Malls Stake Their Claim on Legacy Retailers With Express Buyout

Facing an ongoing existential threat from digital-native platforms, malls are doing everything in their power to keep legacy retailers alive — including staking millions to revive a bankrupt fashion chain.

On Friday (June 14), brand management firm WHP Global announced a collaboration with mall real estate companies Simon Property Group, Brookfield Properties and Centennial Real Estate, with court approval to acquire the recently-bankrupt Express, Inc.

“Today’s 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 Chairman and 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.”

In the news release, WHP shared that Phoenix intends to operate direct-to-consumer (D2C) channels for Express and its subsidiary Bonobos, which include more than 450 brick-and-mortar stores as well as the brands’ eCommerce channels. According to Bloomberg News, Phoenix is shelling out about $174 million for the company — $136 million in cash and $38 million in liabilities.

WHP Global entered into a strategic partnership with Express back in January 2023 and has been involved in the bankruptcy proceedings, as have Simon and Brookfield.

This latest investment comes as malls are forced to fight harder for their futures, as consumers accustomed to the convenience of various eCommerce channels no longer need to go to shopping centers to get their various retail needs met. The PYMNTS Intelligence study  “The Replenish Economy: A Household Supply Deep Dive” found that 42% of retail subscribers shop in-store less often because of their subscriptions. That share rises to nearly half for the more than 4 in 10 retail subscribers who participate in Amazon’s Subscribe & Save program.

Additionally, malls also face growing competition from other digital-native brands. In the apparel space in which Express operates, for instance, shopping center staples such as H&M and Zara have been rapidly losing share to digital-first competitors — especially Shein. PYMNTS’ Provider Ranking of Shopping Apps ranks Shein only behind Nike, well ahead of even Amazon and eBay.

Given the Express brand’s strong association with malls, the real estate investment trusts may see an opportunity to improve the brand’s image and make it more successful, which in turn would benefit the reputations of the shopping centers in which it operates.

By focusing on D2C, malls are looking to stoke Express customers’ existing affinity for the legacy brand, looking to keep the chain, which has been a fixture at malls, relevant. To succeed, the joint venture will need to figure out how to keep the brand fresh for Gen Z consumers, as these tend to be the shoppers disproportionately engaging with D2C channels.

“The Online Features Driving Consumers to Shop With Brands, Retailers or Marketplaces,” a report by PYMNTS Intelligence and Adobe, found that Gen Z consumers are the likeliest to prefer brands’ own online stores to retailers’ platforms. Notably, higher-income shoppers are also more likely to prefer D2C channels than their lower-income counterparts.

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