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More than 3 million people with Medicare could be eligible for coverage of Wegovy now that the popular weight loss drug is also approved in the U.S. for heart health, according to an analysis by health policy research organization KFF. 
But some beneficiaries could still face out-of-pocket costs for the highly popular and expensive drug, and certain Medicare prescription drug plans may also wait until 2025 to cover Wegovy.
Medicare’s budget could also be strained as more Part D plans cover the costs of Wegovy.

Boxes of Wegovy made by Novo Nordisk are seen at a pharmacy in London, Britain March 8, 2024. 
Hollie Adams | Reuters

More than 3 million people with Medicare could be eligible for coverage of Wegovy now that the blockbuster weight loss drug is also approved in the U.S. for heart health, according to an analysis released Wednesday by health policy research organization KFF.
But some eligible beneficiaries could still face out-of-pocket costs for the highly popular and expensive drug, KFF said. Certain Medicare prescription drug plans may also wait until 2025 to cover Wegovy.

Medicare’s budget could be strained as more plans cover the costs of Wegovy. The program’s prescription drug plans could spend an additional net $2.8 billion if just 10% of the eligible population, an estimated 360,000 people, use the drug for a full year, according to KFF.
Under new guidance issued in March, Medicare Part D plans can cover Wegovy for patients as long as they are obese or overweight, have a history of heart disease and are specifically prescribed the weekly injection to reduce their risk of heart attacks and strokes. The Food and Drug Administration approved Wegovy for that purpose in March.
KFF said that applies to 3.6 million, or 7%, of total beneficiaries, based on 2020 data. That group also makes up 1 in 4 of the 13.7 million Medicare patients who are obese or overweight. Those numbers may be higher based on more recent data, the nonprofit group said.
The analysis suggests that, for the first time, certain Medicare beneficiaries will be able to access Novo Nordisk’s Wegovy without having to shoulder the total $1,300 monthly price tag alone.
Notably, Medicare prescription drug plans administered by private insurers, known as Part D, currently cannot cover Wegovy and other GLP-1 drugs for weight loss alone. GLP-1s are a buzzy class of obesity and diabetes treatments that work by mimicking a hormone produced in the gut to suppress a person’s appetite and regulate their blood sugar. 

But KFF’s analysis found that Medicare beneficiaries who take Wegovy could still face monthly out-of-pocket costs of $325 to $430 if they have to pay a percentage of the drug’s list price for a month’s supply.
A new Part D cap on out-of-pocket spending would limit beneficiaries’ out-of-pocket costs to around $3,300 in 2024 and $2,000 in 2025. Still, those sums are a significant burden for those who live on modest incomes.
Some patients also may struggle to access Wegovy if Part D plans that decide to cover it implement certain requirements to control costs and ensure the drug is being used appropriately. That could include “step therapy,” which requires plan members to try other lower-cost medications or means of losing weight before using a GLP-1 such as Wegovy.
“These factors could have a dampening effect on use by Medicare beneficiaries, even among the target population,” KFF wrote in its analysis.
Some Part D plans have already announced that they will begin covering Wegovy this year, but it’s unclear how widespread coverage will be. KFF said many plans may be reluctant to expand coverage now since they can’t adjust their premiums mid-year to account for higher costs associated with use of the drug.
That means broader coverage in 2025 could be more likely, KFF added.
Medicare already covers GLP-1s and other treatments for diabetes, such as Novo Nordisk’s blockbuster Ozempic. 
Among the Medicare beneficiaries who are obese or overweight and have a history of heart disease, 1.9 million also have diabetes, according to KFF. That makes them already eligible for Medicare coverage of other GLP-1 drugs approved for that condition.

