After several years of downward spiraling sales, the last few quarters have seen Express slowly clawing its way back toward profitability, thanks in part to new CEO Tim Baxter. Its third-quarter earnings, released Thursday, showed $488 million in sales, down from $515 million in the same quarter last year. Still, that beat estimates and second-quarter earnings.
One of Baxter’s first orders of business after being appointed in May, alongside developing a new, more nimble corporate strategy, was handpicking new members of the company’s executive leadership board to help turn things around. Many of Baxter’s executive choices proved to be from brands that are going through the same struggles as Express, like Victoria’s Secret, and not the digitally-native brands whose strategies Express wants to emulate.
Digitally native brands have become a massive force in fashion recently, and they routinely outperform traditional brick-and-mortar brands in key areas like attracting Gen-Z customers. Brands across the spectrum, including Express, have shown an interest in operating more like a digitally native brand, but they’re not expanding the pool of talent from which they pull their leadership.
“To breathe new life into Express, hiring strategies should have included executives from successful digitally-native brands, as well as media companies,” said Syama Meagher, CEO and founder of Scaling Retail. “To be successful in today’s market, brands must think like media companies and develop strategies that support experiences across e-commerce, brick-and-mortar and marketing. Only through the 360-degree lens can they capture and develop a new customer base.”
In August, Baxter appointed two new executives: Malissa Akay as chief merchandising officer and Sara Tervo as chief marketing officer. Akay came from Lane Bryant, where she was general merchandising manager, and Tervo worked for years at Victoria’s Secret, first in the marketing department of Pink and then as evp of marketing for all of Victoria’s Secret. She also served as chief marketing officer at tween brand Justice. Victoria’s Secret closed dozens of stores this year and Lane Bryan was reportedly being considered for sale by parent company Ascena as recently as September.
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Some of Express’ contemporaries have either followed the same path, like when Tapestry hired Joanne Crevoiserat from the struggling Abercrombie & Fitch, while others have been bolder in where they hire from, like when Gap appointed Adidas’ Alegra O’Hare as their chief marketing officer.
Rather than integrate experience from digitally-native brands into the main company, Express has instead focused that talent into its sub-brand, UpWest. But even there, it’s hedging. While UpWest, which was launched last month, includes people who have worked with Untuckit and ThirdLove, UpWest’s CEO Jamie Schisler is a 15-year Express veteran.
In a Thursday morning earnings call regarding the third quarter, Akay said the company had in the past held onto trends past the point of relevance and was slow to introduce new products. A major focus of the past six months has been speeding up the production timeline and release schedule to put out new product as a faster pace. Lauren Bucquet, founder of DTC brand Labucq said that the faster and more flexible product release schedule was part of the reason she left traditional big fashion retailers behind to start her own digitally-native brand.
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“Finding inspiration and talent from the DTC space is less important than having a talent pool with a proven track record of delivering on customer expectations, via an understanding of who their customers are, why and how they shop, how to establish trust by delivering value, as well as how their customers want to engage with the brand,” said Marta Rattazzi, director of retail at enVista.
Digitally native fashion is still a young category and the pool of candidates to draw from is smaller. Additionally, many of the executives at those brands are either founders themselves or were hired from the same big traditional fashion retailers, like Maiden Name’s designer Alix Freireich, who came from Ralph Lauren. What’s more, brands may be hesitant to poach from the DTC world due to recent stories about the problematic leadership styles at brands like Thinx, ThirdLove and Away, which have not painted these executives and leaders in a positive light.
Still, digitally native brands like Everlane and Warby Parker have the attention of the younger audience that Express is targeting.
“Express is a brand for the Gen X, and like many traditional mall brands — Victoria Secret, Limited, Macy’s — the challenge is to cultivate millennials and values-driven Gen Z,” Meagher said. “How Express will survive the next years will depend on leadership and strategy decisions made today. Strategies must include authentic partnerships, 360-degree customer touchpoints, innovation across product development and diffusion brands. Gen Z doesn’t need a brand reinvented , they need a new version of what Express means to them.”
