Express 2015 Annual Report Download - page 23

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Table of Contents
Update On Our Key Initiatives
Store Performance
Real Estate Activity
In 2015, comparable sales (excluding e-commerce sales) increased 4% and
net sales per average gross square foot increased 7% to $343. The
improvement was primarily driven by the following:
Strong product assortment, which incorporated more fashion items,
new categories and collections, and offered customers newness more often;
Disciplined inventory management, including new disciplines
around product testing, purchasing, and speed to market, which allowed us
to bring better product to our customers faster, and in more appropriate
quantities; and
Reduced promotions which led to increased sales at full ticket
prices.
As of January 30, 2016, we operated 653 stores, including 81 factory outlet
stores.
2015 Store openings and closures:
Opened 40 new factory outlet stores in the U.S., two of which were
converted from existing retail locations;
Opened one new U.S. retail store; and
Closed 29 U.S. retail stores, two of which were converted to outlet
locations. The remaining 27 stores were permanently closed pursuant to our
previously announced plan to close approximately 50 retail stores over a 36
month time period, primarily at lease expiration.
Expectations for 2016:
Open 21 factory outlet stores, two of which will be converted from
existing retail locations; and
Close 19 U.S. retail stores, two of which will be converted to outlet
locations.
E-commerce
Other Initiatives
In 2015, our e-commerce sales increased 11% compared to 2014. The
increase was primarily driven by:
Improved product assortment, including new product categories;
Improved customer experience, including same day delivery and
featured brands;
Website improvements allowing us to better showcase our full
priced product online; and
Improved mobile web and app capabilities allowing more effective
and personalized engagement with our customers.
E-commerce sales represented 17% of our total net sales in 2015.
2015 Objectives. In 2015, we made significant progress
against each of the objectives we set forth at the beginning of the year,
including increasing profitability, further developing our people,
sharpening our brand positioning, elevating the customer experience, and
continuing to upgrade our systems and processes.
International. At the end of 2015, we made the strategic
decision to shift our international focus to growth within the Americas. As a
result we have terminated our franchise agreements covering the Middle
East and South Africa and all stores in these areas are expected to be closed
in 2016.
Systems and Processes. In 2015, we continued to invest in new
systems that will allow us to enhance our omni-channel capabilities and
enable future growth. In 2016, we expect to launch several of these new
systems, including a new retail management system, a new enterprise
planning system, and a new order management system. Together, we believe
these systems will lead to improved efficiencies in our business once fully
implemented.
Outlook
We are focused on generating long-term growth for our stockholders by increasing profitability through a combination of net sales growth, merchandise
margin expansion, and expense leverage. Specific growth initiatives to accomplish this objective include:
• increasing the productivity of our existing stores;
• opening new outlet stores; and
• growing our e-commerce business.
In addition to increased profitability, we are also focused on other objectives to support long-term growth including:
• supporting and developing our employees (or our "Associates");
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