DXL to close remaining Rochester stores; new CEO starts April 1

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DXL to close remaining Rochester stores; new CEO starts April 1

By Marianne Wilson - 03/22/2019
Men’s big and tall apparel retailer DXL on Friday reported a higher loss in its fourth quarter even as its same-store sales topped the Street.

The company also said that Harvey Kanter will take the reins as CEO on April 1, at which time he will also join the board. Kanter, who joined DXL as an advisor in February, is the former CEO of digitally native jeweler Blue Nile. At DXL, he will succeed longtime CEO and president David Levin, who retired Dec. 31, 2018, at which time he took on the role of acting CEO.

“Harvey has a distinguished track record of developing consumer-centric brands and growing their revenue and profitability,” said Levin. “Our management team has already begun to engage with Harvey as we begin charting the next phase of DXL growth.

DXL also reported that it will close its five remaining Rochester Clothing stores in fiscal 2019. DXL acquired the upscale brand in 2014. Most of Rochester’s merchandise will continue to be available on dxl.com, and many Rochester brands are carried in DXL stores, the company noted.

“The growth in our DXL brand has slowly eroded the sales volume and profitability in our remaining Rochester stores, which are predominately located in high-rent, metropolitan areas,” Levin said.

Also in 2019, the company will continue to convert its remaining Casual Male stores to the DX banner. It will rebrand 13 of the remaining 95 Casual Male locations in 2019, with a total 60 to be converted during the next several years.

The retailer reported that its net losses totaled $7.2 million in the quarter ended, compared to $3.3 million in the year-ago period. On an adjusted basis, net loss for the quarter was $600,000, as compared to an adjusted net loss of $2.7 million in the prior-year quarter.

Total sales fell 3.2% to $131.2 million for the quarter, which had one less week than the prior year ago period. Same-store sales rose 3.1%, the chain’s fifth consecutive quarter of positive growth.

The fourth quarter marked a major strategic shift for DXL as it officially launched a wholesale division.

“DXL is the industry expert in men’s big and tall apparel,” said Levin. “Wholesale allows us to leverage that expertise and offer a turn-key solution to other retailers who cater to the big and tall customer.”

For the full year, total sales were $473.8 million as compared to $468.0 million for the 53-week prior year. Same-store sales rose 3%. Net loss for the year was $13.5 million as compared to a loss of $18.8 million in the prior year.

“Fiscal 2018 was a pivotal year for our company and we believe our core business is well positioned for continued growth in fiscal 2019,” said Levin. “We completed a customer segmentation study that has provided better insights to focus our marketing strategies. We launched a new website that is faster, more responsive, and easier to navigate. We initiated a corporate reorganization that has lowered our SG&A expense, and we refinanced our credit facility with an extension through the middle of 2023.”

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