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Joe Biden joined TikTok only two months ago, with a video entitled “lol hey guys”. Now America’s president is poised to sign a bill that could ban the popular app. On April 23rd the Senate approved a measure to crack down on “foreign adversary controlled applications”, including TikTok, as part of a bill approving military aid to Ukraine, Israel and Taiwan. Mr Biden has already said he will sign the bill into law, whatever the feelings of his 300,000 followers, or TikTok’s 170m American users.The law will give ByteDance, TikTok’s Chinese owner, up to nine months to sell to a non-Chinese owner. (A previous version of the bill allowed six months; the new deadline pushes the matter conveniently beyond November’s elections.) A wild selection of possible buyers is touted. Microsoft, Oracle and Walmart have all shown an interest in TikTok in the past. Steven Mnuchin, a former Treasury secretary, says he is putting together a group of investors.They may not get the chance to bid. China’s government, which owns a stake in ByteDance, has indicated that it does not want to part with TikTok. It has classified the app’s recommendation algorithm as a sensitive technology, whose export would need official approval. In March a Chinese government spokesman warned that, in the case of TikTok, “the relevant party should strictly abide by Chinese laws and regulations,” a comment which some read as a warning to ByteDance.That would leave TikTok no choice but to shut down in America, where last year it had revenue of $16bn, according to the Financial Times. So the company is pinning its hopes on an appeal to America’s courts. A memo sent to staff on April 21st described the new bill, then recently passed by the House of Representatives, as a “clear violation of [users’] First Amendment rights”, which enshrine freedom of speech.TikTok has a strong case, believes Evelyn Douek of Stanford Law School. “Decades of precedent hold that the government can’t ban a form of communication because they don’t like the content on it, even when it involves foreign adversaries,” she says. TikTok has won in court before. Last year a judge overturned a ban imposed by the state of Montana, partly on free-speech grounds. An executive order to ban the app by then-president Donald Trump was blocked by judges in 2020.Those in favour of a ban say the problem is not the content on TikTok, but the company’s conduct. It is accused of harvesting users’ data and manipulating what they see, both of which it denies. If courts can be persuaded that TikTok is up to no good, a free-speech defence will not necessarily save it. In 1986 an adult-book shop in New York lost a Supreme Court appeal against its closure, when judges argued that the reason for its shutdown was not the content of its books, but other, illegal activity taking place on the premises.If TikTok wins, it could become an even stronger force in social media. “TikTok has been fighting with one hand tied behind its back against domestic competition,” argues Mark Shmulik of Bernstein, a broker. While Meta, its arch rival, has come up with technical fixes to help its advertisers get around privacy changes Apple introduced for iPhones, TikTok has played it safe. If courts remove the threat of a ban, the company “could feel empowered to step on the gas”, Mr Shmulik notes. It might also stem the exodus of senior staff. Kevin Mayer, a former chief executive hired from Disney, left amid Mr Trump’s efforts to ban the app. Vanessa Pappas, its chief operating officer, departed last year. Now Erich Andersen, the chief counsel, is reportedly preparing to move on.Whatever happens in court, TikTok is already wondering which countries might follow America’s hawkish lead. India, where TikTok had 200m users, banned the app in 2020 (along with several other Chinese apps) following a skirmish at the border with China. Countries including Indonesia and Pakistan have imposed and then lifted short-term bans. The Taliban naturally outlawed TikTok on returning to power in Afghanistan.Juicier markets look safe for now. No big European country is demanding TikTok be sold. But Europe has a record of eventually following America in its approach to China-related security matters, as in the case of its belated clampdown on Huawei, a Chinese maker of telecoms gear. Countries’ willingness to act will depend partly on the closeness of their security relationship with America. America’s fellow members of the Five Eyes intelligence alliance—Australia, Britain, Canada and New Zealand—have already banned TikTok on government devices.Further restrictions on TikTok could disrupt more than the market for social media—if China chooses to retaliate. It fired a warning shot earlier this month, banning app stores from offering apps including WhatsApp and Threads, a pair of Meta products, on national-security grounds. China could make life difficult for plenty of other big American companies. Tesla is suffering because of falling car sales in China. Apple’s iPhone sales in China are ebbing. American chipmakers like AMD are being hurt, too, as China encourages its smartphone-makers to use domestic chips. America may find that banning a short-video app has long-term consequences. ■To stay on top of the biggest stories in business and technology, sign up to the Bottom Line, our weekly subscriber-only newsletter. More

E.W. Scripps has hired a bank to evaluate a potential sale of Bounce TV.
If a deal happens, Scripps could sell the network for hundreds of millions later this year, sources said.
Potential buyers include Black-owned production studios and media companies that also looked at buying BET when Paramount Global considered a sale last year.

