Destination Xl Group, Inc. · NASDAQ:DXLG
Destination Xl — Casual Male Retail Group — Investor Presentation (December 2012)
38 slides from Destination Xl's investor presentation, Dec 18, 2012
Slide 1: Generating Value on the Road to Destination XL
Investor Presentation December 2012 Exhibit 99.1 Generating Value on the Road to Destination XL ®
Slide 2: Safe Harbor
Safe Harbor Certain information contained in this presentation, including, but not limited to, cash flows, operating margins, store counts, earnings expectations for fiscal 2012 and estimates through fiscal 2016, constitute forward-looking statements under the federal securities laws. The discussion
Slide 3: Who is Casual Male Retail Group?
Who is Casual Male Retail Group? Largest multi-channel specialty retailer in niche men’s big and tall (B&T) market Offering unique blend of wardrobe solutions Private label & leading apparel name brands
Slide 4: CMRG by the Numbers
CMRG by the Numbers Active customers Enrolled in loyalty program Highest rated retailer in 2011 CSI Customer Survey Retail Direct Retail Stores Brands Customer Satisfaction
Slide 5: Who is Our Customer?
Who is Our Customer? Males with a waist size 42” and greater (35M men in US). Determined by physical characteristic, not demographic. Not dependent on age, income, race or nationality Seeking greater selection in size. Values convenience, selection and fit over price.
Slide 6: Attractive Big & Tall Segment
Attractive Big & Tall Segment Men’s B&T market annual sales approximately Current CMRG market share of ~ 11% B&T men account for approximately 11% in U.S. Growing at nearly twice the rate of the regular size men’s apparel market B&T consumers shop 50% more for apparel on the Internet than regular si
Slide 7: Why Invest in CMRG?
Why Invest in CMRG? Accelerated conversion to DXL concept creates compelling investment opportunity Leader in large and growing B&T market Strong gross margins; Ability to greatly improve operating margins Three-year $150M investment in DXL rollout to be funded by free cash flow, including use of $4
Slide 8: Our Current Casual Male XL Stores
Our Current Casual Male XL Stores
Slide 9: What Our Customer Wants
What Our Customer Wants Large changing rooms More brand selections Suggested wardrobe solutions Wide aisles One-stop shopping Bright atmosphere On-site tailoring
Slide 10: Responding with DestinationXL
Opened 4 DXL concept stores Opened 31 DXL stores Opened 12 DXL stores Opportunity for accelerated growth and profitability Responding with DestinationXL ®
Slide 11: Market Consolidation to DXL
DXL Schaumburg, IL 0.9 miles 9451 Schaumburg, IL 9183 Niles, IL 11.4 miles 9512 Bloomingdale, IL 11.2 miles Market Consolidation to DXL Chicago Metro Chicago Metro Customers are willing to drive up to 20 miles
Slide 12: Casual Male XL vs. DestinationXL
Average Store size 3,400 sq. ft. 8,000 sq. ft. Sales per sq. ft. $166 $175 ($229 by 2016) Build out costs $50 $70 Occupancy costs $30 $30 Dollars per transaction $101 $142 Style choices 2,000 Private label brands Name brands Casual Male XL vs. DestinationXL ®
Slide 13: Large Selection of Name Brands
Large Selection of Name Brands
Slide 14: Fate:
Fate: pe | AT ct
Slide 15: DXL Men's Apparel
D xX Le MENS APPAREL
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Slide 20: DXL Comps Reflect Growth Opportunity
DXL Comps Reflect Growth Opportunity *Total CMRG Comparables include all stores and direct channel 10 stores 14.5% 14 stores 9.0% 14 stores 12.8% 20 stores 16.3% 29 stores 17.1% 31 stores 13.8% 0.7% 0.8% 2.1% 2.0% 2.0% 1.5% 0.0% 5.0% 10.0% 15.0% 20.0% Q3 2011 Q4 2011 FY 2011 Q1 2012 Q2 2012 Q3 2012
Slide 21: Comparable Sales Definition
Comparable Sales Definition • Comparable sales for all periods include retail stores that have been open for at least one full fiscal year. • Stores that have been remodeled, expanded or re-located during the period also are included in determination of comparable sales. • Most DXL stores are consid
Slide 22: Compelling DXL Returns
Compelling DXL Returns Better leveraging of expenses -- occupancy, labor productivity and local/district management Projecting higher 4-wall profits than combined profits of individual stores Targeting between 25%-30% store operating margin Potential to capture additional market share Opportunity to
Slide 23: Accelerated DXL Openings
Accelerated DXL Openings 2015 Store Count Target DestinationXL ® 225-250 Casual Male XL Outlet ~50 Rochester Clothing Accelerated rollout based on success of DXL stores in 2011 Total Stores: (460) (450) (413) (350) (309) (280-305)
Slide 24: DXL Sales Increase as % of Total Revenue
DXL Sales Increase as % of Total Revenue * DXL sales include direct sales via the DXL website.
