Casual Male Portfolio Under Review

The Canton, MA-based Casual Male doesn't need to abandon strip shopping centers, but it does need to look at whether or not traffic has been diverted to a newer development within a respective submarket, Sid Newman, senior vice president for the Fort Worth-based Buxton's CustomerID product, tells GSR. "They're going to be more selective in where they put their locations," he says, keeping key demographical information confidential due to the proprietary nature of the business relationship with a retailer that's undergone a transition from a traditional men's apparel store into "big and tall" specialty shops and is now ready to expand the lineup. Casual Male's top execs have been working toward the specialty expansion since they bought the chain out of bankruptcy in May 2002.

Buxton was quietly hired two months ago to come up with an expansion model for the best locations, customer profile and projected store-by-store sales run for the Casual Male chain. "It's going to help them look at real estate differently than they looked at it in the past," Newman stresses. According to Buxton's calculations, the big and tall market is a $5.5-billion to $6-billion industry, but it's fragmented.

The portfolio contains 493 Casual Male Big & Tall stores in the US and London, 22 Rochester Big & Tall shops in California and 13 Sears-Canada stores within a store. This year's plan calls for opening 10 Casual Male and two or three Rochester stores. The Sears-Canada count will remain the same, according to the chain's corporate chiefs. Next year, though, the spotlight will be pointed on Rochester's expansion, a San Francisco-based chain bought in November 2004 at an all-in cost of $20 million as Casual Male sold non-core units like 32 Levi's/Dockers outlets to establish itself as the dominant player in the big and tall field.

The Casual Male portfolio hovers 1.9 million sf, including about 20,000 sf in the Sears-Canada locations. This year's expansion should add another 35,000 sf to the bottom line. Meanwhile, another 50 stores will be remodeled to get the chain on pace with a program to upgrade stores every five years.

In a recent earnings call, David A. Levin, Casual Male's president, says the Buxton model identified 100 locations in the US as prime candidates for Casual Male stores. Previously, the main tool used to scout locations was population, but Buxton proved that's not always the best driver, he says. The chain's customers make $71,000 on average per year, a fact from Buxton's initial business assessment that surprised the retailer, who thought it was significantly less, according to Levin.

The Buxton research also has uncovered some locations that are performing 25% to 30% under the company's expectations, Levin says. "We will relocate as needed," he adds.

But, growth isn't going to be all bricks and mortar. A new marketing chief, who hails from Talbot's and Bass Pro, has started his second month on the job plus the chain's cornered 12 pages in the Sears spring preview catalog that comes out in the fall. Internet sales, which rose 62% last year, round out the multi-channel growth strategy.