Destination Xl Group, Inc. · NASDAQ:DXLG
Destination Xl — Casual Male Retail Group — Investor Presentation (January 2006)
49 slides from Destination Xl's investor presentation, Jan 11, 2006
Slide 1: Casual Male Retail Group, January 2006
casualimale —— U MA January 2006
Slide 2: '06 & '07 Initiatives
’06 & ’07 Initiatives • Redefine Casual Male image to increase market share • Store growth – expansion of Rochester Clothing • Continued accelerated growth of internet and catalog • Gross margin improvement
Slide 3: Redefine Casual Male Image
Redefine Casual Male Image
Slide 4: Market Share Size Opportunity
Market Share Size Opportunity Casual Male Sales by Size $0 $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000 $180,000 $200,000 Waist Size Data based on ’04 sales of Casual Pants, Dress Pants and Jeans
Slide 5: Sale $ by size
Sale $
Slide 6: Customer Research
Customer Research Least favorite aspect of clothing shopping was “difficulty finding items in my size” – They were shopping at “the end of the rack” – Stigma with “big and tall” store – “big and tall” stores were consistently referred to as places where “fat guys” shop Current image associated with
Slide 7: 50% of customers refer to Casual Male as the "Big & Tall" store
50% of customers refer to Casual Male as the “Big & Tall” store
Slide 8: Objectives
Objectives • Change the consumer perception of Casual Male to increase awareness of brands, sizes and comfort carried in all channels and appeal to the younger, smaller and taller B&T consumers. • Re-engineer the look and feel of the Casual Male brand in all communications including in- store experi
Slide 9: Casual Male XL
CASUAL: MALE
Slide 10: Reactions to "XL" logo concept
Reactions to “XL” logo concept Majority of respondents reacted positively to these concepts: – “Yes, that’s my size.” / “That’s what I’m looking for.” – “XL” seen as “manly, powerful” rather than overweight – Appeared to create a sense of distinctiveness for brand – Would communicate “change” at Cas
Slide 11: Slide 11
Slide 12: Developmental Markets
DMA Population Market Rank Anchor Stores Outlet Stores Developmental Markets Phoenix, AZ 2017.3 Columbus, OH 630.1 Grand Rapids, MI 683.5 Indianapolis, IN 589.6 Rochester, NY 392.6 San Antonio, TX 643.6 Total: 4956.7
Slide 13: Effected Change
Effected Change • Exterior store • Interior of store, visual presentation, signage, POS package • Bags • All communications – Direct mail – Email – Catalog version – Website – New Private label credit card • Associate training
Slide 14: Casual Male
CASUAL MALE
Slide 15: Before
Before
Slide 16: After
After
Slide 17: Slide 17
Slide 18: Developmental Market Results
Developmental Market Results • Increase in traffic • Increase in transactions • Higher % of sales in smaller sizes as compared to chain • Increase in comp sales
Slide 19: Recommended New Logo Rollout Zones
Recommended New Logo Rollout Zones
Slide 20: Shey
Shey Ae 4 v ID C TEE
Slide 21: Rochester Overview
Rochester Overview • Major growth for next 5 years. We will be in expanding Rochester from 24 stores to 40 more stores Rochester * 1 London, United Kingdom
Slide 22: Rochester Big & Tall
ROGHESRERSBIGISSVALE ROGHESTER = BIG &MALL=
Slide 23: Brands carried
claiborne es 5 5 = BURBERRY, CANALI —+—— HH KENNETH COLE new york Cloth by Ermenegildo Zegna Rapa fy Latren
Slide 24: Slide 24
Slide 25: Benefits to CMRG
Benefits to CMRG • Combined entities give CMRG 65% market share of specialty retail sector • Not a turn around – accretive to earnings in year one • Senior management continues with incentive contracts • Synergies will increase gross margin, reduce overhead costs (warehouse, administration, insuranc
Slide 26: Rochester Big & Tall Transaction
Rochester Big & Tall Transaction • 21 U.S. stores; 1 in London • Total revenue $65.0M • Audited EBIDTA of $3.3M • Potential for an additional 3 million dollar savings through integration – Average sales per store $2.3M vs CM $650,000 – Average transaction $400 vs CM $75 – Average store sq. footage 5
Slide 27: Slide 27
Slide 28: A suit sale advertisement
A SUIT SALE) SO BIG IT CAN ONLY HAPPEN ONCE EVERY
