Express Inc. can count itself lucky as it avoids a liquidation and membership in the retail graveyard.
The bankrupt retailer is set to be acquired by a consortium led by WHP Global. Joining the New York-based brand management firm are mall landlords Simon Property Group and Brookfield Properties.
More from Sourcing Journal
The consortium filed its bid by the May 23 deadline. Others, such as private equity firm Sycamore Partners, also were said to be eyeing the retailer. Sources told Sourcing Journal that no other bids were submitted, paving the way for WHP to close on the transaction.
The deal still requires the nod from a Delaware bankruptcy court, which is expected by June 14 but could come as early as this week at the next court hearing on Thursday. The agenda for the court hearing includes a number of routine items, including court approval for bidding procedures. How the court decides to rule, when there’s been no other forthcoming bid, could determine when WHP secures the go-ahead with its purchase. One individual with knowledge of the bankruptcy proceedings said the court also could decide to set aside a different hearing date for approval of the sale.
Express filed its Chapter 11 petition for bankruptcy court protection in a Delaware bankruptcy court in April. The filing wasn’t unexpected.
Meanwhile, WHP and the mall owners are getting their proverbial ducks in order in preparation to close on the transaction. They’re changing payment terms with Express vendors and their upstream suppliers. Those changes include a 20 percent discount on open purchase orders, including goods ready for summer, and a 10 percent invoice reduction on future purchase orders. The vendors also were told they needed to agree to an extension of payment terms. Express, in communicating the changes to vendors, noted that it was at the behest of the buying group to “facilitate this sale process and enable us to obtain additional financing.”
At the time of the bankruptcy filing, WHP held a 7.4 percent investment stake in Express that was connected to its 60 percent interest in a joint venture licensing agreement with the retailer since January 2023. That venture four months later acquired menswear brand Bonobos for $75 million from Walmart. The WHP deal on the table includes the Express banners and the Bonobos brand. The UpWest label, currently in liquidation, will be shut down. An earlier filing with the bankruptcy court set a minimum baseline value of $10 million for Express’ assets.