Express Inc. begins a CEO transition
July 23, 2014 12:39 PM
Specialty apparel chain retailer Express Inc. will have a new CEO following the second retirement of long-time top executive Michael Weiss early next year.
Express, No. 96 in the 2014 Internet Retailer Top 500 has announced that CEO Michael Weiss, who came out of retirement in 2004 to lead the company, will be replaced in the top management spot by David Kornberg.
Kornberg will take over as CEO following Weiss’ retirement on Jan. 30. Kornberg joined Express in 1999 and currently serves as president in charge of men's and women's merchandising, design and U.S. store operations. He began his career in the United Kingdom, spending 10 years at Marks & Spencer PLC. He also once served as the vice president of business development for Disney Stores, a part of Walt Disney Inc.
Weiss began his career with Express in 1980 when it was a part of Limited Brands (No. 25), now known as L Brands Inc. He became president of Express in 1982 and served as CEO for the first time from 1997 through 2004. He was named chairman in 2011.
Before he retires, Weiss still must contend with several big issues, including a possible sale of the company. Express received a letter from investment banking firm Sycamore Partners in June about acquiring the company. Sycamore currently owns about 10% of outstanding shares. In a letter to the Express board in June, Sycamore asked for access to detailed financial information in order to prepare a price-per-share offer for all remaining shares and a formal bid.
In response, the Express board formed a special committee to look into the Sycamore request, the company says. So far there has been no action on any deals pending the outcome of a review by the committee, Express says. The Express board also adopted a preventive takeover plan that prevents any shareholder from acquiring 10% or more of the company’s outstanding shares without board approval.
Sycamore specializes in acquiring apparel retailers and has been busy making acquisitions in the last two years. In December 2013, Sycamore acquired The Jones Group Inc. (No. 200), which owns and operates multiple apparel and accessories brands and e-commerce sites such as NineWest.com, in a deal valued $2.2 billion. Sycamore in June acquired youth apparel chain retailer The Hot Topic Inc. (No. 252) in a deal valued at $600 million.
Also in June, Sycamore Partners purchased the intellectual property assets of bankrupt and apparel retailer Coldwater Creek (No, 174), which is going out of business.
For the first quarter of fiscal 2014 ended May 3, Express reported:
- E-commerce sales declined 2.4% to $69.0 million from $70.7 million in the first quarter of 2013.
- Total sales decreased to $460.7 million from $509.4 million in the first quarter of 2013, a decline of 9.6%.
- Comparable-store sales, including e-commerce, decreased 11%.
- Net income was $5.1 million, down by 84.3% from net income of $32.4 million in the first quarter of 2013.