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.
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast