Express 2012 Annual Report Download - page 3

DEAR
VALUED
BUSINESS
PARTNER
Dear Valued Business Partner:
It is my pleasure, on behalf of the Board of Directors and the associates of Express, to present
you with our 2012 annual report. We began the year optimistically, faced some challenges in
our second and third quarters and ended the year on a far more positive note. I’m particularly
pleased that we engaged in serious introspection that enabled us to identify opportunities
and tackle issues head-on. I’m also confident that we are on sound footing and our long-term
growth plans remain realistic and quite achievable.
As we held a lens up to our business, certain things became very clear to us. Our customers
love our brand and will turn out to shop as long as we continue to give them what they want
- the right merchandise offered at clear, easy-to-understand prices that reinforce our value
proposition. As we were thinking about driving results and creating additional opportunities
for growth, one idea kept coming to the forefront, namely the importance of concentration
to achieve maximum impact. When our customers shop will shape the way we plan our
promotions throughout 2013 and beyond. Where our customers shop will shape our real
estate strategy, both here and abroad, as well as our e-commerce strategy. In each case, we
will concentrate most heavily on the times and places where we can achieve maximum impact.
I also want to assure you that our objective remains unchanged from what we have discussed
with you previously. We aim to be the leading fashion authority for 20 to 30 year old girls and
guys looking to us for the clothes and accessories meeting their different lifestyle needs,
whether they are heading out in jeans or casual clothes, leaving for work or dressing for a party
or other special occasion.
Our 2012 performance did not deliver the kind of growth we strive for. As most of you already
know, our 2012 net sales rose by 4%, and benefitted from a 53rd week, while our comparable
sales for the year were flat and our net income was $139 million versus $141 million in 2011.
We are committed to doing better and believe that improvements in sales and margins are
achievable and can flow through to deliver a stronger bottom line. We will be working to
advance that objective during 2013.
We also remain committed to advancing our growth pillars and continue to believe that our
Go-to-Market strategy is a key differentiator for us. A data driven process that successfully
takes some of the risk out of the fashion business is something to be respected and followed.
In 2012, we learned that our execution of the Go-to-Market strategy must be consistent
and performed with discipline. We’ve been spending time with our team to ensure that they
understand how tests should be properly constructed, what to test and how to act upon the
test results. We believe this focus will lead to better results in 2013. It has already led to the
development of some of the biggest key items we have seen in quite some time.
In terms of our four growth pillars, one of them is to drive productivity and profitability in our
existing stores. While there are multiple drivers of productivity, better product selection
resulting in fewer markdowns is one clear objective. Driving conversion through an enhanced
customer experience is another and we are working closely with our store associates to