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Express CEO Tim Baxter talks with Yahoo Finance's Brian Sozzi about the direction of the company post-pandemic as well as shifting consumer behavior.
BRIAN SOZZI: Many businesses, of course, have had a tough year and a half due to COVID-19 lockdowns. But retailers have been especially hard hit. Apparel retailer Express is now looking to capitalize on the return to work as well as drive a lasting turnaround under new management. Express shares have surged nearly 450% this year as retail investors bank on a turnaround for a company they have probably shopped at for the past decade. The CEO of Express is Tim Baxter. And he joins us now.
Tim, good to finally speak with you here. So you just passed your two year mark as CEO of Express. How is the company different today compared to when you took over?
TIM BAXTER: Well, that's a great question. It's completely different. I took over in June of 2019 and I had three major objectives when I first joined. One was to establish a corporate strategy. The second was to assemble a great leadership team to both inform the strategy and then execute against the strategy. And then finally to change the momentum of the business, which had been challenging for several years prior to me joining the company. And in January of 2020, about six months after I joined, we launched the Expressway Forward strategy, which was our strategy to completely transform the company.
And it was based on four foundational pillars. I talk a lot about them, putting product first, engaging our existing customers, and acquiring new customers, brand, reinvigorating the brand, and finally execution. And we've made incredible progress against each one of those four pillars in spite of the fact that we closed every one of our stores and sent all of our folks to work from home about six weeks after launching the strategy.
BRIAN SOZZI: Who is the Express of today?
TIM BAXTER: The Express of today, we are regaining our relevance. I talked about reinvigorating our brand. And Express is a 40-year-old brand. And when I started a couple of years ago, I would say that most people would describe Express as a store at the mall. Or they thought of us as a store at the mall. And today, we're moving forward on re-energizing our brand. And we want people to think of us, and people have begun to think of us, as a brand with purpose.
Our purpose is to create confidence and inspire self-expression. It's a purpose that resonates incredibly well with our consumers. They want help getting dressed every day. They want help knowing what to wear for certain occasions. And they look to us for that guidance. And that's been an incredibly important part of reinvigorating the brand. And we're seeing incredible metrics on engagement from our consumers as we have shifted all of our marketing toward supporting that brand purpose, and completely changed our assortments.
Express in the past, we have been well known and very dominant in categories that many people would have considered wear to work categories historically or occasion based categories. And the reality is the American consumer has changed dramatically and no longer really thinks about their wardrobe in that way. So we're also a brand that has an incredibly versatile assortment that can dress our customers, both male and female, for virtually any occasion, whether that's shorts and a t-shirt, or a black tie event.
BRIAN SOZZI: Just given that return to work focus for Express, it's always been a hallmark of your brand. What have you seen more recently? We seem to be caught in this gray zone here, a lot of folks going back to work. But now a lot of concern on the COVID-19 Delta variants spreading. What have you seen in your business so far?
TIM BAXTER: It's interesting. We have definitely seen a resurgence in what you would call historically wear to work categories. We saw an inflection point in our business at Easter when vaccinations were continuing to roll out pretty aggressively throughout the country and restrictions were beginning to lift. And the wear to work and occasion based businesses certainly have had a steady resurgence after that inflection point. I would say we've seen stronger adoption to occasion based categories as people have resumed attending weddings.
I mean, I think everybody at this point thinks just about everything is an occasion. And they want to get dressed up for that occasion. The wear to work categories have had that resurgence. And we continue to see that in spite of what's been happening with the COVID variants and some states going back to certain restrictions. And I expect that that will continue based on the data we have as we move into the fall season, particularly post Labor Day when we anticipate a very large percentage of the American workforce is going to return to the typical work environment.
But I don't think that they're going to return in necessarily the same way that they have. Comfort is going to continue to be incredibly important, even as people return to an office environment.
BRIAN SOZZI: Tim, it has been a stunning year for your stock. On January 21, I went back and mined some data off of Yahoo Finance Plus. It opened at $1.16. On January 27, your stock hit a high of $13.97. What were you thinking while all that was playing out?
TIM BAXTER: Well I've certainly learned a lot since January. And obviously, there's been tremendous volatility in the stock. Our stock had been obviously very negatively impacted by the effects of COVID and having to close all of our stores, and obviously the profitability of our company in 2020 was very negatively impacted by that. So we have stayed incredibly focused on our long term goal.
When I launched the Expressway Forward strategy with our new leadership team, we committed to delivering a mid single digit operating margin. And we have stayed focused on that goal. And it is our intent to deliver that to our shareholders, both new shareholders who have joined us this year that we've had a tremendous number obviously of new shareholders who have joined us this year, and to our shareholders who have been with us for quite some time.
And we're on track to achieve that goal. I call 2020 a detour on the Expressway Forward. But we are on track to achieve that goal. And we stay focused on driving shareholder value. And to me, that is returning this company to a mid single digit operating margin.
BRIAN SOZZI: Tim, is it also your intent-- are you looking to raise capital just based on where the stock price is today? I mean, there's been a big focus by Express on improving its balance sheet. From the outside looking in, this would seem like a logical move.
TIM BAXTER: We have, as you probably know, we have an ATM on the shelf. And we have not stated publicly any plan to sell shares. But we do have it from a governance perspective. As we were looking back in late 2020 at different options to raise capital, because at that time we didn't know how long we would be dealing with the effects of COVID-19 and whether or not we would need additional capital, we looked at that as an option, and as a board decided that we should have that at our disposal should we choose to use it or need to use it.
But we announced back in January, actually right before our stock spike, we announced about $140 million in additional financing. And I said at the time that I was confident that that gave us the capital and liquidity that we needed to weather the storm. And obviously, our performance has improved very significantly since then. So I'm more confident than ever that we're on track to achieve our long term stated goal of that mid single digit operating margin. And we have that available to us if it makes sense.
BRIAN SOZZI: And Tim, before I let you go, today you are announcing a new social customer program. What is that exactly? And how will that impact the business?
TIM BAXTER: We're really excited today. We're announcing a new community commerce program. And we have a stated goal also of driving a billion in e-commerce demand by 2024. And this is an important next step in the evolution of our digital business. So essentially, it brings together a group of like-minded entrepreneurs that will be called Express style editors. And it gives these folks the opportunity to build their own storefronts that they can link through all of their social media and engage with their own followers and earn commission on everything that they sell.
And we'll be producing exclusive product for these style editors. And they'll also be able to tap into the entire Express assortment. And honestly, you guys were talking earlier about how many people are looking for flexible opportunities to earn money at home and build their own businesses. And we think this is going to be an extraordinary opportunity for individuals who share our passion for creating confidence and inspiring self-expression, to create their own storefronts and drive revenue through their communities.
So very excited about that and what it's going to mean for us in the future and how we engage with our customers in a very different new and innovative way.
BRIAN SOZZI: We'll know quickly. Tim, your shares are up 12% as you're speaking about all this. So clearly the retail investors, they're rooting for your turnaround. Tim Baxter, CEO of Express. Good to see you today.
TIM BAXTER: Great. Thank you very much.