Malls thrive when they’re full of tenants that draw people in.
Many mall visits happen for no reason. You’re shopping not to fill a need but rather you see the trip as part treasure hunt and part entertainment.
If you need something, that’s a different type of visit. You might be willing to walk by empty stores if you have to buy shoes to wear with a tuxedo, or you want a specific brand of yoga pants. But nobody goes to a decimated mall just to walk around.
Related: Another popular restaurant chain files for Chapter 11 bankruptcy
These habits require mall operators to make every effort to keep their malls full. And that’s been a challenge as a number of major retail chains, including Macy’s, have been closing hundreds of stores while others have failed entirely.
The situation has pushed two major mall landlords, Simon Property Group (SPG) and Brookfield Properties, to buy some of their struggling tenants. The two real estate companies have teamed up to purchase Brooks Brothers, Forever 21 and J.C. Penney, among other brands.
Basically, the mall operators can’t afford to have more retail chains go bankrupt and leave vacancies in their shopping centers. Buying your tenants seems like a desperate move, but under various partnerships the two mall operators have been able to turn around the brands they own and keep them functional.
Now, Brookfield and Simon have become the owners of another storied mall retailer.
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Express entered bankruptcy with a plan
Express entered bankruptcy with a prepackaged plan to be purchased by a group including WHP Global, the New York brand manager.
In its Chapter 11 bankruptcy filing, the company received a commitment for $35 million of new financing from certain of its current lenders, subject to court approval. In addition, on April 15, 2024, the company received $49 million in cash from the Internal Revenue Service related to the Cares Act.
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The retailer tried to reassure its customers that it would mostly be business as usual.
“We continue to make meaningful progress refining our product assortments, driving demand, connecting with customers, and strengthening our operations,” Express Chief Executive Stewart Glendinning said at the time of the filing.
“We are taking an important step that will strengthen our financial position and enable Express to continue advancing our business initiatives. WHP has been a strong partner to the company since 2023, and the proposed transaction will provide us additional financial resources, better position the business for profitable growth, and maximize value for our stakeholders.”
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Express will exit bankruptcy, close one brand
As part of the Chapter 11 bankruptcy process, Express plans to close about 95 Express retail stores and all UpWest stores. The closing sales at affected stores have already begun (and in some cases concluded).
UpWest, while not as well known as its parent brand, appears to be continuing as a digital-only brand.
The company, using the tagline “Comfort for Good,” says its “purpose is to provide comfort.” Elaborating, the company said: “We are on mission to positively impact people and planet through our clothes and our causes. From striving to use mindful materials in our garments to supporting those in need, we invite you to join us on our journey of comfort for good.”
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Express received court approval for its bankruptcy plan on June 14. It will be purchased by Phoenix Retail, “a newly formed joint venture comprising mall owners Simon Property Group, Brookfield Properties, Centennial, and brand equity and management firm WHP Global,” RetailDive reported.
The court approval “and the formation of Phoenix marks a vital step in our mission to save Express Inc. and continue serving millions of customers who love the Express and Bonobos brands,” WHP Global CEO Yehuda Shmidman said in a statement.
“With the restructuring actions accomplished during the Chapter 11 process, we believe Express is now well-positioned for a powerful path forward, benefiting all stakeholders, including our valued vendor partners, licensees, landlords, and dedicated team.”
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