Express 2011 Annual Report Download - page 15

customers’ shopping objectives while differentiating our product line from competitors. On average, our
customers purchase 2 to 3 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 quality products consistent with 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.
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 8 to 12 weeks. Additionally, we have the ability to track popular items, place refill orders,
and re-stock merchandise at our distribution center within 5 to 8 weeks.
Our Sourcing Methods
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.
We do not own or operate any manufacturing facilities and, as a result, contract with third-party vendors for
production of all of our merchandise. We purchase both apparel and accessories from importers, including
through intermediaries and directly from manufacturers. Our relationships with our direct manufacturers are
sometimes supported by intermediaries, who help coordinate our purchasing requirements with the factories. In
exchange for a commission, these 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 administrative communications on our behalf. One of the buying agents we work with is Mast
Global Fashions (“Mast”), an affiliate of Limited Brands. Our relationship with Mast is discussed in Note 7 to
our Consolidated Financial Statements.
We purchase the majority of our merchandise outside of the United States through arrangements with
approximately 80 vendors utilizing approximately 355 foreign manufacturing facilities located throughout the
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