Express 2013 Annual Report Download - page 9

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Table of Contents

We actively look for ways to use technology to improve the customer experience, both in-store and on-line, and differentiate ourselves from competitors. After
the 2012 Christmas holiday, we transitioned our website hosting from a third party to an internal team that utilizes a platform customized to our specific
needs. This enhances overall system performance, provides improved analytics and more creative control, and enables delivery of a more seamless experience
between our stores and website. In-store online sales are currently supported from the store point-of-sale system. Over time, this enhanced platform will enable
us to offer additional features, such as placing orders online and picking up selections at a designated store.
Our digital marketing efforts include the use of social media and mobile applications. They are designed to reach our customers using the communication and
shopping channels most widely utilized by them so that we can more successfully keep our brand front of mind and also make it easier for customers to
purchase from us.
Our information technology systems provide a full range of business process support and information to our store, merchandising, financial, and real estate
business teams. We utilize a combination of customized and industry standard software systems to provide various functions related to point-of-sale,
inventory management, design, planning and allocation, and financial reporting. During 2013, we made additional investments to begin upgrading our human
resources information system and merchandise management system to provide additional capabilities to support our four growth pillars, particularly
international expansion. Looking ahead, we anticipate continued capital expenditures for upgrades to our human resources information, retail management,
and enterprise planning systems to further support our four growth pillars.

The Express trademark and certain variations thereon, such as Express World Brand, are registered or are subject to pending trademark applications with the
United States Patent and Trademark Office and/or with the registries of many foreign countries. In addition, we own domain names for many of our
trademarks, including express.com. We believe our material trademarks have significant value, and we vigorously protect them against infringement.

We are subject to labor and employment laws, including minimum wage requirements, laws governing advertising and promotions, privacy laws, safety
regulations, and other laws, such as consumer protection regulations that govern product standards and regulations with respect to the operation of our stores.
We monitor changes in these laws and believe that we are in material compliance with applicable laws.
Substantially all of our products are manufactured outside the United States. These products are subject to United States customs laws and similar laws of
other countries that impose tariffs, among other obligations.

We currently employ approximately 19,000 employees. Approximately 800 employees are based at our home office locations in either Columbus or New York
City, approximately 70 are field-based regional or district managers, approximately 1,700 are in-store managers or co-managers, and approximately 16,800 are
in-store sales associates. None of our employees are represented by a union, and we have had no labor-related work stoppages. We believe our relations with
our employees are good.

Our business is seasonal. We define our seasons as Spring (first and second quarters) and Fall (third and fourth quarters). Historically, we have realized a
higher portion of our net sales and net income in the Fall season due primarily to early Fall selling patterns as well as the impact of the holiday season. In 2013,
approximately 55% of our net sales were generated in the Fall season, while approximately 45% were generated in the Spring season. Cash needs are typically
higher in the third quarter due to inventory-related working capital requirements for early Fall and holiday selling periods. Our business is also subject, at
certain times, to calendar shifts, which may occur during key selling periods close to holidays such as Easter, Thanksgiving, and Christmas, and regional
fluctuations for events such as sales tax holidays.
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