Express is the latest domino to fall in the world of fashion retail.
Shoppers rejected the clothes on display at Express stores, sending its sales spiraling lower.
“Challenging foot traffic” is how Express phrased the lack of excitement among its shoppers. Sales at the store declined 6% to $504 million in its second quarter compared to a year ago, and its profits fell by more than half to a mere $10 million.
Express’ stock crashed over 25% Wednesday morning, its worst one-day drop since 2012 and second worst day in the company’s brief, six-year history as a public company.
“I am disappointed with our second quarter performance as sales and earnings were below our guidance,” Express CEO David Kornberg said in a statement.
Online sales also dropped 7% and sales at stores open a year or longer — a key industry metric — were down by about the same.
Express is losing ground against other low-cost fashion brands like H&M, Uniqlo and Zara. It’s forcing many of these retailers to shutter stores. Gap, American Apparel, Macy’s and Jos. A. Bank have all seen sales drop, forcing them to close stores.
Overall, Express is still opening stores but at a much slower pace. In the second quarter of 2015, it opened 12 new stores. But this quarter it only opened six.
Kornberg, the CEO, said he’s hopeful about its clothing line for the critical fall fashion season and is “aggressively pursuing several marketing initiatives.”