Mall mainstay Express avoided liquidation and shutting all its stores after it was bailed out of Chapter 11 proceedings by a group including three of its landlords for a reported $174 million.

Most of the Columbus, Ohio-based apparel chain's assets and operations have been acquired by a new joint venture, Phoenix, led by brand manager WHP Global in collaboration with mall giants Simon Property Group and Brookfield Properties — companies that have worked to shore up their tenants in the past — as well as Centennial Real Estate. Express is a tenant at properties owned by all three retail landlords.

The deal, approved by a bankruptcy court, is slated to close this week. Express includes not only its namesake chain, featuring business-casual clothing, but also apparel company Bonobos. The price was $136 million in cash and $38 million in assumed liabilities, according to WWD and Bloomberg News.

In a statement, Phoenix said it "will focus on strengthening the core operations of Express and Bonobos, ensuring the continuity of more than 450 physical stores, e-commerce operations and the preservation of nearly 7,000 jobs across the country." The joint venture "will serve as a financially revitalized DTC [direct-to-consumer] retail platform and set the stage for long-term growth for the Express and Bonobos brands, according to the statement.

"Today's court approval and the formation of Phoenix marks a vital step in our mission to save Express Inc. and continue serving millions of customers who love the Express and Bonobos brands," Yehuda Shmidman, WHP chairman and CEO, said in a statement. "With the restructuring actions accomplished during the Chapter 11 process, we believe Express is now well-positioned for a powerful path forward, benefiting all stakeholders, including our valued vendor partners, licensees, landlords and dedicated team."

Several retailers have sought Chapter 11 protection this year, and not all ended the way Express did. Both 99 Cents Only and The Body Shop shuttered their stores. When Express filed for bankruptcy protection in April, it said it planned to reduce its store fleet by at least 100 locations and that it had a nonbinding letter of intent from a group that included WHP, Simon and Brookfield to purchase its holdings.

Simon, based in Indianapolis, and Brookfield Asset Management acquired department-store chain J.C. Penney out of bankruptcy in December 2020. Simon — in a partnership with Authentic Brands Group called Sparc Group — has bailed other retailers out of Chapter 11 as well, including Aéropostale, Forever 21, Lucky Brand and Brooks Brothers.

During a first-quarter earnings call in May, Simon Property CEO David Simon said the real estate investment trust had sold its stake in Authentic Brands for $1.45 billion. He told Wall Street analysts, however, that the REIT had made "a significant profit" on its investment in Authentic Brands. On the call, the CEO was asked about the REIT's interest and possible involvement with Express.

Simon Property was approached by WHP Global about Express "to participate with no capital" to "add our expertise and knowledge with what we've done in the past" to help the retailer, CEO Simon said back in May. If WHP did succeed in acquiring Express in the bankruptcy as a so-called stalking-horse bidder, "we'd be pleased to participate in the turnaround of Express," Simon said.

"Express is a good company and a great brand," he told analysts. "We can add value to it. ... We have the history of running a retailer out of bankruptcy. ... We see it as a win-win with no capital from our standpoint."

Brookfield Properties declined to comment on Monday about the Express acquisition, while WHP, Simon and the Dallas-based Centennial didn't respond to emails from CoStar News seeking comment.

But Neil Saunders, a retail analyst and managing director of analytics firm GlobalData, weighed in.

"The takeover of Express by Phoenix — a consortium that includes two mall and real estate operators — will provide Express with some stability," Saunders said in an email to CoStar News. "While some stores have already closed, it is now likely that most currently operating shops will remain open."

He added that "the real estate partners will be keen to see Express remain a presence in their malls. That said, work is still needed to refine the Express proposition and the new owners have a lot of work ahead to reinvigorate the business."

As of March, Express said it had roughly 530 Express and Express Factory Outlet stores and 60 Bonobos locations but planned to close 100 stores. In May, the retailer retained RCS Real Estate Advisors to lead the effort to realign and optimize its real estate portfolio.