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.
EXCLUSIVE: Two and half months after John Targon, cofounder and codesigner of Baja East, was hired as creative director of the contemporary division at Marc Jacobs, he has left the company, WWD has learned. Marc Jacobs International, which is owned by LVMH Moët Hennessy Louis Vuitton, confirmed Targon’s departure in a statement: “John Targon is a talented designer and we appreciate the work he has done here. Ultimately working together did not make sense for the brand and we wish him the best.” Read the story by @jessiredale, link in bio. #wwdnews
@theluxurycollection is officially launching a collection, tapping Sofia Sanchez de Betak for the capsule. Over 30 styles will be featured in the Chufy x The Luxury Collection, debuting next month at Bergdorf Goodman, The Webster, FiveStory and more. De Betak, known as “@chufy,” drew inspiration for the collection from her trips to Japan in the past year #wwdfashion
@lhd, founder and CEO of @thewebster, has teamed up with @lebonmarcherivegauche for the European launch of her ready-to-wear line, LHD. The launch will come with an exclusive pop-up opening today that’s set to run through May 20. Located on the second floor, it carries her debut Miami-themed resort collection, launched in November as see-now-buy-now. #wwdfashion
@longchamp, which marks its 70th anniversary this year, just opened its biggest U.S. store on Manhattan’s Fifth Avenue. On the lower level there’s a floor-to-ceiling display of the brand’s iconic Le Pliage bag – in all of its different colors, shapes and sizes. Customers can also have their product personalized in-store by imprinting names, initials or emblems. #wwdfashion (📷: @ericmtownsend)
“Whenever I’m in that place of sound and music, I don’t have fear or nervousness…This album has a lot of themes of courage and boldness and I want to be the soundtrack for people’s lives. I’ll be so happy if [my songs] evoke strength in people, which I know music has done for me,” says @kimbramusic of her newest album “Primal Heart.” The New Zealand-born singer sat down with WWD to talk about her music, newest tour and connecting with hear fans — read more on WWD.com #wwdeye (📷: @jilliansollazzo)
Luxury handbag resale company @rebagofficial is planning to sell a rare collectible for $70,000: the @hermes White Crocodile Himalayan Birkin. The exclusive Birkin sold for about $100,000 in 2008, when @davidbeckham bought one for his wife @victoriabeckham to add to her collection. Read more about the rare Birkin on WWD.com #wwdaccessories
With her costume pearl necklace and what-you-see-is-what-you-get style, Barbara Bush, who died Tuesday at age 92, was a straight-shooter from start to finish.
Born Barbara Pierce in New York City, Bush served as the 37th first lady, as well as the country’s second lady from 1981 to 1989. In addition to being part of the longest presidential marriage — 73 years — Bush also had the unlikely distinction of having one son, George W., become the 43rd president and another son, Jeb, run unsuccessfully in 2016. Having served as second lady during the Reagan administration’s two terms and lived all over the world during her own husband’s ascending political career, Barbara Bush made it clear that literacy — not fashion — was her priority. Read more from Rosemary Feitelberg’s obituary on the late First Lady in WWD.com, link in bio. #barbarabush #wwdnews
Western and ’90s trends have influenced denim for fall 2018. Think raw, dark and coated jeans mixed with bold prints and tough leather. #trendtuesdays #wwdfashion (Styled by @thealexbadia;📷: @ryanplett)