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Express to Close 50 Stores After Poor Q1

Express, Inc., the men’s and women’s specialty retailer, revealed its disappointing first quarter net sales Thursday, and said it will close approximately 50 stores in the next 36 months.

First quarter 2014 net sales decreased 10 percent to $460.7 million from $509.4 million in the first quarter last year. E-commerce sales declined 2 percent, following a 48 percent increase over first quarter sales in 2013, the company reported.

The store closures, primarily at the natural expiration of their leases, are expected to result in profit improvement of $5-$8 million once all are shuttered, the company noted. Because the closures will begin at the end of this fiscal year, or the start of the next fiscal year, no costs or savings associated with the planned closings have been included in the company’s guidance.

Express chairman and chief executive officer Michael Weiss, said the company anticipated a very challenging first quarter, but actual results were weaker than expected. “Our business strengthened in April, but to the degree that we anticipated when we formulated our first quarter guidance. While external challenges contributed to the decline in our first quarter performance, we also did not execute as well as we could have,” Weiss said.

Second quarter results will be impacted by the need to move slow selling spring inventory and a Memorial Day event, which Weiss noted did not successfully drive traffic as successfully as last year. The company also expects to benefit from cost saving initiatives and upon the completion of its debt refinancing, lower interest expense.

Weiss reported that 17 Express Factory Outlet Stores are exceeding the company’s plans and are projected to contribute to a stronger second half. “In light of this performance, we are accelerating future outlet store openings,” he revealed.