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12/08/2022

Toys R Us Parent Buys $235 Million Stake in Express

WHP Global said it planned to develop a new omnichannel experience and participate in retail industry consolidation.
Image
an express store
  • WHP Global, the parent company of Toys R US, has acquired a stake in Express.
  • The investment company will have a 60% stake in an intellectual property joint venture, while Express will have a 40% stake. 
  • WHP plans to accelerate growth by expanding internationally and licensing in non-core categories.

WHP Global, the parent investment company of Toys R Us, has acquired a 60% stake in Express as part of a $235 million investment in the retailer. 

According to a Dec. 8 release, WHP will acquire 5.4 million newly issued EXPR shares valued at $4.60 per share to take a 7.4% ownership stake in Express. WHP will have a 60% ownership stake in a new intellectual property joint venture, while Express will have 40% ownership. 

WHP said the deal would help advance Express’ growth as an omnichannel retailer. The investment company said it would position the brand to “participate in anticipated retail industry consolidation” by pursuing acquisitions with the support of WHP to grow its brand portfolio and accelerate profitability, according to the release. 

"Our Expressway Forward strategy has reinvigorated our brand and rebuilt the foundation of our company, paving the way for this bold next chapter in our transformation," said Tim Baxter, Express CEO, in the release. "Our partnership with WHP will drive greater scale and profitability of the Express brand through their category licensing and international expertise and strengthen our balance sheet. We expect to accelerate our growth by acquiring multiple brands in partnership with WHP and operating them on our platform. Both of these are expected to drive shareholder value."

As part of the strategy, WHP said Express would accelerate growth by expanding internationally and licensing in non-core categories. The retailer currently operates 550 stores in the U.S., including in Puerto Rico. 

"The global growth potential of the Express brand and the EXPR omnichannel platform will give our company a distinct competitive edge as we look to acquire more consumer brands," said Yehuda Shmidman, WHP global chairman and CEO, in the release. "We are excited to partner with Tim and his management team and view this partnership as a huge win for both of our companies.”

As part of the deal, Shmidman will take a spot on Express’ board of directors. 

In addition to Toys R Us, which WHP purchased a controlling interest in 2021, WHP also owns other retail brands that include Anne Klein, Joseph Abboud, Joe’s Jeans, Lotto, Issac Mizrahi and William Rast. 

The announcement follows a disappointing quarter for Express, which reported a net loss of $34.4 million in the third quarter