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CANTON, MA-As Casual Male Retail Group Inc. continues its expansion into new niches of the men’s big-and-tall market, total sales inched ahead 2.2% during second quarter. Earnings, however, fell from $3.4 million in the same quarter a year ago to just shy of $2.5 million for this year’s second quarter.<p.Comp store sales rose 3.9%. While that represents the locally based company's 15th consecutive quarter of comp-store sales increases and comes on top of a better-than-10% increase for second quarter 2006, David Levin, president and CEO, acknowledged during a conference call that it was below expectations.

The culprit, he said, was low traffic in July, due primarily to a shift in the back-to-school calendar, including a move of tax-free shopping days from July to August in some states, particularly Florida. He said Casual Male’s experience was consistent with reports by other retailers.

The company is now in businesses that did not exit a year ago, Levin noted. They are a made-to-measure suit business aimed at the higher end of the market, B&T Factory Direct aimed at the lower-end customer, Jared M sportswear, the Living XL non-apparel products, and Shoes XL.

Both Living XL and Shoes XL are marketed primarily via catalog and are doing better than expected, Levin reported. A 36-page Shoes XL catalog with 570 designs in big, wide sizes, will be mailed this September. “We see it as one of our strongest growth areas for the future,” he said and also noted that these category expansions carry little additional overhead.

That is not so of Jared M, a private label sportswear brand the company acquired, and the made-to-measure initiative. Of the latter, he said, “we don’t want to rush it. We want to do it right.” Of Jared M, he said, “we’ve developed new higher-end private label sportswear for our Rochester XL stores. We’re still confident we’ve got a pretty good plan.”

The company’s gross margins improved during the second quarter, due primarily to an increase in private label merchandise and “higher sell-thru at full price,” Levin said. A loyalty program, launched in October 2006, now has 1.2 million members, with the addition of 100,000 in June alone. These customers, according to Levin, “spend 20% more net compared to others.”

New Casual Male XL stores are planned, although he declined to identify new locations or put a number on openings. “Ideally, we’d like to open 15 to 20 next year,” he said, versus five or fewer a year over the past several years.

The company, which operates throughout the US and in Canada and London, claims to be the largest retailer of big-and-tall men’s apparel. There are currently 473 Casual Male XL retail and outlet units, 25 Rochester Big & Tall Stores, and five Casual Male at Sears-Canada stores along with direct sales from several catalog and eCommerce websites.

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