Destination Xl Group, Inc. · NASDAQ:DXLG
Destination Xl — Casual Male Retail Group — Investor Presentation (June 2010)
29 slides from Destination Xl's investor presentation, Jun 29, 2010
Slide 1: Investor Presentation
Investor Presentation Exhibit 99.1 ********************
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains certain forward-looking statements concerning the Company's operations, performance, and financial condition. Such forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from
Slide 3: Company Overview
Company Overview • Largest multi-channel specialty retailer of men’s big and tall (B&T) market • Vertically integrated multi-channel model of 476 stores (47 states), direct to consumer presence in U.S., Canada and EU • Geographically and demographically diverse customer base – 2.5 million active cus
Slide 4: Attractive Big and Tall Segment
Attractive Big and Tall Segment • Annual sales of men’s B&T market is approximately $6B • B&T men account for approximately 11% of the U.S. population • Growing at almost twice the rate of the regular size men’s apparel market • B&T consumers shop 50% more for apparel on the web than regular sized c
Slide 5: Growing Obesity Trends Among U.S. Adults
Growing Obesity Trends Among U.S. Adults No Data <10% 10%–14% 15%–19% 20%–24% 25%–29% >30% (*BMI 30, or about 30 lbs overweight)
Slide 6: Company Strategic Repositioning: 2003-2009
Company Strategic Repositioning: 2003-2009 • Merchandise: built comprehensive demographic and socio- economically accessible range of product assortments and brands • Vertical Model : fully integrated stores and direct to consumer businesses into a multi-channel platform • Systems: built elaborate s
Slide 7: Rebound to Financial Health: 2009 vs. 2007
Rebound to Financial Health: 2009 vs. 2007 • Maintained operating margin after a sales decline of 15% over two years – Increased gross margin 150 bps in 2009 (from 2008) – Lowered the expense ratio 190 bps in 2009 (from 2008) – Eliminated in 2009 unproductive marketing spend and reduced marketing sp
Slide 8: Growth of Direct to Consumer Business
Growth of Direct to Consumer Business
Slide 9: Average household income
*Average household income
Slide 10: Today's Casual Male
Today’s Casual Male • Dominant market position in unique niche • Positioned across demographically diverse, loyal customer base • Efficient infrastructure to manage numerous sizes, multiple lifestyles and diverse customer base • Strong balance sheet and cash flow • Opportunity to grow long-term mark
Slide 11: Strong New Growth Opportunities
Strong New Growth Opportunities • Capture higher wallet share of existing loyal customers – Currently capture around 50% of total apparel spending of average active customer • Develop the 42”-46” business segment – Accounts for 65% of the overall men’s B&T market but only 20% of our business • Furth
Slide 12: Hybrid Stores
Hybrid Stores Test Goal: Broaden the target market and improve store-level profitability by combining Casual Male and Rochester stores in five markets Results: • Maintained high customer retention • Created attractive cross - selling environment – 50% increase from average CMXL store ticket • Dramat
Slide 13: Destination XL (DXL) Stores
• Combination of Casual Male XL, Rochester Clothing, B&T Factory Direct and Shoes XL • Average size 10,000-12,000 square feet • Concept appeals to a larger base of customers • Offers extensive selection of products in one location – Good, better, best assortment – 2,000 styles compared to 600 for an
Slide 14: DXL Storefront
DXL Storefront
Slide 15: DXL Layout
DXL Layout
Slide 16: Compelling DXL Returns
Compelling DXL Returns • Expect greater store productivity and profitability – Capture greater percentage of customer’s clothing budget – Better leveraging of expenses -- occupancy, labor productivity and local/district management • Projecting higher 4-wall profits than combined profits of individua
Slide 17: DXL Impact
DXL Impact • Consolidate metropolitan locations • Total merchandise assortment/brands increase while total inventory across market decreases – DXL to carry up to 2,000 styles compared to 600 for an average CMXL • Neutral to square footage and inventory • Lower operating occupancy costs • Incremental
Slide 18: Chicago
Chicago DXL Schaumburg, IL 0.9 miles 9451 Schaumburg, IL 9183 Niles, IL 11.4 miles 9512 Bloomingdale, IL 11.2 miles
Slide 19: DXL Timeline
DXL Timeline - Location Size Type Store Closings Opening Schaumburg, IL 11,967 Sq Ft New store location 3 stores Summer Memphis, TN 9,758 Sq Ft Convert CM XL store 2 stores Summer Houston, TX 11,027 Sq Ft Add 4,500 sq ft to existing Rochester store and convert 2 stores Summer Las Vegas, NV 13,206 Sq
Slide 20: DXL Multi-Channel Solution
DXL Multi Channel Solution www.destinationxl.com • DXL website launch first quarter 2011 • Customer is able to shop by concept, brand, lifestyle or price point in one simple, easy location
Slide 21: Long-Term Margin Growth
Long-Term Margin Growth • Long-term operating margin potential of 8%-12% – Recover $70M in lost sales as economy improves – Increase the amount spent by existing customers – Appeal to the 42”-46” waist size market segment – Grow the direct business to 30% of sales
Slide 22: Investment Highlights
Investment Highlights • Dominant niche positioning • Strong and growing market • Clean balance sheet • Positive free cash flow • Long-term market share opportunities • Accelerating financial returns
Slide 23: Financial Performance
Financial Performance
Slide 24: Sales and Gross Margin
Sales and Gross Margin (In millions)
Slide 25: Expense Management
Expense Management (In millions) (In millions) SG&A Marketing Expense
Slide 26: Free Cash Flow
Free Cash Flow Free cash flow is defined as cash flow from operating activities, less capital expenditures and discretionary store asset acquisitions .
Slide 27: Balance Sheet
Balance Sheet Projected Year End Inventory $85.0M $90.0M $98.6M $117.8M Borrowing under revolver $3.5M $38.7M $41.0M Cash on hand $10-15M Fixed term loan $3.0M $7.6M $12.5M $17.3M
Slide 28: Strong Capital Structure to Support Growth
Strong Capital Structure to Support Growth • Current $110M loan facility expires October 2011; $57.8M available at end of 2009 • Expect to be debt free in 2010 with credit availability approaching $70M • Approximately $20M free cash flow expected to be generated in 2010 to reduce indebtedness and su
Slide 29: 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 jeffunger@tmo.blackberry.net www.casualmalexl.com www.destinationxl.com
Casual Male Retail Group — Investor Presentation (June 2010) on 6ix