Case Interview Questions #00481: Your client Express, Inc. (NYSE: EXPR) is an American fashion retailer headquartered in Columbus, Ohio and New York City, New York. Express operates over 590 stores in the United States as of April 2011 and generates $1.8 billion in annual sales in fiscal year 2010.
Although primarily associated with women’s clothes, Express is a dual-gender brand. One of their primary selling tool for the business is the product catalog. Recently, the printing and postage costs of your client’s catalog have just been increased from 35 cents to 40 cents per catalog by their catalog publishing company. How can Express decide whether this new cost is feasible for their current direct mail business model? What is the break-even point for the client’s catalog printing and postage costs?
This is a quantitative case where candidate is required to evaluate the feasibility of a change in the cost structure of the client’s catalog business. The candidate should use a framework and walk the interviewer through it. A profitability analysis should follow.