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Will Express Pull Off its Product Strategy Reboot?

With 95 percent of brick and mortar back in action, mall-based fashion retailer Express said sales and traffic are getting better with each wave of store openings, a positive sign for its Expressway Forward Strategy.

“As we began the first quarter and launched our strategic transformation, we had significantly reduced our inventory levels in order to reposition our assortments to reflect our new product edit for the Spring season,” said CEO Tim Baxter. “At the onset of the pandemic, we further reduced receipts by more than $100 [million] which negatively impacted our ability to do that. We will continue to take the decisive and appropriate actions necessary to ensure sufficient liquidity throughout the duration of the pandemic and resulting economic uncertainty.”

The retailer began its first quarter in February, but temporarily shut stores in mid-March to curb the coronavirus outbreak. It began reopening some stores in May.

Baxter said the company is “encouraged” by customers’ response to the new Express product assortment and brand positioning, even though assortments do not yet fully reflect the company’s new vision. The retailer cancelled its June and July product lines, a move that was deemed “prudent in order to effectively manage liquidity.”

So far, Express said early sales results suggest customers are in favor of the new product line. Express said comparable sales for open stores sequentially improved from “down over 50 percent in early May to approximately negative 15 percent by the third week of June.” Sales outpaced traffic due to higher conversion levels, the retailer said. In addition, traffic also improved from a negative 65 percent in early May to about negative 30 percent by the third week in June.

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Helping to make shopping easier in the era of new social distancing rules, Express said it has enabled ship-from-store capabilities in over 330 locations to support online demand. It has also enabled buy online, pick up in store capabilities (BOPIS) in more than 275. All of its more than 500 stores, including retail and factory outlets in the U.S. and Puerto Rico, will be BOPIS-enabled by the end of the third quarter, around Aug. 1.

Express said it has also seen continued improvement in online sales and traffic on its website, and mobile app. That data “reflects positive consumer response to the new product,” the company said. “Digital demand has improved throughout the quarter and delivered a positive comp in June due to an increase in both traffic and conversion. Digital penetration to the total has remained elevated even as stores have reopened,” the retailer added.

However, Express has seen sales and traffic fall off in states like Arizona, California, Florida and Texas where COVID-19 cases are surging, and that has significantly impacted its overall results.