing brand (which also owns Bonobos) has about 500 locations, making it a significant MULO (multi-location) retailer.
We are not going to report on the chances of Express surviving. Enough outlets are already in on that “drive.”
Instead, we’re going to talk about how today’s media and leadership play roles in reporting the success (or failure) of retail brands.
Express brought in a new CEO (Stewart Glendinning) in September 2023. He had barely had a chance to unpack the boxes in his office when the Wall Street Journal reported in February that the company was getting ready to file for bankruptcy.
The retail world is moving so quickly these days that leaders barely can come up to speed and restructure their businesses before the media reports that a crash lies ahead.
Express is waiting for a $52 million CARES Act payment, according to Retail Dive. Glendinning was put into the unenviable position of responding to the WSJ article.
Do consumers who love the brand even care about what’s going on behind the financial scenes? Probably not.
In fact, they benefit from deep discounts that retailers often offer to improve cash flow. They probably only notice that retail brands are in trouble when they can’t find salespeople or they notice that inventory is dwindling.
So, what lessons can other retail brands take away from the Express scenario?
- Always have a great PR agency on call, so that leadership can focus on restructuring while the agency focuses on managing external messaging.
- When you hire new leadership, enable them to do their jobs to “fix the engine.” And, if your vehicle is sputtering, don’t wait until the last minute to bring in the right help.
- Consider all the situations where retailers filed for bankruptcy but then re-emerged in a new configuration (e.g., Lord & Taylor and Bed Bath & Beyond), relying solely on online sales rather than brick-and-mortar.
The Express storyline may not be quite as exciting as that of The Bachelor, the Oscars, or big sporting events but business media has, like consumer media, hitchhiked on the notion that suspense and alarmist statements create buzz.
And, in the meantime, we can all follow along and see if the 33% odds of Express surviving are accurate. Perhaps one day we’ll have an app where retail analysts can legally bet on bankruptcies.
