Express 2011 Annual Report Download - page 13

Competitive Strengths
We believe that our primary competitive strengths are as follows:
Established Lifestyle Brand. With over 30 years of brand heritage, we have developed a distinct and widely
recognized brand that we believe fosters loyalty and credibility among our customers who look to us to
provide the latest fashions and quality at an attractive value.
Attractive Market and Customer Demographic. We are part of the specialty apparel market for 20 to 30 year
old women and men in North America. We believe the specialty apparel market is a significant piece of the
total apparel market for this demographic. We believe that the Express brand appeals to a particularly
attractive subset of this group who we believe spend a higher percentage of their budget on fashion
compared to the broader population.
Sophisticated Design, Sourcing, and Merchandising Model. We believe that we have an efficient,
diversified, and flexible supply chain that allows us to quickly identify and respond to trends and bring a
tested assortment of products to our stores. We believe our model allows us to better meet customer demand
and enables us to reduce inventory risk and improve product margins from reduced markdowns. We design
our entire product assortment in our New York City design studio based on an extensive review of fashion
trends, styles, fabrics, colors, and fits for the upcoming season. Our product testing processes allow us to
test approximately three-quarters of our merchandise in select stores before placing orders for our broader
store base. In addition, we assess sales data and new product development 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 diversified network of third-party manufacturers located throughout the world that we believe
allows us to source the high quality products that our customers demand at competitive prices.
Optimized Real Estate Portfolio. Our stores are located in high-traffic shopping malls, lifestyle centers, and
street locations in 47 states across the United States, as well as in the District of Columbia, Puerto Rico, and
two provinces in Canada, and are diversified across all regions. In the last 10 years, we have largely
completed the conversion of our store base into dual gender stores from separate men’s and women’s stores,
reducing our square footage by approximately 30%. We have over 30 years of experience identifying and
opening new stores. As a result of our strong brand and established retail presence, we have been able to
acquire high-traffic locations in most retail centers in which we operate. Substantially all of our stores were
profitable in 2011.
Proven and Experienced Team. Michael Weiss, our President and Chief Executive Officer, has more than
40 years of experience in the fashion industry and has served as our President for over 20 years. In addition,
our senior management team has an extensive amount of experience across a broad range of disciplines in
the specialty retail industry, including design, sourcing, merchandising, and real estate. Experience and
tenure with Express extends deep into our organization. For example, our district managers and store
managers have been with Express for an average of 12 years and 7 years, respectively.
Growth Strategy
Key elements of our business and growth strategies include the following:
Improve Productivity of Our Retail Stores. We believe that the efforts we have taken over the last several years to
optimize our store base through conversion to dual-gender stores and to improve our go-to-market strategy have
positioned us well for future growth. We seek to grow our comparable sales and operating margins by executing
the following initiatives:
•Continue to Refine Our Go-to-Market Strategy. As we increase testing and refine our go-to-market
strategy, we believe our in-store product assortment will be more appealing to our customers and will
help us decrease markdowns and increase sales and product margins;
•Recapture Market Share in Our Core Product Categories. Approximately seven years ago, we shifted
our product mix, which included a high percentage of tops, casual bottoms, and denim, to increase our
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