Express And Sycamore Ended Sale Negotiations And Share Price Plummeted

U.S.A

Retailer Express Inc. (NYSE:EXPR) recently announced negotiations with the US private equity fund Holdings Company Sycamore Partners about the end of the stock buyout, which resulted in the stock price of Express Inc. (NYSE:EXPR) tumbled nearly 13% on the same day, the largest single day decline in more than a year.

Express Inc. (NYSE:EXPR) pointed out that the failure of the negotiations was due to the fact that Sycamore Partners was unable to obtain favorable financing terms when financing the paction, which meant that the banks were dissatisfied with the current financial situation of Express Inc. (NYSE:EXPR).

Rating agency Standard & Poor's Standard & Poor's credit rating for Express Inc. (NYSE:EXPR) is "BB", and last month, its outlook has been reduced from "stable" to "negative", reflecting its expected performance.

Because of the difficult retail environment in the United States, the Express Inc. (NYSE:EXPR), which has been camping in the physical shopping center, shows its declining trend in recent years. Revenue and profits have declined for the four consecutive quarter.

In the three quarter ended November 1st, group sales decreased by 1.2% to $498 million compared to the same period last year, slightly below the market forecast of $500 million and a 5% decline in same store sales.

Net profit decreased by 24.3% to $14 million 585 thousand per annualized year, and the diluted earnings per share decreased from $0.23 to $0.17, exceeding the market forecast of $0.16.

Gross margins shrink by 110 basis points to 31.7%.

However, thanks to lower oil prices and economic recovery, the group's super expected performance in the discounted holiday season raised its four quarter and year-round target last week.

Focus on

The investment Sycamore Partners sees more opportunities from the Express Inc. (NYSE:EXPR) retailers.

Sycamore Partners has previously invested in the difficult young apparel retailer A e ropostale Inc. (NYSE:ARO) and has made a loan of $150 million to negotiate with it.

Australian wave dress retailer Billabong International Ltd. (ASX:BBG).

At the end of 2013, Sycamore Partners bought the parent company of Nine West, and had several brands of The Jones Group Inc. Jones group.

Sycamore Partners disclosed to the US Securities and Exchange Commission SEC in June last year that it has purchased 9.9% stake in Express Inc. (NYSE:EXPR) as the largest shareholder of the latter, and plans to buy Express Inc. (NYSE:EXPR) wholly-owned, and conduct a full investigation and recommendation of Express Inc. (NYSE:EXPR).

Express Inc. (NYSE:EXPR) was the brand of L Brands Inc. (NYSE:LB), the secret parent company of Victoria's Secret Vitoria. In 2007, it was acquired 75% stake in the private equity fund Holdings Company Golden Gate Golden, and went public in 2010.

The two founders of Sycamore Partners came from Golden Gate Capital Corp..

Before Sycamore Partners became a shareholder, Invesco Advisers Inc. holding Express Inc. (NYSE:EXPR) 6% shares was its largest shareholder, followed by The Vanguard Group, Vanguard and NYSE:EXPR.