Tanika Ray, Alyson Fouse, Kym Whitley, Yvette Nicole Brown and Tisha Campbell attend Bounce TV’s “Act Your Age” Los Angeles Series Premiere at The London West Hollywood at Beverly Hills on February 27, 2023 in West Hollywood, California. 
Charley Gallay | Getty Images

E.W. Scripps, one of the largest local TV broadcasters in the U.S., has hired a financial advisor to evaluate inbound interest in acquiring Bounce TV, its over-the-air network geared toward African Americans, according to Scripps CEO Adam Symson.
The sale process comes after Paramount Global shopped around Black entertainment company BET Media Group last year, but ultimately decided not to sell. Interested parties from that potential deal, many of them with Black leadership, have since approached Scripps with interest in owning Bounce TV, Symson said in an exclusive CNBC interview. If Scripps pursues a deal, it hopes to attract a price tag in the hundreds of millions, according to people familiar with the matter.

E.W. Scripps trades for about $3.70 per share at a market valuation of roughly $315 million. The stock is down more than 50% this year amid concerns over pay-TV cancellations that diminish the audience for broadcast networks.
Symson declined to comment on the names of the bidders or the potential price for Bounce TV. People familiar with the process said a deal could happen around mid-year or the third quarter.
“The number of inbounds and conversations that we have had with interested and qualified potential suitors has picked up significantly over the last year,” Symson said. “The earlier BET process, which was never consummated, may have opened up people’s eyes to the power of Bounce.”
Some advertising agencies and big brands earmark some spending specifically for minority-controlled businesses, Symson said, which can increase the value of media assets if they’re sold from conglomerates to Black owners. He added a platform such as Bounce TV could also serve as a landing spot for a catalog of Black creators.
Scripps officials began telling Bounce TV employees about the inbound interest on Tuesday, according to a person familiar with the communications.

Bounce TV, which debuted in 2011, is a free over-the-air network that broadcasts a combination of syndicated shows, movies and original content. All content is geared to African American audiences. Bounce TV’s “Johnson,” a dramedy created by Deji LaRay, is entering its fourth season. The network is also launching a new comedy series, “Mind Your Business,” that premieres June 1.

EW Scripps CEO Adam Symson
Source: EW Scripps

Ratings for Bounce TV have improved in recent years, even as legacy media has struggled. In the first quarter, Bounce TV viewership was up 14% on linear and 9% on connected TVs, Symson said. About 70% of Bounce TV’s audience is over the air. The other 30% is derived through pay TV and streaming, he said.
While Symson declined to give specifics about Bounce TV’s finances, he said the company has doubled the network’s revenue since acquiring it as part of the takeover of Katz Networks for $302 million in 2017.  
Scripps operates a portfolio of more than 60 stations in more than 40 U.S. markets.

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PepsiCo beat quarterly earnings and revenue estimates.
Volume and sales growth were better in most international markets than in its North America segments.
In its home market, product recalls and weaker demand from lower-income consumers hurt sales.

Bottles of Pepsi soda are seen on display at a Target store on February 09, 2024 in the Flatbush neighborhood of Brooklyn borough New York City.
Michael M. Santiago | Getty Images

PepsiCo on Tuesday reported quarterly earnings and revenue that beat analysts’ expectations, despite weaker U.S. demand caused by Quaker Oats recalls and backlash to higher prices for its drinks and snacks.
Shares of the company were down less than 1% in premarket trading.

