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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Description of Business and Basis of Presentation
Business Description
Express is a specialty apparel and accessories retailer of women’s and men’s merchandise, targeting the 20 to 30
year old customer. Express merchandise is sold through its retail stores and website. As of January 29, 2011,
Express operated 591 primarily mall-based stores in the United States and in Puerto Rico. Additionally, the
Company earns royalties from seven stores in the Middle East operated through the Development Agreement
(“Development Agreement”) with Alshaya. Under the Development Agreement, Alshaya operates stores that sell
Express-branded apparel and accessories purchased directly from the Company.
Fiscal Year
Our fiscal year ends on the Saturday closest to January 31. Fiscal years are referred to by the calendar year in
which the fiscal year commences. All references herein to “2010”, “2009,” and “2008” represent the 52-week
periods ended January 29, 2011, January 30, 2010, and January 31, 2009, respectively.
Basis of Presentation
On May 12, 2010, Express Parent LLC (“Express Parent”) converted into a Delaware corporation and changed its
name from Express Parent LLC to Express, Inc. (the “Company” or “Express”). This conversion was effective
May 2, 2010 for tax purposes. In connection with this conversion, all of the equity interests in Express Parent,
which consisted of Class L, Class A, and Class C units, were converted into shares of common stock of the
Company at a ratio of 0.702, 0.649, and 0.442, respectively. The accounting effects of the recapitalization are
reflected retrospectively for all periods presented in the accompanying Consolidated Financial Statements and
Notes hereto. The aforementioned events are referred to collectively as the Reorganization within these
Consolidated Financial Statements.
Express Parent was formed on June 10, 2008 and acquired all of the outstanding equity interest in Express Topco
LLC (“Express Topco”) which owns all of the outstanding equity interest in Express Holding LLC (“Express
Holding”). Express Holding owns all of the outstanding equity interest in Express, LLC, which previously
operated as a division of Limited Brands, Inc. (“Limited Brands”) prior to the acquisition by Golden Gate Private
Equity, Inc. (“Golden Gate”) in 2007 (the “Golden Gate Acquisition”), and Express Finance Corp. (“Express
Finance”). Express Finance was formed on January 28, 2010 for the purpose of serving as co-issuer of the the
$250 million Senior Notes (“Senior Notes”) described in Note 8. Express, LLC is a wholly-owned subsidiary of
Express Holding and conducts the operations of the Company.
On June 26, 2008, the Company entered into an exchange agreement with Express Holding, Express Topco, and
other security holders, whereby the members of Express Holding contributed, transferred, assigned, and delivered
all issued and outstanding equity interests of Express Holding to the Company in exchange for issuance by the
Company to each Express Holding member an equivalent number of identical equity interests of the Company
(the “Recapitalization”). Upon consummation of the exchange agreement, the Company and Express Topco
entered into a contribution agreement, pursuant to which the Company contributed all of its equity interest in
Express Holding to Express Topco as a contribution to Express Topco’s capital. Immediately following the
consummation of these transactions, Express Topco entered into the Second Amended and Restated LLC
Agreement of Express Holding in order to recapitalize the membership interests of Express Holding into a single
class of membership units. Following the Recapitalization, the Company owned 100% of the membership
interests of Express Topco, and Express Topco owned 100% of the membership interests of Express Holding.
Because the Recapitalization represented a transfer of equity interests between entities under common control,
the Company recognized the assets and liabilities transferred at their historical carrying amounts, similar to the
pooling-of-interests method.
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