Express 2010 Annual Report Download - page 23

our customers who look to us to provide the latest fashions and quality at an attractive value. We believe we have
developed a portfolio of products that have significant brand value, including the Editor pant, Essential and 1MX
shirts, and our Stella, Zelda, and Eva lines of denim. We believe our products offer our customer an attractive
value. We focus on providing our customers with items made from high-quality materials that are designed to
last for several seasons, and we believe our customers have come to expect durability from our brand.
We design our products and display them in our stores 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. In season, 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 team designs high-quality products that reinforce our brand image. Our
products are designed to reflect the latest fashions and colors, and we seek to incorporate high-quality fabrics and
construction as well as consistent fits and detailing. We have strategically located our design studio on
5th Avenue in New York City to ensure that our staff of over 50 designers are immersed in the heart of
New York City’s fashion community and have easy access to inspiration from other high-fashion markets in
Europe and abroad. We believe our dual offices in New York City, New York and Columbus, Ohio provide us a
balanced design and merchandising perspective.
We develop four seasonal collections per year and then subdivide them so that we have monthly product
introductions in our stores. The seasonal design process begins approximately 45 weeks in advance of store
delivery with a collaborative planning effort among design, merchandising, and finance departments. Each
season is carefully planned based on a number of inputs, including the sales from the previous year, recent
fashion trends, and customer feedback. Over the course of the design process, the seasonal assortment is refined
based on in-store tests and continual review of fashion trends. We engage in early season testing across all
product categories and test approximately three-quarters of our merchandise in select stores before placing orders
for our company-wide store base. In addition, our designers establish contingency plans in the event that a
particular product performs differently than anticipated. We assess sales data on a weekly basis in order to make
in-season inventory adjustments where possible, which allows us to respond to the latest trends. We utilize a
broad base of manufacturers located throughout the world that we believe produce goods at the levels of quality
that our customers demand and can supply products to us on a timely basis at competitive prices relative to our
other providers. We conduct extensive post-season reviews of our products to identify areas in which our
merchandising process can be improved. We believe that each of the components of our merchandising model
helps us to maximize our sales and margins and reduce our inventory risk.
Sourcing
Our Sourcing Strategy
Our sourcing approach is focused on optimizing quality, speed of production, and cost of our merchandise and is
a key element of our success. To accomplish this, we have established collaborative relationships with our third-
party vendors and agents. We believe our sourcing strategy maximizes our speed to market and allows us to
respond quickly to customers’ preferences. We have weekly calls with many of our vendors to optimize the use
of fabric and supplies to meet the needs of our customers. We have the ability in our supply chain to place and
receive orders within eight to twelve weeks. Additionally, we have the ability to track popular items, place refill
orders, and re-stock merchandise at our distribution center within five to eight weeks.
Our Sourcing Methods
We do not own or operate any manufacturing facilities and, as a result, contract with third-party vendors for
production of our merchandise. We purchase both apparel and accessories from importers, including through
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