Express IPO Prices Below Range

| About: Express, Inc. (EXPR)

Express (NYSE:EXPR), a specialty retail apparel brand in the United States, priced its IPO on May 12 at $17 per share, below its expected range of $18-$20 per share.

Business Overview (from prospectus)

Express is the sixth largest specialty retail apparel brand in the United States. With 30 years of experience offering a distinct combination of style and quality at an attractive value, we believe we are a core shopping destination for our customers and that we have developed strong brand awareness and credibility with them. We target an attractive and growing demographic of women and men between 20 and 30 years old. We offer our customers an edited assortment of fashionable apparel and accessories to address fashion needs across multiple aspects of their lifestyles, including work, casual and going-out occasions. Since we became an independent company in 2007, we have made several significant changes to our business model, including completing the conversion of our stores to a dual-gender format, re-designing our go-to-market strategy and launching our e-commerce platform, all of which we believe have improved our operating profits and positioned us well for future growth and profitability.

Offering: 16 million shares at $17 per share. Net proceeds of approximately $165 million will be used for repayment of debt and $13 million for payment to Golden Gate to terminate the Advisory Agreement.

Lead Underwriters: BofA Merrill Lynch, Goldman, Sachs & Co. (NYSE:GS), Morgan Stanley (NYSE:MS)

Financial Highlights:

Net sales were $1,721.1 million in fiscal 2009, compared to $1,737.0 million in fiscal 2008...Gross profit was $546.0 million, or 31.7% of net sales, in fiscal 2009, compared to $457.0 million, or 26.3% of net sales, in fiscal 2008...General, administrative, and store operating expenses were $409.2 million, or 23.8% of net sales, for fiscal 2009, compared to $447.1 million, or 25.7% of net sales, for fiscal 2008...Net income were $75.3 million for fiscal 2009, compared to net loss of $29.1million for fiscal 2008...


The specialty apparel retail market is highly competitive. We compete primarily with other specialty retailers, higher-end department stores and Internet businesses that engage in the retail sale of women’s and men’s apparel, accessories and similar merchandise targeting customers aged 18 to 30. We believe the principal basis upon which we compete are design, quality, price and customer service. We believe that our primary competitive advantages are consumer recognition of the Express brand name, strong real estate locations and a passionate employee sales force that creates a customer focused shopping experience. We believe that we also differentiate ourselves from competitors on the basis of our consistent look by our in-house product design team, our ability to offer a balanced assortment of core styles and the latest fashions, our focus on the quality of our product offerings and the attractive value we offer to our customers.

Our success also depends in substantial part on our ability to originate and define product and fashion trends so that we can anticipate, gauge and react to changing consumer demands on a timely basis. While we do not believe that any retailer directly competes with us on all of these attributes, we believe our competitors include other specialty retailers and department stores, including Aéropostale, American Eagle Outfitters (NYSE:AEO), Banana Republic, Bebe (NASDAQ:BEBE), Forever21, Gap (NYSE:GPS), Guess? (NYSE:GES), J. Crew (JCG), Macy’s (NYSE:M) and Zara. Further, we may face new competitors and increased competition from existing competitors as we expand into new markets and increase our presence in existing markets.

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