In the earnings report released yesterday, same-store sales declined just 0.3% for the quarter because of higher average tickets, even in the face of 8% lower traffic. Even so, revenues fell further than analysts had anticipated, and profits were also below expectations. In other words, the smaller crowd of customers the company could draw in liked what they saw.
In attempt to lure men back in their stores, Casual Male is ramping up its marketing initiatives and plans to boost its presence in a key area of the 42- to 44-inch waist size segment. Typically, such customers have been reluctant to come in because of the plus-sized nomenclature of Casual Male's stores. But with 65% of the big and tall market residing within in this range, targeting this segment is huge.
Casual Male has dominated the niche it has carved out for itself. It was a market that has truly been underserved by most retailers. Men's Wearhouse
By going into the "slimmer" waistlines, Casual Male is now entering an area where the customer has more options. Not only from traditional men's clothiers, but also department stores like JCPenney
At the same time, I can see the potential. I've had a few problems finding the right fit myself. Trying to match up a size 48 jacket with a 36-inch waist has resulted in my having to have a seamstress essentially resew an entire suit. Not that I fit the bill yet as a Casual Male customer, but lately I seem to be approaching the lower end of its target customer.
Management has operated in fits and starts. It acquired the Jared M. specialty retailer, then quickly abandoned the project. It rebranded its Casual Male stores to Casual Male XL but did nothing more with it. The direct sales business got the bulk of the marketing dollars, but now they've changed course and are directing it toward the stores.
The question is this: Do they have the commitment to test out this new concept long enough to have it catch on? And can investors put their trust in management to see it through?
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