Express 2011 Annual Report Download - page 18

in July 2011. This new store design will be utilized for all new and remodeled stores opening in 2012. To further
enhance our customers’ experience, we seek to attract enthusiastic store associates who are knowledgeable about
our products and able to offer superior customer service and expertise. We believe that our store atmosphere
enhances our brand as a provider of the latest fashions.
North American Store Growth
Now that we have largely completed our transition to a dual-gender store base, we currently plan to open 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%. Our new store strategy is to open stores of the similar size, location type, and
productivity as in our current fleet. Our average net investment to open a new store during the last 3 years was
approximately $0.5 million.
We intend to focus on opening stores in high-traffic malls, lifestyle centers, and street locations. In selecting shopping
centers in which to locate a new store, we target locations with demographics that resemble those of our current
locations, including a large 20 to 30 year old customer base, and favorable lease terms. We generally seek to locate our
stores in malls in which similar fashion retailers have performed well. Within the shopping centers in which we seek to
locate stores, we target locations in high-traffic areas of the shopping center and near other popular retailers that cater
to our customers. We also focus on evaluating the market and mall-specific competitive environment for potential new
store locations. We seek to diversify our store locations regionally and by caliber of mall.
International Stores
In 2009, we entered into the Development Agreement in the Middle East with Alshaya under which Alshaya
constructs and operates Express stores, and we charge a royalty percentage based on monthly sales volume. As of
January 28, 2012, Alshaya operated 7 Express stores located in Saudi Arabia, the United Arab Emirates, and
Kuwait under the Development Agreement. We intend to continue to pursue development agreements to expand
our global presence in the Middle East and other select regions internationally. We believe that partnering with
companies and individuals who have significant experience and proven success in the target country is to our
advantage because it allows us to leverage our partners’ knowledge of local markets to improve our probability
of success and reduce capital investment and risk. In addition, we plan to open Company-operated stores in select
international locales where we feel it would be more beneficial to us.
Internet Website
Since July 2008, customers have been able to purchase our merchandise over the Internet at our website,
express.com. In 2011, our e-commerce sales increased 39% relative to 2010, which represented approximately
10% of our net sales in 2011. In 2010, our e-commerce sales increased 60% relative to 2009, which represented
approximately 8% of our net sales in 2010. Our website emphasizes simplicity and ease of customer use while
integrating the Express brand’s fashion-oriented imagery used in our stores. We update our website periodically
throughout the day to accurately reflect product availability and to determine where on the website a particular
product generates the best sales. In addition to selling regular merchandise on our website, we also use our
website as a means to sell marked-down merchandise as well as offer sizes and categories not available in stores.
It also allows us to test merchandise and get real time feedback on products not currently available in stores.
Store Management and Training
We believe that our store managers and associates are key to our success. Each of our retail stores is led by a
store manager and, depending on the volume of the store, 1 or 2 co-managers, as well as part-time management
associates. We believe that our managers and associates are committed to our customers and are passionate about
our brand. On average, our store managers have been with Express for 7 years. The number of store associates
we employ generally increases during the early Fall and holiday seasons, and will increase to the extent that we
open new stores.
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