Here’s what the company reported compared with what Wall Street was expecting, based on a survey of analysts by LSEG:

Earnings per share: $1.61 adjusted vs. $1.52 expected
Revenue: $18.25 billion vs. $18.07 billion expected

Pepsi reported first-quarter net income attributable to the company of $2.04 billion, or $1.48 per share, up from $1.93 billion, or $1.40 per share, a year earlier.
Excluding items, Pepsi earned $1.61 per share.
Net sales rose 2.3% to $18.25 billion. The company’s organic revenue, which excludes acquisitions, divestitures and foreign exchange, increased 2.7% in the quarter.
But the company’s volume is still under pressure. Pepsi, along with many of its rivals, has seen its volume fall in response to higher prices for its Gatorade, Fritos and other products in its portfolio.

The company’s food division saw its volume decrease 0.5%, while its beverage segment reported flat volume. The metric strips out pricing and currency changes to reflect demand.
A recall of many Quaker Foods cereals and bars only worsened Pepsi’s volume problem. The company issued the first recall for potential salmonella contamination in December, then widened it in January. The North American Quaker Food division reported that its volume cratered 22% in the quarter. The Quaker Foods recall dented Pepsi’s organic volume by roughly 1%.
Pepsi will officially close a Quaker Oats plant tied to the recalls in June, although production there has already ceased. Pepsi said the company has resumed limited production of certain products affected by the recalls.
Pepsi’s other North American divisions also reported weaker volume. Volume in its beverage unit fell 5% in the quarter, while Frito-Lay North America reported a 2% decline in its volume.
Frito-Lay North America’s effective net pricing was up 3% in the quarter, while Pepsi’s domestic beverages unit’s prices rose 6%.
In the U.S., lower-income consumers are still trying to stretch their paychecks, Pepsi CEO Ramon Laguarta told analysts on the company’s conference call. Pepsi is trying to target the demographic and keep them as customers, particularly for its snacks like Cheetos.
Outside of the U.S., demand was stronger. Its Asia-Pacific, Australia, New Zealand and China region reported 12% volume growth for snacks. Chinese consumers are cautious and saving more money, but they’re still buying more Pepsi products, according to Laguarta. Even in Europe, which has also struggled with higher grocery prices, beverage volume increased 7% and snack volume rose 2%.
Pepsi also reiterated its 2024 outlook. For the full year, the company is expecting organic revenue will rise at least 4% and core constant currency earnings per share will climb at least 8%.
“As we look ahead, we continue to expect a normalization and moderation in category growth rates versus the last few years,” Pepsi executives said in prepared remarks. “We also continue to expect that consumers will remain watchful with their budgets and choiceful with their purchases.”

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JetBlue’s forecasts for second-quarter and full-year revenue fell below analysts’ estimates.
The carrier has been on a cost-cutting spree and is cutting unprofitable routes and focusing on those with steady and premium demand.
JetBlue called off its merger agreement of Spirit Airlines last month after a judge blocked the deal earlier this year.

Silhouette of passenger in front of the JetBlue Airbus A321neo aircraft spotted on the apron tarmac docked at the passenger jet bridge from the terminal of Amsterdam Schiphol International Airport AMS EHAM in the Netherlands. 
Nicholas Economou | Nurphoto | Getty Images

JetBlue Airways shares tumbled more than 13% in premarket trading Tuesday after the airline lowered its 2024 revenue forecast, a setback as it tries to return to profitability.
The carrier said second-quarter revenue would likely drop as much as 10.5% on the year, more than double the decline analysts polled by LSEG expected. New York-JetBlue forecast full-year sales would drop in the low single digits, also below Wall Street expectations, after estimating flat sales for the year in its January report.

JetBlue has been on a cost-cutting spree, culling unprofitable routes, and focusing on those with steady demand and high sales for premium seats. The carrier last month called off its merger agreement with budget carrier Spirit Airlines after a judge blocked that $3.8 billion deal on antitrust grounds.
The outlook update Tuesday shows a growing divide between JetBlue and its larger rivals that have big international networks like Delta and United, which have forecast profits, strong revenue and record demand this summer.
“As we look to the full year, significant elevated capacity in our Latin [America] region, which represents a large portion of JetBlue’s network, will likely continue to pressure revenue and we expect a setback in our expectations for the full year,” Joanna Geraghty, who became CEO in February, said in an earnings release. “We have full confidence that continuing to take action on our refocused standalone strategy is the right path forward to ultimately return to profitability again.”

