David Levin, the longtime president and chief executive officer of Destination XL Group Inc., will retire by the end of this year.
Heidrick & Struggles has been retained to search for a successor to helm the country’s largest big and tall men’s retailer. Candidates from within and outside the company will be considered. Levin, 66, has said he will be available to provide support during the transition period.
The company made the announcement at the same time it reported a fourth-quarter net loss of $3.3 million, compared to net income of $1.8 million in the same period last year, despite a sales increase of 9.5 percent to $135.5 million. On a non-GAAP basis, adjusted earnings before income, taxes, depreciation and amortization fell to $5 million from $10.8 million.
For the fiscal year, the company’s net loss grew to $18.8 million from a loss of $2.3 million a year ago, on a sales increase of 3.7 percent to $468 million. Adjusted EBITDA for the year fell to $17.1 million from $31.6 million.
Comparable-store sales increased 4.3 percent in the quarter and only 0.9 percent for the year.
The company’s stock fell 19.5 percent in morning trading to $1.85, the second-lowest rate in its history.
Levin attributed the earnings decline to an increase in marketing expenses and said the company would cut back on its store openings to only three units in fiscal 2018 as it seeks to lower capital expenditures. The company also said Jim Davey, a former Timberland executive, has joined DXL as chief marketing officer.
In its earnings call, Levin said there is a bright spot in the company’s performance since the beginning of this year. “To date, our total company comparable sales are trending positive low-single digit and we’re encouraged about our prospects for 2018,” he said.
He said point-of-sale technology will be updated within the company’s fleet of stores by spring to allow sales associates to search for sizes and colors that may not be available in the physical retail units. “Our store associates are very excited about the upgrade and believe that they’re having a faster and more efficient process to complete web sales from the stores that will result in additional sales and in even higher customer satisfaction,” he said.
Additionally, he said, by June DXL will unveil a redesigned web site intended to increase digital sales for the company.
Regarding his impending retirement, Levin said: “Over the past 18 years under my leadership, the company has transformed itself from a dated bricks-and-mortar and catalogue business to DXL, a fresh and dynamic omnichannel retailer serving XL guys around the world with their preferred brands. I believe that now is the right time for our new ceo to take the helm and leave DXLG in his next exciting phase of growth.”
Seymour Holtzman, executive chairman of the board, said: “Under David’s leadership, DXL has evolved into a lifestyle brand widely recognized for big and tall guys everywhere and is the leading specialty apparel retailer in the sector. Our leadership team has never been stronger and we look forward to a seamless ceo transition.”