Clothing retailer Express said Wednesday that it plans to shutter roughly 100 of its stores by 2022, as part of its strategy to save $80 million in costs annually over the next three years.
Express shares were last up more than 18% on the news. Express has a market value of roughly $313 million. As of Tuesday's market close, it had watched its stock fall roughly 21% over the past 12 months.
The company also announced a restructuring of its workforce, which it says will impact roughly 10% of the jobs at Express' headquarters in Columbus, Ohio, and a design studio in New York. CNBC was not immediately able to determine exactly how many jobs are being cut.
The store closures add to the malaise that U.S. shopping malls have been hit with in recent years. A record of more than 9,000 store closures was announced by retailers — ranging from Gap to Forever 21 to Sears — in 2019. The apparel category within retail has been under pressure especially with more shoppers either pulling back their spending on clothing, or turning to subscription and rental services like Stitch Fix and Rent the Runway.
"When I joined Express, I outlined three priorities: changing the trajectory of the business, developing a corporate strategy, and putting the right team in place," CEO Tim Baxter said in a statement. "We have spent the past six months developing a strategy with the intent to return Express to long-term growth and a mid-single digit operating margin. Today we took the necessary steps to put the right organization in place to support that strategy."
Baxter was appointed CEO in June of last year. Previously, he had spent more than two decades working at Macy's. He succeeded Matthew Moellering, who had served as Express' interim CEO since January 2019.
The company said Wednesday that nine of the roughly 100 stores set for closure are already dark, with another 31 expected to close by the end of this month, and another 35 shuttering by the end of January 2021.
Express currently operates more than 600 stores, including factory outlet locations, in the U.S. and Puerto Rico.
The closures will reduce sales by $90 million by 2022, the company said. But it said the lower costs will help boost its earnings before interest, taxes, depreciation and amortization by $15 million.
Express also has narrowed the range for its fourth-quarter earnings outlook, pegging it toward the lower end.
Adjusted earnings per share are expected to be between 17 cents and 19 cents, with same-store sales expected to drop roughly 3% during the fourth quarter, which includes the latest holiday season. Analysts polled by Refinitiv were calling for earnings of 19 cents a share.