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JetBlue stock falls Tuesday.

JetBlue is affected by a Pratt & Whitney engine recall that has grounded some of its planes. In an investor presentation Tuesday, the airline said it was “actively exploring” more cost cuts.
JetBlue earlier this year said it would defer $2.5 billion in aircraft spending until the end of the year.

In the first three months of the year, JetBlue lost $716 million, or $2.11 per share, compared with a loss of $192 million, or 58 cents a share, in the same period of 2023.
Adjusting for one-time items, including break-up charges related to the failed Spirit merger, JetBlue lost $145 million, or 43 cents per share, narrower than the 52-cent adjusted loss analysts polled by LSEG expected.
Revenue dropped 5.1% from last year to $2.21 billion, matching LSEG revenue expectations.
Bright spots included strong demand in the peak travel period, domestic and Europe flights “as well as continued outsized demand for our premium seating options,” said JetBlue’s President, Marty St. George, who returned to the airline earlier this year.

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General Motors on Tuesday raised its 2024 guidance after beating Wall Street’s top- and bottom-line expectations for the first quarter.
GM’s North American operations, driven by truck sales, were largely responsible for the company’s first-quarter beat and guidance raise, the automaker said. 
GM said revenue during the first three months of this year was up 7.6% from roughly $40 billion a year earlier.

DETROIT — General Motors on Tuesday raised its 2024 guidance after beating Wall Street’s top- and bottom-line expectations for the first quarter.
The automaker said it was boosting its forecast after strong North American operations offset losses elsewhere during the first quarter. The company now expects adjusted earnings of $12.5 billion to $14.5 billion, or $9 to $10 a share, up from a previous range of $12 billion to $14 billion, or $8.50 to $9.50 a share.

GM also raised expectations for adjusted automotive free cash flow to a range of $8.5 billion to $10.5 billion, up from an earlier forecast of $8 billion to $10 billion.
GM shares jumped more than 4% immediately following the report.
Here’s how the company performed in the first quarter, compared with average estimates compiled by LSEG:

Earnings per share: $2.62 adjusted vs. $2.15 expected
Revenue: $43.01 billion vs. $41.92 billion expected

GM said revenue during the first three months of this year was up 7.6% from roughly $40 billion a year earlier. Its net income during the first quarter rose about 26% to $2.95 billion.
The automaker’s net income attributable to stockholders, which excludes some dividend payouts, was up 24.4% to $2.98 billion, or $2.56 per share, from the first quarter of 2023 when the company reported net income attributable to stockholders of about $2.4 billion, or $1.69 a share. 

The automaker’s adjusted earnings before interest and taxes were $3.87 billion, or $2.62 per share, during the first quarter. 

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GM’s stock price

GM’s North American operations, driven by truck sales, were largely responsible for the company’s first-quarter beat and guidance raise, the automaker said.  
The division increased adjusted earnings during the quarter to $3.84 billion, up 7.4% from a year earlier, and helped to offset losses of $106 million in China and $10 million in other international markets during the first three months of the year.
Steady vehicle pricing and increased retail sales in North America also helped GM achieve a 10.6% adjusted profit margin in the region for the period – above its previously announced 8% to 10% range for the year.
GM CFO Paul Jacobson said prices for the automaker’s vehicles were roughly flat to slightly lower due to vehicle mix during the quarter, but not down as much as the 2% to 2.5% decline the company anticipated for the year.
“Our consumer has been remarkably resilient in this period of higher interest rates,” Jacobson told reporters during a briefing. “We think in this environment that we can continue to perform.”
He also noted GM’s loss in China was “slightly better” than the company had previously forecast.

