Express 2013 Annual Report Download - page 4

Table of Contents
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In this section, "Express","we", "us," "the Company", and "our" refer to Express, Inc. together with its predecessors and its consolidated subsidiaries
as a combined entity. Our fiscal year ends on the Saturday closest to January 31. Fiscal years are referred to by the calendar year in which the fiscal
year commences. All references herein to "2013", "2012", and "2011" refer to the 52-week period ended February 1, 2014, the 53-week period ended
February 2, 2013, and the 52-week period ended January 28, 2012, respectively.
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Express is a specialty apparel and accessory retailer offering both women's and men's merchandise. We have over 30 years of experience offering a distinct
combination of style and quality at an attractive value, targeting women and men between 20 and 30 years old. We offer our customers an assortment of
fashionable apparel and accessories to address fashion needs across multiple aspects of their lifestyles, including work, casual, jeanswear, and going-out
occasions.
We opened our first store in Chicago, Illinois in 1980 as a division of L Brands, Inc. (formerly known as Limited Brands, Inc.) ("L Brands"). In 2007,
investment funds managed by Golden Gate Private Equity, Inc. ("Golden Gate") acquired a controlling interest in the Express division from L Brands. In May
2010, Express, Inc., the parent company of subsidiaries that operate our business, was converted into a Delaware corporation and completed an initial public
offering ("IPO"), including listing its common stock on the New York Stock Exchange. In this Annual Report on Form 10-K, we refer to all of the events that
occurred in connection with the IPO as the "Reorganization".
As of February 1, 2014, we operated 632 stores across the United States, in Canada, and in Puerto Rico. Our stores are located primarily in high-traffic
shopping malls, lifestyle centers, and street locations, and average approximately 8,700 gross square feet. We also sell our products through our e-commerce
website, express.com, and have franchise agreements with franchisees who operate Express stores in Latin America and the Middle East. Our 2013 net sales
were comprised of approximately 62% women's merchandise and approximately 38% men's merchandise.
We report one segment, which includes the operation of our brick and mortar retail stores and the express.com e-commerce website. Additional information
about our reportable segment can be found in Note 2 of our Consolidated Financial Statements.
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We believe that our primary competitive strengths are as follows:
Established Lifestyle Brand. With over 30 years of heritage, the Express brand represents a distinctive point of view that is sexy, sophisticated, and social.
We believe that our customers view Express as a fashion authority and look to us to provide them with the latest fashions. The Express brand differentiates
itself by offering (1) a balanced assortment of core styles and the latest fashions; (2) products that address fashion needs across multiple wearing occasions,
including work, casual, jeanswear, and going-out occasions; and (3) quality products at an attractive value.
Attractive Market and Customer Demographic. We are part of the specialty apparel market targeting 20 to 30 year old women and men. We believe the
specialty apparel market is a significant piece of the total apparel market for this demographic and 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.
Go-To-Market Strategy. We design the majority of our product assortment in our New York City design studio based on extensive review and consideration
of fashion trends, styles, fabrics, colors, fits, and prices. 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 believe that we have an efficient, diversified, and
flexible supply chain, including a network of third-party manufacturers located throughout the world, that allows us to quickly identify and respond to trends
and bring a tested assortment of high quality products at competitive prices to our stores.
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 three provinces in Canada. As a
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