The big and tall man's shopping experience has never been an easy one, but Destination XL (DXL) is in the process of changing that. Its parent company is in the midst of a transformation to change its format and bring everything from value-priced private labels to high-end designer brands to big and tall men in an array of sizes and styles.
Destination XL is part of the Destination XL Group Inc., the largest multi-channel specialty retailer of big and tall men's apparel. It currently operates Destination XL, Casual Male XL, Casual Male XL Outlets, Rochester Clothing, B&T Factory Direct, Shoes XL and Living XL retail locations. The company also has a direct-to-consumer business through catalogs and e-commerce sites. However, it is in the middle of an effort to convert around 480 Casual Male XL, Casual Male XL Outlets and Rochester Clothing locations into more than 230 Destination XL stores.
“The new format encompasses most of the businesses that we own,” Senior Vice President of Real Estate and Store Development Peter Schmitz says. “Destination XL will have anywhere from 20 to 40 percent of the space offering product found in Rochester stores, and the balance of the inventory will be Casual Male XL private-label product, shoes and accessories.”
This new concept is designed to allow Destination XL to become a one-stop shop for big and tall men’s apparel. The process of converting its stores started about two years ago with five hybrid stores that combined the Rochester Clothing and Casual Male XL experience under one roof. One of the major changes involved reorganizing the setup of locations so they were broken down by lifestyle rather than by brand.
“That is a bit of a departure from our traditional setup,” Schmitz says. “Once we saw that the new concept had the capability to draw in customers, we decided to create a whole new model and used outside firms to help us come up with new design and branding elements that we are now rolling out around the country.”
The company’s desire to devise a new format came about because neither Casual Male XL nor Rochester Clothing locations were showing measurable growth opportunity. The company decided to use five existing Rochester Clothing stores that had Casual Male stores located nearby and combine them into a single store. The results were impressive, as the company saw that it could maintain the higher-end Rochester Clothing customers while also successfully retaining the Casual Male customers with an expanded assortment leading to a greater dollar per transaction (DPT) with an improved average unit retail (AUR).
“We realized we could save the cost of running separate units and drive everyone into a single store and gain the metric traction with a better selling model,” Schmitz says. “This store type proved more profitable, which is why we decided to go with the new branding initiative company-wide.”
The first four Destination XL stores opened in 2010, followed by 12 more in 2011 and 33 in 2012. In 2013, the company plans to open more than 55 Destination XL stores this year so that its total will exceed 100 by the beginning of 2014. About 50 to 60 more Destination XL stores will roll out during both 2014 and 2015.
“By that time, we should have replaced all Casual Male stores with Destination XL locations,” Schmitz says. “Then we will look to backfill existing markets and enter new markets, looking for organic growth. The conversion of the company to DXL is our sole focus now, in both our brick and mortar format as well as our direct-to-consumer businesses.”
Among the amenities that Destination XL believes will drive big and tall men to its doors are its new merchandising presentation and an enhanced focus on customer service. The company has placed a great deal of emphasis on offering size, selection, color and quality options that are unmatched, while also making sure that its sales staff is more educated and experienced.
“We carry some of the most recognized branded product, so our customers can buy the highest-quality fashions in sizes that they may have had trouble finding,” Schmitz says. “The presentation and open format of the stores enhances the shopping experience. All Destination XL stores also have an onsite tailor. Those are the key elements to the new format.”
Destination XL is investing a great deal into spreading the word about the new format. The company brought in a new chief marketing officer late last year to devise ways to drive more traffic to stores and increase customer retention. In May, the company began a national marketing campaign. It emphasizes the difficulty big and tall men have when it comes to finding the right merchandise for them, and illustrates that Destination XL is the one-stop shop they have been looking for.
“We anticipate that the marketing campaign will grow traffic in the stores, and we feel the expanded product offering will allow the stores to sell themselves once people visit them,” Schmitz says.
One disadvantage to this process is the fact that every time the company opens a Destination XL, it closes two nearby Casual Male stores. That means the new location may be further away for some customers. But Destination XL believes it is offering a good reason for customers to travel a little more through a better breadth of selection.
“We look at the performance history of our hybrids and past stores to help us find the right metro areas to target so we can find the right locations,” Schmitz says. “We want to avoid discouraging customers from visiting us after we shut down older stores. As we go, we will figure out where we may have to backfill some markets.”
So far, Destination XL is thrilled with the results of its transformation. The company believes in its new format, and it feels that customers won’t want to go anywhere else once they’ve experienced what Destination XL has to offer.
“This is a concept that our people have pushed hard for and put money toward,” Schmitz says. “We’ve looked at our future and believe that Destination XL offers a better presentation and a better upside for our company.”