2024 Chevrolet Silverado HD ZR2

GM specifically noted that sales of its highly profitable pickups remain strong, while production of its all-electric vehicles continues to ramp up following bottlenecks in production, particularly with battery modules.
“As we continue to strengthen our [internal combustion engine] portfolio, scale EVs and reinvest in the business, we are very focused on capital efficiency, enhancing profitability and free cash flow, and we will continue to take steps to create shareholder value,” GM CEO Mary Barra said in a letter to shareholders.
Jacobson said the company still plans to produce between 200,000 and 300,000 EVs during 2024.
While North America continues to be strong for the automaker, vehicle inventory levels in the U.S. are rising. The company ended the first quarter with a 63 days’ supply of vehicles – above the automaker’s previous guidance of 50 days to 60 days.
Jacobson said the company is watching those levels but is not too concerned about the number of vehicles ahead of a spring and summer selling season that includes some factory shutdowns for retooling.
“We actually feel pretty good about where we are,” he said. “It’s something that obviously we’re watching. But right now, no signs of any softness that we can see.”
GM’s financing arm reported adjusted earnings of $737 million during the first quarter, down 4.4% from a year earlier.
Correction: This story has to been updated to correct that General Motors plans to produce between 200,000 and 300,000 EVs during 2024.

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The FTC sued to block the $8.5 billion acquisition of Capri Holdings by Coach and Kate Spade’s parent company, Tapestry.
The fashion tie-up would put six major brands under a single company: Tapestry’s Coach, Kate Spade and Stuart Weitzman and Capri’s Versace, Jimmy Choo and Michael Kors.
The deal was expected to close this year.

Pedestrians walk past a Coach store and a Michael Kors store.
Scott Olson | Getty Images

The U.S. Federal Trade Commission on Monday sued to block the $8.5 billion acquisition of Capri Holdings by Coach and Kate Spade’s parent company, Tapestry.
The move by regulators brings at least a temporary halt to a deal that would marry two major names in American luxury retail and put six fashion brands under a single company: Tapestry’s Coach, Kate Spade and Stuart Weitzman and Capri’s Versace, Jimmy Choo and Michael Kors. With the transaction, the luxury brands could be poised to better compete with European luxury names, such as Burberry and LVMH’s Louis Vuitton.

In a news release, the FTC said the combined company would harm shoppers and employees. It said Tapestry and Capri “currently compete on everything from clothing to eyewear to shoes.”
“With the goal to become a serial acquirer, Tapestry seeks to acquire Capri to further entrench its stronghold in the fashion industry,” Henry Liu, director of the FTC’s Bureau of Competition, said in the release. “This deal threatens to deprive consumers of the competition for affordable handbags, while hourly workers stand to lose the benefits of higher wages and more favorable workplace conditions.”
Tapestry argued the federal agency “fundamentally misunderstands both the marketplace and the way in which consumers shop.”
In a statement, the company said it must win the business of consumers who increasingly shop across brands, channels and price points.

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“The bottom line is that Tapestry and Capri face competitive pressures from both lower- and higher-priced products,” it said. “In bringing this case, the FTC has chosen to ignore the reality of today’s dynamic and expanding $200 billion global luxury industry.”

Capri echoed that argument in its own statement, saying consumers “have hundreds of handbag choices at every price point across all channels, and barriers to entry are low.”
Tapestry and Capri both said they will fight for the transaction in court, with Tapestry saying it will work “expeditiously to close the transaction in calendar year 2024.”
Tapestry announced the proposed acquisition in August. The deal had been expected to close in 2024. It had already secured approval from regulators in Europe and Japan, according to a financial filing by the company earlier this month, but was still waiting for the approval of U.S. officials — the only regulator still outstanding.
When Tapestry unveiled the deal, CEO Joanne Crevoiserat told CNBC that the combined companies would be able to reach more customers across the globe. Together, the two companies would have over $12 billion in annual revenue and a presence in more than 75 countries.
Both Tapestry and Capri have been under pressure, as consumers continue to be choosier with discretionary spending. Yet Capri, in particular, has been more vulnerable because of its heavier reliance than Tapestry on department stores and other wholesale retailers.
Led by Crevoiserat, Tapestry has raised the profile of Coach’s brand, attracted younger shoppers, and tried to lean on fashion and loyalty, rather than deep discounts, to drive higher sales and profits. The vast majority of Tapestry’s sales are through its own website and stores, with wholesale accounting for only about 10% of sales globally in the most recently reported fiscal quarter.
As of Monday’s close, shares of Tapestry are up nearly 10% so far this year compared with the stock of Capri, which has fallen about 24% over the same period.

