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Casual Male's new Tall Stores are
Working well.
Casual Male Retail Group Inc says its new store concept, Destination XL, is
seeing higher average transactions at its first outlets in a key test for the
big and tall men's apparel chain.
Destination XL will eventually supplant the company's two chains currently
serving shoppers at different price ranges: Casual Male XL and the higher-priced
Rochester Big & Tall.
The company recently opened the first two Destination XL stores, one outside
Chicago and a second in Memphis. Its third location, in Las Vegas, opened last
week. The store is bigger and offers a greater variety than either individual
chain.
"Now we have a vehicle that we can take anywhere," Chief Executive David Levin
told Reuters in an interview. "It's like a Casual Male store on steroids."
Early reads on sales at the two newly opened stores show that average
transactions are higher and that customers drove longer distances to shop at the
store, said Levin. He cautioned that the data had not yet been quantified.
"We're very pleased with the higher transactions," said Levin. "We're very
pleased with the early results."
The company reports second-quarter earnings on Thursday.
Investors question how many stores will open under the new Destination XL
concept, and how soon, after the company decided to stop opening individual
Casual Male and Rochester stores.
The company currently operates 454 Casual Male stores and 19 Rochester stores.
Destination XL's format is closer to a department store, offering both casual
and formal wear at multiple price points. Its Vegas outlet covers 13,000 square
feet compared with an average of about 3,500 square feet per store for the
individual retail chains.
The company's more well-heeled Rochester shoppers will find $248 Robert Graham
shirts, for example, or Polo shirts for $80. At the other end of the spectrum,
Casual Male customers will find $25 private label T-shirts, $250 suits or $59
khaki pants.
While the Destination XL strategy is a departure from a current trend in retail,
where department stores are opening more off-price outlets and smaller spaces
are sought, Levin hopes the variety will inspire shoppers to spend more.
"We don't expect our Casual Male customer to spend $248 from $50," he said. "But
he will spend $100 from $50."
A fourth Destination XL store will open in Houston in early September, but Levin
would not project the further roll-out.
Some analysts see Destination XL as a catalyst to long-term market-share gains
and a more successful second half. But Stifel Nicolaus's Richard Jaffe
questioned whether the concept would appeal to male shoppers, who in general do
not enjoy browsing through big stores
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