Destination XL Group Inc. reported a broader loss for the third quarter, but saw strong response to its growing fleet of DXL big and tall superstores.
In the three months ended Nov. 2, the company’s net loss expanded to $4.1 million, or 8 cents a diluted share, from a loss of $1.6 million, or 3 cents, in the 2012 period. Analysts expected a slightly deeper loss of 9 cents a share.
Revenues contracted 0.6 percent to $88.2 million from $88.7 million. Comparable sales rose 4.4 percent as a 6.4 percent comp increase in the company’s stores was offset by a 4.5 percent decline in its direct channel, with e-commerce up 7.9 percent, but the firm’s discontinued catalogue business off 73.3 percent. Gross margin grew to 44.5 percent of sales from 44 percent a year ago.
Investors were drawn to the double-digit comp increases at the larger, more upscale DXL stores. The company is in the process of converting its portfolio to the new format, and the 36 stores open at least a year had a sales increase of 11.3 percent. With the addition of 38 stores that had been remodeled or relocated, revenues were up 17.7 percent.
The performance of the DXL concept helped lift shares of the Canton, Mass.-based retailer 61 cents, or 9.5 percent, to $7.06 in Nasdaq trading Friday.
DXL’s performance was also helped by its first national marketing campaign, No Man’s Land, which kicked off at the end of September and uses humor to address frustrations the larger customer faces.
David Levin, chief executive officer, said the company has seen “a dramatic and positive effect from the campaign.” Comps in October for the company’s DXL stores rose 25.3 percent. “So you can see how well these stores performed with the strength of the campaign behind them,” he said.
Levin said average transaction size in the period also increased 17.4 percent, which he attributed in part to “a greater mix of high-priced main brands as well as tailored clothing.” He said every store has a Polo Ralph Lauren shop and carries such well-known brands as True Religion, Calvin Klein and Lacoste. “Some of these brands were not even available in big and tall sizes until we opened Destination XL,” he said. “We’re pleased with the early customers’ response to our name-brand offerings, which is reflected in our average transaction size.”
Levin said a higher mix of tailored clothing is also attracting shoppers.
“In every DXL store we offer several hundred square feet dedicated to clothing. Our custom made-to-measure offering, which includes a robust selection of suits, sport coats, dress pants and shirts, is also progressing well. With all these wardrobe options available, we’re attracting a new category of customer that we call the end-of-rack shopper. They would shop at department stores, but options are limited. These are younger, smaller-waisted and more brand-conscious. Attracting the end-of-rack customer, which represents 65 percent of the total big and tall market and who tends to have a higher spend per transaction, increases our total available market.”
Levin said customers with waist sizes below a size 46 accounted for 43.5 percent of sales in October, up from 36.3 percent at the end of 2012.
EXCLUSIVE: @tomford is opening its first-ever beauty store. The boutique, which opens November 20 in London’s Covent Gardens, was designed with the over-the-top glam Ford is known for. Read the full story on WWD.com, link in bio. #wwdbeauty #wwdnews (📷: Simon Wagner) #TomFordBeauty
New York-based DJ @harleyvnewton threw a party to celebrate the holiday collection of her dress and pajama line @hvn at the Ladurée Beverly Hills. It Girls @katebosworth, @rashidajones and more joined in on the fun, which included cocktails, croque monsieur sandwiches and a photo booth. #wwdfashion (📷: Owen Kolasinski/BFA.com)
For the holidays, @Burberry partnered with 20-year-old artist @blondeymccoy on a series of three outdoor murals in downtown Manhattan. The murals are McCoy’s interpretation of a Christmas eve party, the idea of charity and the spirit of family. His third mural, pictured here, is the most personal. The image depicts McCoy’s grandparents and father in London’s Trafalgar Square in the Seventies. “My work often features lots of sentimental objects.” #wwdeye
For spring 2018, designers applied bold colors and cartoonish motifs on everything from sneakers and belts to key chains. See all the top men’s accessories trends on WWD.com. #wwdtrends (📷: George Chinsee; Prop Styling by @rnasti; Market Editor: @luiscampuzano)
The @dior-sponsored @guggenheim international gala pre-party has a history of drawing cool-girl musical acts to serenade the crowd –– and last night was no exception. @haimtheband performed songs both new and old, and lured a star-studded audience with the likes of Rebecca Hall, Kate Mara, Mamoudou Athie and more. #wwdeye (📷: @lexieblacklock)
In a partnership between the @metopera and the @englishnationalopera, “Marnie” was born. The opera, with costumes sponsored by @mrporterlive, is an adaptation of the 1961 thriller by Winston Graham. Arianne Phillips, who created the costumes, is no rookie: She’s styled Madonna for her tours and created costumes for a myriad of films in the past. Read WWD’s interview with Phillips, where she talks about her inspiration for the opera’s costumes on WWD.com #wwdfashion
@barneysnyc took a different approach to their holiday windows this year. Instead of Christmas decor, Barneys tapped @thehaasbrothers to tell a story of positivity, gratitude and inclusivity via heartwarming silliness and humor. “It’s about kids and it’s about coming together and being family and loving each other,” said Simon Haas. #wwdfashion (📷: @joshuascottphoto)
Beauty influencer @kandeejohnson makes her foray into hair care with a collaboration with @ogx_beauty — making it the first time that OGX has teamed up for a product creation. The collab includes shampoos and conditioners in three scents. At 39 and a mom, Johnson is a different profile than the emerging social media stars, but is considered one of the pioneers of the digital beauty influencer world. Read WWD’s interview with her on wwd.com, including the strangest beauty product she’s ever tried #wwdbeauty