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Express filed for Chapter 11 bankruptcy as an investor group led by brand management firm WHP Global looks to acquire most of its assets.
The longtime mall retailer has failed to stay on trend and keep up with shifting consumer demand, which has led sales to plummet in recent years.
Express, whose portfolio includes its namesake banner, UpWest and Bonobos, said operations will continue as normal but 95 Express stores and all UpWest stores will close.

Pedestrians walk past an Express Inc. store in New York, U.S., on Wednesday, May 31, 2017.
Mark Kauziarich | Bloomberg | Getty Images

Longtime mall retailer Express filed for Chapter 11 bankruptcy protection in Delaware federal court on Monday, but a group of investors led by brand management firm WHP Global is looking to save the company by acquiring it. 
Express, whose portfolio includes its namesake banner, Bonobos and UpWest, said it will close 95 of its eponymous shops and all of its UpWest doors. As of last January, the company had 553 total stores, according to company securities filings. It’s not clear how many of those were UpWest stores, but the brand’s website shows that it has 10 locations.

Closing sales are expected to begin Tuesday. The company said hours for remaining stores won’t change and it will continue to accept orders and returns as usual.
In a news release, Express said it filed for bankruptcy to “facilitate” a sale process of most of its retail stores and operations to the investor group, which includes WHP, Simon Property Group and Brookfield Properties. It received a nonbinding letter of intent from the investors to buy the assets, and has also secured $35 million in new financing from some of its existing lenders, subject to court approval. 
“The proposed transaction will provide Express with additional financial resources, better position the business for profitable growth and maximize value for the Company’s stakeholders,” Express said. 
Express also secured $49 million in cash from the IRS related to the CARES Act – a critical influx of liquidity that the company had been waiting on to shore up its balance sheet. 
“We continue to make meaningful progress refining our product assortments, driving demand, connecting with customers and strengthening our operations,” CEO Stewart Glendinning said in a statement. 

“We are taking an important step that will strengthen our financial position and enable Express to continue advancing our business initiatives,” he added.
The business casual apparel brand, founded in 1980 by Les Wexner’s Limited Brands, has seen sales plummet over the last few years as debt and costly mall leases dragged down its business. 
In a court filing, Express said that it had $1.3 billion in total assets and $1.2 billion in total debts as of March 2.
Earlier this month, CNBC reported that Express was struggling to pay its vendors on time, indicating it was in financial distress and struggling to manage cash flows. When retailers can’t pay their vendors, suppliers sometimes tighten payment terms or refuse to fulfill orders, which can further pressure a company’s liquidity.
Last spring, Express acquired Bonobos’ operating assets and related liabilities for $25 million from Walmart in a joint deal with WHP. The deal came as Express’ “core business was weak, and cash was tight,” GlobalData managing director Neil Saunders said in a Monday note.
Still, its biggest problem was declining revenue, which has fallen by about 10% since 2019, Saunders said. 
“This stands in marked contrast to an apparel sector that has grown strongly over the same period. This has put the company under a lot of financial strain and has resulted in some significant losses. None of this is sustainable which is one of the reasons for bankruptcy,” said Saunders.  
“The woes at Express are not all of its own making,” he said. “The formal and smart casual market for both men and women has softened over recent years because of a rise from working from home and the casualization of fashion. This puts Express firmly on the wrong side of trends and, in our view, the chain made too little effort to adapt.”
Bankruptcy will provide some key relief to Express and help it get back on stronger footing as it works to implement its turnaround strategy. It’ll allow the retailer to get out of costly and burdensome leases, many of which are in struggling malls, and has made the company more attractive to buyers. 
Powerhouse law firm Kirkland & Ellis, which led Bed Bath & Beyond and many other failed retailers through their bankruptcies, is serving as Express’ legal counsel. Moelis & Co. has been tapped as its investment banker and M3 Partners has signed on as its financial advisor.

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