Express 2014 Annual Report Download - page 10

Our Products
The majority of our products are created by our in-house design team, and we believe we have developed a
portfolio of products that have significant brand value, including the Editor pant and 1MX shirt. We focus on
providing our customers with attractively-priced merchandise that is well-constructed and made from quality
materials that are designed to last for several seasons, and believe our customers value our consistent fits and
detailing.
We design our products and display them in our stores and online in a coordinated manner to encourage our
customers to purchase multi-item outfits as opposed to individual items. We believe this allows us to better meet
our customers’ shopping objectives while differentiating our product line from competitors. On average, our
customers purchase two to three items per transaction. We monitor cross-selling trends in order to optimize our
in-store and online product assortment and collection recommendations.
Design and Merchandising
Our internal design and merchandising teams work together to design and offer fashionable, quality merchandise
that we believe is consistent with our brand image and appeals particularly to our target customer demographic.
We have strategically located our design studio on 5th Avenue in New York City to ensure that our staff of
designers are immersed in the heart of New York City’s fashion community.
We develop four seasonal collections per year and then subdivide them so that new products are introduced more
frequently in our stores, providing on-going freshness to the existing merchandise assortment. In addition, we
have the ability to fast track specific items, which allows us to bring the latest trends to our customer more
quickly. This design process is a collaborative planning effort among design, merchandising, manufacturing,
planning and allocation, and finance departments.
Sourcing
Our Sourcing Methods
We utilize a broad base of manufacturers located throughout the world that we believe produce goods at the level
of quality that our customers desire and can supply products to us on a timely basis at competitive prices. We do
not own or operate any manufacturing facilities and, as a result, contract with third-party vendors for the
production of all of our merchandise. We purchase both apparel and accessories through buying agents and
directly from vendors. In exchange for a commission, our buying agents identify suitable vendors and coordinate
our purchasing requirements with vendors by placing orders for merchandise on our behalf, ensuring the timely
delivery of goods to us, obtaining samples of merchandise produced in factories, inspecting finished
merchandise, and carrying out compliance monitoring and administrative communications on our behalf.
We purchase the majority of our merchandise outside of the United States through arrangements with
approximately 60 vendors utilizing approximately 285 manufacturing facilities located in approximately 20
countries throughout the world, primarily in Asia and South and Central America. The top five countries, based
on cost, from which we source our merchandise are China, Indonesia, Vietnam, Sri Lanka, and the Philippines.
Our top 10 manufacturing facilities, based on cost, supplied approximately 28% of our merchandise in 2014. We
purchase our merchandise using purchase orders and, therefore, are not subject to long-term production contracts
with any of our vendors, manufacturers, or buying agents.
Quality Assurance and Compliance Monitoring
Each supplier, factory, and subcontractor that manufactures our merchandise is required to adhere to our Code of
Vendor Conduct and certain other purchasing terms and conditions, including those related to product quality.
This is designed to ensure that each of our suppliers’ operations are conducted in a legal, ethical, and responsible
manner. Our Code of Vendor Conduct requires that each of our suppliers provides minimum wages and benefits,
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