NEW YORK — Casual Male is abandoning the Jared M. business.
In releasing its third-quarter results last Tuesday, the Casual Male Retail Group said Jared M., which it purchased in the May of 2006, would be discontinued by either selling it off or shutting it down.
In a conference call with analysts, David Levin, president and CEO, said: “We have determined that the amount of resources required to make that scale of the business is not aligned with our strategic growth plans. We acquired Jared M. in May of 2006, as an opportunity to build a high-end custom business. Jared M. required its own infrastructure and took CMRG’s management group from its core competency of operating retail concepts into trying to operate a custom manufacturing business. Therefore, we feel it’s in CMRG’s best long-term interest to focus on extending our core businesses and growing our recently launched B&T Factory Direct, LivingXL and ShoesXL Direct channels.”
Additionally, Levin said the company will expand its Casual Male and Rochester brands into the European market. Through a deal with GSI Commerce, a third-party operator that will oversee the fulfillment and call center operations, the company will begin selling in six countries on the Web in August of next year with plans for further expansion beyond 2008.
“We’re optimistic about the opportunity based on the success of our London-based Rochester store,” Levin said. “It’s the second-highest-volume store in the company and continues to be one of our best comp stores year in and year out, and currently there is nothing in Europe that offers the marketplace the strength of brands and assortments that we carry today.”
Levin reiterated that over the past several months Rochester has been “in a transition period. We have been overbranded and overassorted and we have been diligently trying to reposition Rochester for the future. We are experiencing some negative impact on the gross margins in this division as we reposition the product mix going into 2008.” The retailer is having “tremendous success” attracting younger customers to the Casual Male stores, he said, and a shift in the mix at Rochester is having similar results. “In the third quarter we introduced the selection of premium denim jeans and more fashionable tops,” he said, and they are “delivering the highest sell-throughs in the division. And going forward we will be increasing our penetration into a broader assortment of young men’s product for the Rochester division.”
That said, the third quarter was no charm for the company. For the three months ended Nov. 3, the company posted a loss of $3.8 million, or 9 cents a share, from a loss of $844,000, or 2 cents, in the year-ago period. Sales dropped slightly to $106.6 million from $106.9 million last year. Total same-store sales fell 1.1 percent. Sales at the company’s retail stores were down 4.8 percent overall but the direct channel business increased 19.6 percent.
For the nine-month period the company saw a loss of $223,000, or 1 cent a share, from a gain of $3.9 million, or 11 cents, in last year’s period. Sales rose 3.3 percent to $332.1 million from $321.5 million.
Levin said the poor results came after 15 consecutive quarters of comp increases. “We strongly believe that the unseasonably warm weather, especially in October, was the significant factor in the slowdown. The good news is that we are currently up 7 percent comp through quarter four, which is more consistent with our sales performance prior to the problematic third quarter.”
Levin said the stores are “on solid ground” and shoppers are responding to the newest private-label lifestyle brand, Oak Hill, as well as the more-established Harbor Bay. The young men’s label, 626 Blue, is also experiencing growth, he noted.
Dennis Hernreich, executive vice-president, CFO and COO, said the company is now expecting sales for fiscal 2007 to be between $470 million and $475 million, down from prior guidance of $495 million to $500 million. Full-year earnings are expected to be 28 to 33 cents a share, excluding impairment charges of 4 cents per share from the Jared M. business. To achieve this, CMRG will need to produce a comparative sales increase of between 4 percent and 7 percent for the balance of the year, he said.
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews
“Stranger Things” is getting a new cast member for season 2. Meet @sadiesink_, the 15-year-old who will be joining the Netflix series for its new season. You may recognize her from “The Glass Castle” with Brie Larson and Woody Harrelson, but the Texas native’s next role goes in an entirely different direction. She describes her character, Max, as “a rough and tumble skater girl [who] becomes friends with the boys at school.” The second season debuts on October 27. (📷: @jgreenery) #wwdeye
Amid the Harvey Weinstein controversy, there’s another sector that’s being put under the spotlight for sexual abuse: the modeling industry. While rumors about abuse and sexual harassment of female and male models — and the photographers, agents and others who perpetrated it — have circulated within the fashion world for years, model @cameronrussell started posting stories from models on Instagram last week about abusive situations they’ve encountered — from sexual harassment and molestation to attempted rape. Over 75 have weighed in so far. Read more on WWD.com. Link in bio. #wwdnews
To celebrate its 16th anniversary, @dylanscandybar tapped designers and celebrities to create mosaics out of candy. The mosaics will be auctioned off to support the philanthropic cause of each participant’s choice. Pictured here is the mural created by @aliceandolivia's Stacey Bendet. For a first look at some of the other artwork being unveiled tonight, go to WWD.com. #wwdeye
The annual Veuve Clicquot Polo Classic in Pacific Palisades this weekend drew Kate Hudson, Tracee Ellis Ross, Laura Dern and more. See pictures of the star-studded event on WWD.com. (📷: @chelsealaurenla) #wwdeye
In his new book “Hollywood Royale,” Andy Warhol’s Protégé Matthew Rolston celebrates the Eighties revival of Hollywood glamour. Featuring more than 100 portraits taken by Rolston from 1977 to 1993, the book contains photos of icons like Michael Jackson, Cyndi Lauper, and @drewbarrymore, pictured here in 1991. “Hollywood Royale,” out today, will be accompanied by an exhibition opening at Los Angeles’ Fahey/Klein Gallery on March 1. #wwdeye