Columbus, Ohio — Express Inc. confirmed that it has received a letter from Sycamore Partners, which has a 9.9% stake in the retailer, indicating that the private equity firm is interested in acquiring the company. In response, Express adopted a one-year “poison pill” shareholder rights plan that would double its shares of common stock in the event any stockholder acquires 10% or more of the company.
“Given the strategic and operational challenges faced by specialty retailers generally and the company in particular, a fully financed, binding, all-cash offer to acquire the company would be a valuable alternative for the company’s board of directors and stockholders to consider,” Stefan Kaluzny, Sycamore’s managing director, said in the letter.
Express said the shareholder rights plan exists to protect the interests of stockholders and give the board the chance to react to takeover attempts, rather than prevent a sale. The chain has established special committee of the board to determine a course of action it believes is in the "best interest" of all stockholders.
Express is coming off a rough first quarter during which its sales dropped to nearly $461 million from roughly $509 million in the same period a year prior. Same-store sales plunged 11%. Operating income was almost $15 million, a steep drop from nearly $59 million for the same period a year prior.
Sycamore, founded in 2011 by two executives from venture capital firm Golden Gate Capital, owns Hot Topic and Talbots and also owns a stake and credit in Aeropostale.