Destination Xl Group, Inc. · NASDAQ:DXLG
Destination Xl — KeyBanc Consumer Conference 2013
33 slides from Destination Xl's conference presentation, Feb 28, 2013
Slide 1: KeyBanc Consumer Conference
Keybanc Consumer Conference February 28, 2013 Generating Value on the Road to Destination XL ® Exhibit 99.1
Slide 2: 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 of forward-
Slide 3: Who is Destination XL Group, Inc.?
Who is Destination XL Group, Inc.? 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: DXLG by the Numbers
DXLG by the Numbers Active customers Enrolled in loyalty program Highest rated retailer in 2011 CSI Customer Survey Retail Direct Retail Stores Customer Satisfaction 80% 20% 1.5M 90% 85%
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: Our Current Casual Male XL Stores
Our Current Casual Male XL Stores
Slide 7: 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 8: Responding with Destination XL
Opened 4 DXL concept stores Opened 32 DXL stores Opened 12 DXL stores Opportunity for accelerated growth and profitability Expect to Open ~60 DXL stores Responding with Destination XL ®
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Slide 14: Large Selection of Name Brands
Large Selection of Name Brands
Slide 15: Casual Male XL vs. Destination XL
Average Store size 3,400 sq. ft. 8,400 sq. ft. Sales per sq. ft. $166 $147 ($230 by 2016) Build out costs $50 $70 Occupancy costs $30 $30 Dollars per transaction $97 $137 Style choices 2,000 Private label brands Name brands Casual Male XL vs. Destination XL ®
Slide 16: Market Consolidation to DXL
9451 Schaumburg, IL 9183 Niles, IL 11.4 miles 9512 Bloomingdale, IL 11.2 miles Market Consolidation to DXL Chicago Metro Chicago Metro DXL Schaumburg, IL 0.9 miles Customers are willing to drive up to 20 miles
Slide 17: DXL Comps Reflect Growth Opportunity
DXL Comps Reflect Growth Opportunity *Total DXLG Comparables consist of all stores, including DXL stores and direct channel 14.5% .0% 12.8 % 16.3% 17.1% 13.8% 15.0% 15.8% 0.7% 0.8% 2.1% 2.0% 2.0% 1.5% 0.5% 1.5% 0.0% 5.0% 10.0% 15.0% 20.0% Q3 2011 Q4 2011 FY 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 FY 20
Slide 18: Compelling DXL Returns
Compelling DXL Returns Expect greater store productivity and profitability 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 Potenti
Slide 19: Accelerated DXL Openings
Accelerated DXL Openings Accelerated rollout based on success of DXL stores in 2011 2015 Store Count Target Destination XL ® Casual Male XL Outlet Rochester Clothing 215-230 ~65 Total Stores: (460) (450) (412) (348-358) (308-318) (283-298)
Slide 20: DXL Sales Increase as % of Total Revenue
DXL Sales Increase as % of Total Revenue * DXL sales include direct sales via the DestinationXL.com website. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 1% 4% 30% 49% 79% 84% 89%
Slide 21: Accelerated Rollout of DXL
Opened 32 DXL stores / Closed 70 stores Operating margins were approximately 3.5% CapEx was $32.4M Accelerated Rollout of DXL
Slide 22: Accelerated Rollout of DXL
Open 57-64 DXL stores / Close 110-119 stores Sales of $415 - $420M Expected borrowing level of $10 - $15M at year end Commence new marketing strategy with incremental $10M spend Lease exit and asset impairment charges in the range of $3 - $4M * Operating margins of ~ breakeven to 0.5% CapEx expected
Slide 23: Accelerated Rollout of DXL
Complete rollout with - opened DXL stores and Closure of remaining Casual Male XL anchor stores Annual sales growth of ~10% – 15% Operating margins gain traction and increase to ~8% (from 4.2% in ‘11) Expected ending cash balance of $5 - $10M CapEx expected to be approximately $38M Lease exit and as
Slide 24: Full benefit of DXL concept drives revenue >$600M
Full benefit of DXL concept drives revenue >$600M Open average of 10 DXL stores per year Operating margins >10% Generating free cash flow in the range of $60 - $70M Accelerated Rollout of DXL
Slide 25: Increased Awareness = Opportunity
Increased Awareness = Opportunity 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
Slide 26: Grow direct business with new website
Grow direct business with new website Paradigm shift in marketing improves awareness Target “end-of-rack” customers Capture greater wallet share with DXL concept Opportunity to Grow Market Share Addressable Market = 40M Customers 1.5M Currently Active Customers Goal = Grow Customers by 40% Over 3 Ye
Slide 27: Destination XL Marketing Campaign
Destination XL ® Marketing Campaign Launched test campaign in 5 markets: Memphis, Minneapolis, Denver, Atlanta and Oklahoma City Increased awareness by 100% in new markets & 38% in established markets “End-of-rack” customer base grew by 38% Built Stronger Brand to Attract and Serve Customers Results
Slide 28: Established Effective Marketing Mix
Established Effective Marketing Mix 6-Week Test Demonstrated TV, Radio and Digital is Most Effective Marketing Combination 15% sales 24% traffic 64% new customer purchases 84% web traffic 7% web sales 38% market awareness Established Market Memphis DXL Opened in 2010
Slide 29: DXL Test TV Commercial
DXL Test TV Commercial Marketing to Customers in “No Man’s Land”
Slide 30: Increase marketing spend as percent of sales from 4.5% to 6.5%
• Increase marketing spend as percent of sales from 4.5% to 6.5% • Launch strong national marketing campaign in spring 2013 Proposed 2013 Marketing Spend $M Total 50% Increase YOY to Drive DXL Awareness DXL Media Direct Digital Visual Loyalty Other
Slide 31: Q4 2012 Preliminary Results
Q4 2012 Preliminary Results • Comparable sales increased ~0.5% and total sales were ~$114.9M • Full year comparable sales increased ~1.5% and total sales were ~$399.6M • Q4 comparable sales for DXL were up ~15%, while comparable sales for Casual Male XL stores decreased ~2.3% • DXL stores represente
Slide 32: Why Invest in DXLG?
Why Invest in DXLG? Accelerated conversion to DXL concept creates compelling investment opportunity Leader in large and growing B&T market Three-year $150M investment in DXL rollout to be funded primarily by free cash flow, including use of $47 million in tax benefits Strong gross margins; Ability t
Slide 33: For additional information:
For additional information: Jeffrey Unger Destination XL Group, Inc. V. P. Investor Relations 561-482-9715 Office 561-543-9806 Cell jeffunger@usa.net www.destinationxl.com
Destination XL Group — KeyBanc Consumer Conference 2013 on 6ix