Private equity firm Sycamore Partners has set its sights on acquiring young men’s and women’s fashion retailer Express Inc.
In a letter to Express’s board Thursday, New York-based Sycamore–which already has a 9.9% stake in the clothing company–said it was interested in buying the retailer and that it would like to perform due diligence to determine an adequate valuation. Sycamore said that it would submit a bid within 30 days of gaining access to Express’s books.
Express has confirmed receipt of the letter and said it has established a special board committee to determine a course of action it feels would be in the best interest of all stockholders. Perella Weinberg Partners LP and Sullivan & Cromwell LLP will serve as advisors to Express and the special board committee.
The retailer did not fair well in its first quarter ended May 3, 2014 as comparable saels dropped 11 percent and gross margin as a percentage of net sales declined 370 basis points over last year’s first quarter.
Michael Weiss, the Express chairman and chief executive officer, said in a statement last month, “We had anticipated a very challenging first quarter, but our actual results were weaker than planned. Our business strengthened in April, but not 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.”
Express’s shares rose 22 percent to $16.55 in extended trading. At closing Thursday, the stock was down nearly 3 percent to $13.55, valuing the company at $1.14 billion.