Destination XL Group reports Q4 loss of $3.3 million; announces CEO’s departure

By

Robin Driver

Published
Mar 23, 2018

Canton, Massachusetts-based specialty menswear retailer Destination XL Group, Inc. reported widening losses in the fourth quarter and full year 2017 on Friday, and also announced the retirement of CEO David Levin.

 
The company’s net loss in Q4 came to $3.3 million, compared to a net income of $1.8 million in the prior year period. Net loss for the full year 2017 totaled $18.8 million, compared to a $2.3 million loss in 2016.
 
Sales for the periods, however, actually increased, benefiting partly from fiscal 2017’s extra 53rd week. Net sales in the 14-week period ended February 3, 2018, for example, were up 10.5% to $135.5 million, compared to the $122.6 of sales reported in the 13-week fourth quarter ended January 28, 2017. Comps calculated on a comparable 14-week basis also saw an increase of 4.3%.

2017 sales rose 3.9% to $468.0 million from $450.3 million in 2016, while comps on a 53-week comparable basis increased 0.9%.
 
“We ended the quarter with a very strong comp of 4.3% and we are off to a good start in fiscal 2018,” commented Destination XL President and CEO David Levin. “However, earnings were down for the quarter, reflecting increased marketing expense.  We now have a store presence in every major market in the continental US and a direct business which increased to 21% of our total sales in fiscal 2017.”
 
Destination XL Group currently operates 342 stores in the US under the DXL and CMXL retail and outlet concepts, as well as the Rochester Clothing banner, down from 343 at end of 2016. The company plans to open three stores this year.
 
For 2018, sales are predicted to total between $462.0 million and $472.0 million, with a comparable sales increase of approximately 1.0% to 3.0%. The company currently expects its net loss for the year to be somewhere from $8.3 to $14.3 million.
 
Two executive changes have also been announced at the company: while former Timberland global marketing VP Jim Davey has been appointed as chief marketing officer, it was revealed that David Levin will be stepping down from his roles as president, CEO and director of Destination XL Group before the end of 2018.
 
“It has been an honor to lead this great company over the last 18 years, and I am extremely proud that we have successfully transformed the company from a dated brick-and-mortar and catalog business into a fresh and dynamic omni-channel retailer serving XL guys around the world,” stated Levin. “I want to thank our Board of Directors for supporting me and my management team throughout this transformation and for having the vision to invest in our dream.”
 
Seymour Holtzman, executive chairman of the Board thanked Levin for his contribution to the company, adding “Under David's leadership, DXL has evolved into a lifestyle brand widely recognized for big and tall guys everywhere and is the leading specialty apparel retailer in the sector.  Our leadership team has never been stronger and we look forward to a seamless CEO transition.”
 
Heidrick & Struggles International, Inc. has been enlisted to lead the search for Levin’s successor and will review applications from both internal and external candidates.

Levin has stated that he would be prepared to provide transition support following his retirement, if necessary.