REITS JOIN WHP IN BID TO BUY EXPRESS IN CHAPTER 11 SALE
Published on Wednesday, April 24, 2024
Mall giants Simon and Brookfield join forces to offer a lifeline to the retailer.
Express is closing more than 100 stores and expects the balance of its fashion retail portfolio to be acquired by a consortium led by WHP Global, the company disclosed on Monday in a filing for Chapter 11 bankruptcy protection.
In the SEC filing, Express said it has received a non-binding letter of intent from the consortium, which includes Simon Property Group and Brookfield Properties, "for the potential sale of a substantial majority of the company's retail stores and operation."
Express said in the filing it is closing 95 of its Express stores and all 12 of its UpWest stores. Express operates 530 Express retail and Express Factory Outlet stores in the U.S. and Puerto Rico.
Express, which also operates outlets under the Bonobos brand, said it has a commitment from its lenders for $35 million in financing that will allow the company to keep its remaining stores open for business.
The retailer said it expects the Chapter 11 process "to facilitate the sale" of the company to the consortium led by WHP Global, which holds a 7.4% stake in Express. WHP, which bought Toys "R" Us out of bankruptcy in 2018, owns trademarks including Anne Klein and Isaac Mizrahi.
This is not the first time the two mall REITs have participated in the rescue of a retailer on the verge of going under. In 2016, Simon and Brookfield teamed up with WHP's largest competitor, Authentic Brands — whose portfolio includes Reebok and Nautica — to save the teen apparel chain Aeropostale, Bloomberg reported.
Four months after fast-fashion retailer Forever 21 filed for Chapter 11 bankruptcy in the fall of 2019, a consortium of Authentic Brands, Simon and Brookfield bought the retailer's assets for $81 million.
And in 2020, Simon and Brookfield teamed up to acquire J.C. Penney's retail business for $300 million in cash and the assumption of $500 million in debt.
Express reported a net operating loss of $28.7 million in Q3 2023. In March, the company was delisted from the New York Stock Exchange for failing to maintain a market capitalization of at least $15 million for 30 consecutive trading days.
In the SEC filing, Express said it has received a non-binding letter of intent from the consortium, which includes Simon Property Group and Brookfield Properties, "for the potential sale of a substantial majority of the company's retail stores and operation."
Express said in the filing it is closing 95 of its Express stores and all 12 of its UpWest stores. Express operates 530 Express retail and Express Factory Outlet stores in the U.S. and Puerto Rico.
Express, which also operates outlets under the Bonobos brand, said it has a commitment from its lenders for $35 million in financing that will allow the company to keep its remaining stores open for business.
The retailer said it expects the Chapter 11 process "to facilitate the sale" of the company to the consortium led by WHP Global, which holds a 7.4% stake in Express. WHP, which bought Toys "R" Us out of bankruptcy in 2018, owns trademarks including Anne Klein and Isaac Mizrahi.
This is not the first time the two mall REITs have participated in the rescue of a retailer on the verge of going under. In 2016, Simon and Brookfield teamed up with WHP's largest competitor, Authentic Brands — whose portfolio includes Reebok and Nautica — to save the teen apparel chain Aeropostale, Bloomberg reported.
Four months after fast-fashion retailer Forever 21 filed for Chapter 11 bankruptcy in the fall of 2019, a consortium of Authentic Brands, Simon and Brookfield bought the retailer's assets for $81 million.
And in 2020, Simon and Brookfield teamed up to acquire J.C. Penney's retail business for $300 million in cash and the assumption of $500 million in debt.
Express reported a net operating loss of $28.7 million in Q3 2023. In March, the company was delisted from the New York Stock Exchange for failing to maintain a market capitalization of at least $15 million for 30 consecutive trading days.