No longer the "Big & Tall" store, the company is looking to lure larger-sized men seeking stylish clothes across the price spectrum
Tom Maloney likes to look good and favors well-cut jeans and trendy T-shirts. The problem is, at 6-ft., 2-in. and with a newly expanded 42-in. waist, Maloney doesn't quite get the kind of variety and choice that he would like at department stores like Macy's or specialty stores like Levi's.
"I feel shut out from those stores," says Maloney, who got married last year and blames his wife's excellent cooking for his new waistline. But he doesn't have to settle for the baggy look because just under a year ago he discovered Casual Male XL, the store that caters to big guys like him. Now, he's a regular shopper at the Paramus (N.J.) location.
Maloney is clearly not alone. Casual Male Retail Group (CMRG), the company that runs both Casual Male and Rochester Clothing stores—the latter carry a range of "big and tall" formal wear and higher-end suits, including Burberry—has been on a tear lately, with 12 consecutive quarters of same-store sales increases. And now Casual Male Retail Group is betting that there are many more large men who are even more style-conscious than Maloney, and will spend big money on made-to-measure suits, pants, sweaters, and jackets.
In March, the company plans to launch Jared M., an upscale, custom-fit clothing boutique, which the company bought last year. Tailoring imported fabrics from Europe into suits that cost up to $6,000 apiece, Jared M. has built its reputation on outfitting professional athletes, many of whom are too tall for the clothes at regular stores. Most of Jared M.'s exclusive clients also spend an average of $45,000 per year on their wardrobes. "Big guys have vanity issues and definitely want to be in the forefront of fashion," says David Levin, CEO of Casual Male (see BusinessWeek.com, 1/26/06, "Men Dress for Success").
If statistics are a gauge, the 504-store Casual Male chain couldn't have been at a sweeter spot. Adult American men and women are roughly an inch taller than they were in 1960, according to a 2004 report from the U.S. Centers for Disease Control & Prevention. The average weight for men aged 20 to 74 rose dramatically from 166.3 pounds in 1960 to 191 pounds in 2002, according to the same report (see BusinessWeek.com, 3/24/06, "The Skinny on Plus Size Apparel").
No wonder Casual Male's stock has doubled in the past year, to $12.21, as of Feb. 1—even though the company hasn't managed to post a profit yet. In its fiscal third quarter ended Oct. 28, its same-store sales increased 13%, and the company narrowed its loss to $0.8 million, compared to a loss of $2.8 million last year. Sales in the quarter totaled $106.8 million, compared to $93.7 million in the same period the previous year.
But will super-sized shoppers flock in to pay big money for high fashion? Selling up-market clothing to a previously mass-market crowd is certainly not an easy strategy to pull off. The world's largest retailer, Wal-Mart (WMT), launched a trendy apparel line for women called Metro 7 with an aggressive marketing campaign last year and failed miserably.
For the launch, Wal-Mart hosted a runway show co-sponsored by Elle magazine during New York's Fashion Week, bought ads in fashion bible Vogue magazine, and plastered other women's magazines with ads. But shoppers didn't rush to buy the offerings. "[Wal-Mart's] fashion merchandise just didn't appeal to the core customer, and the desired upscale customer found the [shopping] experience left a lot to be desired," says Patricia Pao, founder of retail consultancy The Pao Principle (see BusinessWeek.com, 11/15/06, "Wal-Mart: Back to Basics").
It's no wonder that Casual Male doesn't have all its eggs in one, fashion-focused basket. In May, the company is also launching an online retailer called Thinkbig.com, which will sell outsized items such as extra-large towels and seat belt extenders to carry on a plane.
"Our customer tends to go online to look for products they need because the regular store doesn't carry them," says CEO Levin. Later in the year, the company will launch a factory-outlet store called B&T, with apparel priced 25% less than at the Casual Male store, thus catering to budget-conscious consumers at the other end of the spectrum from the exclusive Jared M. line.
Still, male shoppers aren't as addicted to shopping as women, points out Erin Fowler, a retail analyst at research firm Mintel International, so the Casual Male Retail Group might face some challenges in marketing more fashionable clothing to its expanding consumer base. "Men are less fashion-oriented, and comfort is key when it comes to men's clothing," says Fowler.
To address this issue, Casual Male relies on technology to enhance apparel for fit and comfort in its popular store brand, George Foreman (yes, the ex-boxer and grill entrepreneur). The current best-selling dress pants in all Casual Male stores nationwide are from the George Forman line, and have an elastic band stitched into extra fabric at the waist so that they stretch when the customer sits, without revealing the elastic. Many of the line's dress shirts have a top button that's also mounted on elastic to keep the wearer from feeling constricted, and its T-shirts come with a breathable special wicking fabric that not only stretches but keeps the wearer dry and comfortable.
New Name, New Shoppers
Clearly all these changes are helping Casual Male rack up sales. But the balance sheets weren't always so reflective of growing revenue. In fact as recently as 2002, the company was in bankruptcy when it was bought by Massachusetts-based apparel retailer Designs Inc., where Levin worked as a senior executive.
Since then, Levin has focused on relocating stores from undesirable locations that other retailers had deserted to more attractive and highly trafficked shopping areas. He's even micro-merchandising the stores to ensure the offerings better address a particular region's needs—fewer sweaters and coats in Florida locations, for instance.
Levin also re-branded the stores, switching the name from Casual Male Big & Tall stores to Casual Male XL in 2006. The "Big & Tall" name seems to have kept away younger males and also men who were on the cusp of normal and large. But XL seems to have worked wonders—customers as young as 16 years old are now walking in its doors, and the general number of people with waist sizes 42 and 44 has also increased substantially.
Maloney, the New Jersey shopper certainly wouldn't have walked in had the name been Big & Tall. "It sounds like a fat-man store, and I don't consider myself fat," he says as he sizes up a pair of jeans.