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At Express, comps fell 21 percent and had a higher markdown rate, Kenneth Venner, chief information officer, said on the call. "Growth continued in pants but was more than offset by declines in casual bottoms and knit tops," Venner said. "Selling on crop pants in the first quarter was well below our expectations, driven by color and fit issues. We expect that the second quarter will continue to be challenging for Express, although we are doing everything we can to optimize margins. Our priorities are clearing through underperforming merchandise and fixing our fashion issues by the fall season."
Emme Kozloff, an analyst with Sanford Bernstein & Co., noted in a report that the quarterly loss at Express "is twice the amount that Express earned in all of 2004, which was half that earned in the prior year." However, "while investors might be clamoring for disposal of the apparel business now more than ever, the value equation is unlikely to work in shareholders' favor given the deterioration in performance. Even if the business was up for sale, it's unclear whether any buyers would be interested for a reasonable price."