Express 2011 Annual Report Download - page 14

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focus on a more premium wear-to-work assortment. In the last several years we have re-focused on a
broader lifestyle clothing mix consistent with our brand heritage. Based on our historical peak sales
levels across product categories, we believe there is opportunity for us to recapture sales as our
customers re-discover Express in certain product categories, specifically casual and party tops, dresses,
and denim. We believe our efforts to deliver a clear and consistent brand message provides us with
additional opportunities to increase sales in core categories that will allow us to return to historical
sales volumes; and
•Improve Profit Margins. We believe we have the opportunity to continue to improve margins through
further efficiencies in sourcing and continued refinement of our merchandising strategy. We plan to
leverage our infrastructure, corporate overhead, and fixed costs through our converted dual-gender
store format.
Expand Our Store Base. While there has been significant growth in retail shopping centers during the last decade,
we have focused on converting our existing store base to a dual-gender format and have opened few new stores
over this time period. As a result, we believe there are numerous attractive, high-traffic locations that present
opportunities for us to expand our store base. We currently plan to open approximately 30 to 35 stores across the
United States and Canada over each of the next 3 years, which represents annual square footage growth of
approximately 3% to 4%. During 2011, we opened 27 stores in the United States and Canada. We plan to open
approximately 30 additional stores, including 7 to 10 in Canada, in 2012.
Expand Our e-Commerce Platform. In July 2008, we launched our e-commerce platform at express.com,
providing us with a direct-to-consumer sales channel. We believe that our target customer regularly shops online,
and we see continued opportunity to grow our e-commerce business by providing our customers with a seamless
retailing experience. In addition, we believe our multi-channel platform will allow us to continue to improve
overall profit margins as our e-commerce business becomes an increased percentage of our sales. In the third
quarter of 2010, we added a mobile application to allow customers to scan merchandise bar codes from their
mobile devices, to view product reviews and information in store, and to make purchases.
Expand Internationally. We believe Express has the potential to be a successful global brand. We recently began
efforts to bolster our brand image and awareness outside of the United States. As of January 28, 2012, there were
7 Express stores in the Middle East, which were constructed through a development agreement (“Development
Agreement”) with Alshaya Trading Co. (“Alshaya”). Through our Development Agreement, we earn royalties
from the sales in these stores with no capital investment or inventory risk. The agreement allows us to control our
brand image, store design, and product assortment offered in these stores. Over the next 5 years, we believe there
are additional opportunities to expand the Express brand internationally through additional agreements with local
partners across the globe, joint venture relationships, and company-owned stores in targeted countries.
Our Products
As noted previously, we offer our customers an assortment of fashionable merchandise to address multiple
aspects of their lifestyle, including work, casual, jeanswear, and going-out occasions. Our products are created by
our in-house design team and range from core styles to the latest fashions. 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. We believe we have
developed a portfolio of products that have significant brand value, including the Editor pant and 1MX shirt. We
believe our products offer customers 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 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
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