Slide 29: Continued accelerated growth of internet and catalog
Continued accelerated growth of internet and catalog
Slide 30: Comp Store Trend
-5.0% -2.3% -1.1% 2.4% 9.2% 4.8% 2.3% 2.0% 3.70% 2.5% 1.6% -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Comp Store Trend Stores change to lifestyle presentation Launch of George Foreman collection and TV campaign
Slide 31: Internet Sales by Month
Internet Sales by Month $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 $1,600,000 $1,800,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2002 - $3,357,447 2003 - $6,229,617 +46.1% 2004 - $9,874,481 +194.1%
Slide 32: Store Catalog Sales
Store Catalog Sales * % gains over FYE02 Catalog Sales $7,053,300 $7,283,100 $7,968,900 $8,814,100 $10,056,800 $- $2,000,000 $4,000,000 $6,000,000 $8,000,000 $10,000,000 $12,000,000
Slide 33: Multi-Channel customers
Store 2.9% 7.4% 0% 20% 40% 60% 80% 100% online catalog Catalog 46.6% 18.6% 0% 20% 40% 60% 80% 100% store online Online 51.1% 32.1% 0% 20% 40% 60% 80% 100% store catalog Multi-Channel
Slide 34: Customer Sales by Channel
Customer Sales by Channel Retail & Catalog & E-commerce Catalog & E-commerce Retail & E-commerce Retail & Catalog E-commerce Only Catalog Only Retail only * Indexed to retail only shoppers
Slide 35: Casual Male catalog and sale marketing
eis CASUAL IMALEy! a ms) sale eiaon IAL soy Srition on OD. 78 ae 205
Slide 36: Gross Margin Improvements
Gross Margin Improvements • Inventory management • Direct sourcing • Building proprietary brands
Slide 37: Gross Margin Opportunity
Gross Margin Opportunity • Core vs. seasonal/fashion – core year round basic stock items (5 pocket jean, pique polo, pocket tee, underwear, etc.) • Implementation of E3 (replenishment system) determined that we were 25% out of stocks on core items – demand exceeded supply – Better margins on core pr
Slide 38: Guaranteed In-stock Program
Guaranteed In-stock Program • 7 key items – 12% of sales • GIS Program – Bottoms 49 sizes, delivery in 5 working days or FREE • 8/21 launch • Sold 449,405 units • Units 26% increase • 4,564 units fulfilled through catalog • 9 pieces of free items given away
Slide 39: Catalog sale items
cata. ha ee008 =” 66 sale 739 sale *397° sale “16 sale *44™ Hager Bey Losec Me Jeena COTTA Zone p Seow rine nf Zone byceome room WaiecPte'® Cec cl Sante : =
Slide 40: Direct Sourcing
Direct Sourcing • Direct Sourcing of goods through Li & Fung, as agent beginning in 2006 • New Department created, hiring of industry veteran • Potential for 40% of Casual Male Inventory to go Direct • Cost saving of up to 15% • Better sourcing (reduction of # of Vendors) • Rochester has very little
Slide 41: Comfort
Comfort HARBOR BAY 626 BLUE Vintage Vintage Surplus SYNRGY
Slide 42: Casual Male catalog page
W casuatimaceyy 07s rely on the qualy and function ‘of basic items designed for your ifestyle exter Pe Pe Fautbog intent yg wth seaptham ad serene Dato ng lr ny. ew Mack ro ee este, ‘er he, cc hob ize TALL OUT Bi 1, rn Pipa $24 (5219 coche ree actor Ba Mectaek a Cemec Thcanftt 0 ton and sat Sotiaeoc
Slide 43: » eae is
» eae is ee
Slide 44: 626 Blue
626 BLUE
Slide 45: Collection will consist of Wovens, Casual Pant, and Knits
Collection will consist of Wovens, Casual Pant, and Knits Assortment will reflect items/attitude and overall look of successful contemporary brands such as George Foreman Signature, Perry Ellis, I.N.C., etc.
Slide 46: Slide 46
Slide 47: Year Goal
2 Year Goal • 4% comp annually • 100 basis point improvement annually • 100 basis point improvement in SG&A annually 2007 = 9 to 10% operating income
Slide 48: Forward-Looking Statement
Any remarks that we make today about future expectations, plans and prospects for Casual Male Retail Group, Inc. which are not historical facts, are forward-looking statements that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause the Company’s actu
Slide 49: Casual Male Retail Group contact details
Casual Male Retail Group 555 Turnpike Street Canton, MA 02021 (781) 828-9300 x 2004 jeffunger@usa.net clinsky@cmal.com
Casual Male Retail Group — Investor Presentation (January 2006) on 6ix