The slowdown in spending by the affluent has hit Casual Male Retail Group Inc., which said Thursday it will downsize its upper-end Rochester Big & Tall chain.
In reporting fourth-quarter losses of $108 million on an 8.1 percent decline in sales, David Levin, chief executive officer of the Canton, Mass.-based men’s big and tall retailer, revealed the eight stores the company has opened since acquiring the chain in 2004 “all generated negative EBITDA,” or earnings before interest, taxes, depreciation and amortization.
“What we are now experiencing is consistent with what other retailers have been reporting,” Levin said. “There is a trade down effect going on, with the luxury sector taking the brunt of the negative [comparable-store sales] performance. In the fourth quarter, Rochester comp sales were down 19.5 percent, while Casual Male XL comps were down 7.2 percent. Sales in our outlet stores were considerably better, while our direct B&T business was actually up over last year.”
As a result, five locations will be converted to “hybrid stores” by the end of the second quarter, he said. The units will be cobranded Casual Male XL/Rochester and will offer a larger assortment of lower-priced merchandise.
Levin declined to provide the five locations but said three were stores Casual Male had opened and two were in existence before the acquisition. All have a Casual Male XL store within one mile of the Rochester location and three are located within 100 yards of one. The smaller Casual Male stores will be closed and the larger Rochester locations will be retained with the hybrid format.
All told, Rochester operates 26 stores including flagships in New York, London, San Francisco, Beverly Hills and Chicago.
As sales at Rochester experienced “dramatic deterioration” in the fourth quarter, the company decided “to take significant markdowns to ensure that we wouldn’t carry aged inventory into 2009,” Levin said. “The path we took was similar to what was happening at high-end department stores — in other words, a lot of apparel went out the door at up to 70 percent off. While it was painful, we did end the year with 21 percent less inventory on a store-for-store basis.”
Additionally, the company determined that while New York, London, Beverly Hills, Chicago and several other major markets can support a store that offers Polo Ralph Lauren, Calvin Klein, Tommy Bahama and other higher-priced brands, locations in secondary or suburban markets “can’t support Rochester as a pure play.” The hybrid stores will carry nearly all of the Casual Male assortment as well as a smattering of Rochester merchandise chosen by “the history of the brand’s performance” in those markets, Levin said.
“We’ll do five stores and see how customers react,” he noted.
The hybrid stores will be about 6,000 square feet, but there are no plans to open additional units with that format.
For the three months ended Jan. 31, the loss was $108 million, or $2.61 a diluted share, against income of $638,000, or 2 cents, in the year-ago quarter. Excluding impairment and other charges, the loss would have been $6 million, or 14 cents a diluted share. Sales were down 8.1 percent to $123.1 million from $133.9 million, while comps declined 9.3 percent.
For the year, the loss was $109.3 million, or $2.64 a diluted share, against income of $414,000, or 1 cent, in 2007. Sales declined 4.3 percent to $444.2 million from $464.1 million.
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews
@prada is introducing a new project at its men’s fall 2018 show this Sunday: “Prada Invites.” The fashion house invited four celebrated creative minds – @ronanaerwanbouroullec, Konstantin Grcic, @herzogdemeuron and @rem.koolhaas – to each create a unique item with its iconic nylon material. The designs will be unveiled on the runway show, which will take place at the company’s warehouse in Viale Ortles 25. #wwdfashion #mfwm (📷: @martinocarrera)
@kering_official is spinning off its stake in puma in an effort to focus on its luxury brands, the brand operator announced yesterday. “We are proud to have supported the turnaround of Puma, which now has unrivaled capabilities to take full advantage of the specific dynamics of its global markets and is poised to achieve substantial growth,” said François-Henri Pinault, Kering’s chief executive officer and chairman. Artémis will become a “long-term strategic shareholder” of Puma with a 29 percent stake. #wwdnews #wwdfashion (📷: @jilliansollazzo)
The fashion world mourns for celebrated street style photographer, Nabile Quenum, who died at age 32 in Paris.
Quenum, creator of the fashion blog “J’ai Perdu Ma Veste,” was a fashion week fixture, and regularly shot for New York magazine’s The Cut, among other outlets, and brands such as Louis Vuitton, Moncler and Adidas. He was also actively involved in the #NoFreePhotos initiative, which kicked off in the fall. Read more about Quenum in @kbsmoke's story on WWD.com. #wwdnews
@verwanggang and @maisonladuree have teamed up on a dessert collab called Vera Wang Pour Ladurée. The collection, which launched this week, features a specialty macaroon, as well as a wedding cake inspired by one of the designer’s gowns. “I could not imagine a more delicate or sophisticated creation to grace any couple’s celebration,” said Wang. #wwdfashion