How DXL Figured Out the Big and Tall Market
When David Levin's company Designs acquired Casual Male out of bankruptcy in 2002, it added nearly 500 stores to its portfolio in a specialty niche where it had virtually no competition: big and tall. Still, Casual Male had previously filed for bankruptcy twice, and other players in the space were not particularly successful, either.
Levin wondered: "How could you own a space and not figure out the right model?" So Casual Male built up new stores, remodeled and ramped up PR and marketing. Even then, "we really weren't growing the business," he said. "It was very stagnant."
Then Levin started to dig deeper. While looking through data from NPD, a lightbulb went on. Men with waists in the 40-inch to 46-inch range represented 65 percent of the market, yet only represented 25 percent of Casual Male's business. "We realized that we owned the big and tall guy, but we really owned the tail of the market — the really big and tall guy." That guy had a waist of 48 inches and up. He had a good income, but wasn't a big spender on apparel.
In focus groups and in-home interviews, Casual Male started to talk to that 40-inch to 46-inch-waist guy — what the company identified as the "end-of-the-rack consumer." This consumer was highly underserved, said Levin. "He didn't really have anywhere to shop." This guy would go to a nice specialty store, but the retailer would carry very few garments in that end-of-the-rack size. So with a lot of effort, he'd piece together his attire. "Maybe he buys pants at Lands' End, a coat at Burlington. But he really couldn't find a wardrobe."
It was at that point that Casual Male decided to do something that had never been done before. "We realized that we could continue what we were doing for 10 years and be profitable but be limited in our growth potential," Levin said. "Or, we could transform ourselves into [a new company with] a new name, new real estate and new potential. That's a model that's never been done in the history of retail."
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Levin wondered: "How could you own a space and not figure out the right model?" So Casual Male built up new stores, remodeled and ramped up PR and marketing. Even then, "we really weren't growing the business," he said. "It was very stagnant."
Then Levin started to dig deeper. While looking through data from NPD, a lightbulb went on. Men with waists in the 40-inch to 46-inch range represented 65 percent of the market, yet only represented 25 percent of Casual Male's business. "We realized that we owned the big and tall guy, but we really owned the tail of the market — the really big and tall guy." That guy had a waist of 48 inches and up. He had a good income, but wasn't a big spender on apparel.
In focus groups and in-home interviews, Casual Male started to talk to that 40-inch to 46-inch-waist guy — what the company identified as the "end-of-the-rack consumer." This consumer was highly underserved, said Levin. "He didn't really have anywhere to shop." This guy would go to a nice specialty store, but the retailer would carry very few garments in that end-of-the-rack size. So with a lot of effort, he'd piece together his attire. "Maybe he buys pants at Lands' End, a coat at Burlington. But he really couldn't find a wardrobe."
It was at that point that Casual Male decided to do something that had never been done before. "We realized that we could continue what we were doing for 10 years and be profitable but be limited in our growth potential," Levin said. "Or, we could transform ourselves into [a new company with] a new name, new real estate and new potential. That's a model that's never been done in the history of retail."
Click here to read the rest of the article.