In the wake of the pandemic and the damage it did to retailers, many retail chains are desperately trying to map out their next move. Given the massive shift to online shopping, it's become less cost-effective to operate large stores across malls and shopping centers. And so retailers have increasingly been scaling back on square footage in an effort to maintain a physical presence while limiting the amount they're forced to spend on rent.
Earlier this year, Bloomingdale's announced the launch of a small-store model known as Bloomie's -- a scaled-down version of the department store shoppers know and love. And now, another retailer is experimenting with smaller stores in the hopes of luring in customers while also keeping its rent costs manageable.
Express is shrinking -- and that may not be a bad thing
Express has long been a go-to for professional women in need of work-appropriate and casual attire. And now, the mall mainstay is looking to change things up a bit with its smaller-store concept, known as Express Edit.
Express Edit will feature less space and less merchandise. But its floor plan will also feature outfits that are put together, complete with accessories, so consumers have an easier time assembling a complete wardrobe.
Express is hoping to keep its new store model as flexible as possible as it tests out the concept. Its Edit stores will be between 1,400 and 4,500 square feet, and the retailer hopes to stick to shorter-term leases at off-mall locations.
The latter point may be a mixed bag for real estate investors. On the one hand, going off-mall means shopping centers can fill in vacancies left over from the pandemic. On the other hand, Express has traditionally been a mall-based store, and right now, malls are extremely desperate for tenants. And so the fact that Express Edit won't be filling those gaps may come as a bit of a blow.
A growing trend
The pandemic has helped retailers recognize the importance of adapting at a time when so many consumers are veering away from in-store shopping -- a trend that had begun to emerge before the crisis but was no doubt exacerbated by the events of the past 18 months. Express hopes that by testing small-store formats, it can gain insight into consumers' needs and use that data to help establish a longer-term strategy.
Express intends to launch 10 of its Edit locations by the end of 2021. Two such stores are already open in Washington, D.C. And that ties into another important point: By opening smaller stores, retailers can establish a physical footprint in cities where real estate tends to come at a premium.
Of course, Express is no doubt hoping that its new line of stores will help it emerge from its recent slump. Even before the pandemic hit home, the retailer had announced plans to shutter around 100 stores. And recently, it was flagged as one of the most vulnerable U.S. retailers by S&P Global Market Intelligence.
By opening smaller stores in convenient locations, the brand can cater to the busy consumer who wants to get in and get out with complete outfits in hand. And that alone could easily give Express long-term staying power at a time when so many retailers are treading on thin ice.