Slide 25: Accelerated Rollout of DXL
Commence new marketing strategy Open DXL stores / Close CMXL stores Operating margins in the range of 4% - 5% CapEx expected to be $35M Open DXL stores / Close CMXL stores Operating margins in the range of 4%-5% Lease exit and asset impairment charges in the the range of $8-$12M CapEx expected to pe
Slide 26: Accelerated Rollout of DXL
Accelerated Rollout of DXL * Net of subleases Complete rollout with - opened DXL stores and Closure of remaining 60 Casual Male XL anchor stores Operating margins gain traction and increase to 8% - 9% (from 4.2% in ‘11) CapEx expected to be approximately $35M Lease exit and asset impairment charges
Slide 27: Full benefit of DXL concept drives revenue >$600M
Full benefit of DXL concept drives revenue >$600M Open average of 10 DXL stores per year Approximately CMXL outlet stores and Rochester Clothing stores remain open Operating margins >10% Accelerated Rollout of DXL Generating free cash flow in the range of $55 2012 - 2012 - -$65M
Slide 28: DXL Customer Purchase Funnel
DXL Customer Purchase Funnel* Addressable Population Aware of DXL Visiting DXL Purchasing from DXL Repeat DXL’s addressable market is primarily men with over 40” waist Awareness of DXL is low across its markets, directly impacting ability to attract new customers Of those aware of DXL, only 8% are v
Slide 29: Raising DestinationXL Awareness
Launched DestinationXL rebranding initiative Engaged advertising firm Hired Chief Marketing Officer in June 2012 Identified target customers Began developing marketing strategy Developed balanced marketing budget Raising DestinationXL ® Awareness
Slide 30: Opportunity to Grow Market Share
Opportunity to Grow Market Share • Capture greater wallet share with DXL concept – Expansive selection blending private label/name brand apparel – Appealing shopping environment – Opportunity to grow clothing business with more complete solution • Attract a broader customer audience with one-stop-sh
Slide 31: Financial Performance
Financial Performance
Slide 32: Sales and Gross Margin
44.5% 44.4% 42.7% 44.2% 44.9% 47.0% Sales and Gross Margin Strong gross margins provide opportunity for significant sales leverage $465.4 $464.1 $444.2 $395.2 $390.0 $397.7 $284.8 46.1% 38% 40% 42% 44% 46% 48% 50% $0 $100 $200 $300 $400 $500 2012 YTD Revenue ($ mm)
Slide 33: Operating Margin & Comparable Sales
* Before impairment charge of $23.1m Operating Margin & Comparable Sales Focus on improving operating margins through greater DXL sales 2.2% 4.2% 5.5% 2.3% (1.3)% 2.0% 4.1% 4.2% 2.4% (15%) (10%) (5%) 0% 5% 10% 15% 2011* 2012 YTD CMRG Annual Historic Operating Margin 4.4% 4.5% 9.0% 2.0% (1.3)% (10.8)
Slide 34: Strict Expense Management
$28.6 $30.9 $34.4 $34.1 $19.1 $19.0 $19.6 36.0% 36.7% 38.4% 42.7% 38.2% 38.3% 38.9% Strict Expense Management $13.6 $151.9 $168.8 $178.1 $178.1 $151.0 $150.9 $154.8 $113.1 39.7% 30.0% 33.0% 36.0% 39.0% 42.0% 45.0% $0 $50 $100 $150 $200 2012 YTD ($ mm) Marketing Expense Total SG&A SG&A as a Percentag
Slide 35: Strong Debt-Free Balance Sheet
Q3 $117.8M $98.6M $90.0M $92.9M $104.2M $116.1M $41.0M $38.7M $3.5M - - $7.6M - - - $4.1M $10.4M $5.2M $17.3M $12.5M $7.6M - - - Strong Debt-Free Balance Sheet Inventory Borrowing under revolver Cash on hand Fixed term loan
Slide 36: Free Cash Flow and CapEx
$4.6 $9.0 *Free cash flow is defined as cash flow from operating activities, less capital expenditures and discretionary store asset acquisitions . $(13.6) $(9.7) $7.6 $26.2 $10.0 $5.4 $(12.9) $22.7 $21.4 $12.6 $18.0 $21.3 ($20) ($10) $0 $10 $20 $30 ($20) ($10) $0 $10 $20 $30 2012 YTD ($ mm) Free Ca
Slide 37: Why Invest in CMRG?
Why Invest in CMRG? • Accelerated conversion to DXL concept creates compelling investment opportunity – Investment to be funded by operating cash flow • Leader in large and growing B&T market • Strong gross margins • Ability to greatly improve operating margins • Three-year $150M investment in DXL r
Slide 38: For additional information:
For additional information: Jeffrey Unger Casual Male Retail Group, Inc. V. P. Investor Relations 561-482-9715 Office 561-543-9806 Cell jeffunger@usa.net www.destinationxl.com
Casual Male Retail Group — Investor Presentation (December 2012) on 6ix