Retail

5 retailers that need a strong finish for the year


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Retail is a tough industry in the best of times. Operating during heightened inflation adds another challenge to the sector. Retail Dive took a look at companies that have had a tumultuous or tenuous year, those that need a turnaround – or are in the midst of one – or retailers that have seen substantial C-suite turnover.

In some instances, companies experienced all of the above. And they could really use an end-of-year win. Here, in no particular order, is our qualitative roundup of five retailers that might be at risk next year if they don’t achieve a strong operational and financial finish this holiday season.

1. Joann

Throughout the year, Joann’s financial performance hasn’t been exceptionally strong. 

In December last year, Joann recorded a loss and suspended its dividend payments to improve liquidity. At the same time, the retailer said it had crafted a $200 million cost reduction plan that it hopes to realize by 2025. About half of those savings are expected to come from lower supply chain costs. In March, the company said it borrowed the full $100 million available under a first-in, last-out facility. It used the FILO loan and cash on hand to repay some of its borrowings under an asset-based revolving loan.

Joann had about $1.1 billion in long-term debt at the end of Q3. The company faced a delisting notice from the Nasdaq as its stock was trading below $1 at the time this story was published.

In May, President and CEO Wade Miquelon retired. In September, the company restructured and laid off an undisclosed number of people. In its most recent earnings, Joann’s top-line sales gained post-Black Friday momentum. The company also raised its previously stated cost savings goal to $225 million. “But one seasonal push may not necessarily be enough to save the retailer that has been cash-strapped for some time and suffocating under the weight of its debt,” Creditsafe spokesperson Ragini Bhalla said.

In December, Joann reported net sales declined by 4.1% from last year to $539.8 million. Total comps sales fell 4.1%, while e-commerce sales rose at a rate of 11.5% compared to last year, accounting for 13.1% of total company net sales.

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2. Express

Express debuted 43 years ago in a different era of retail and apparel. But as the worst of the pandemic waned, so too did interest in the company’s main offering. Business casual was out and athleisure was in. Along the way, experts and analysts told Retail Dive earlier this year that Express lost brand awareness.

Last December, Express announced an intellectual property joint venture with brand management firm WHP Global. However, the company’s poor financial performance has persisted. In Q1, the company’s net sales fell 15% to $383 million from $451 million a year ago. Comp sales for the quarter also fell 14%, and the company posted a quarterly loss of $73.4 million, a sharp year-over-year rise. On the news that sales fell 6.4% in Q2 to $435.3 million, the retailer also announced cost-cutting and borrowing initiatives, which included slashing jobs. Third-quarter results were better, with net sales rising 5% to $454.1 million, up from $434.1 million a year ago, thanks to the acquisition of Bonobos from Walmart. E-commerce also rose 10%.

Express planned to cut 150 jobs during Q3. The move was part of plans to reduce annual expenses by $200 million by 2025. The retailer this year also saw noteworthy leadership turnover. 

Chief Operating Officer Matthew Moellering retired in May and Chief Merchandising Officer Malissa Akay exited in July. In September, CEO Tim Baxter resigned; Stewart Glendinning replaced him. And the following month, CFO Jason Judd left. The retailer also completed a reverse stock split.



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