Destination XL Group Names Board Member John Kyees as Interim CFO -- Expands
Board with Election of Will Mesdag as Director -- Provides Update to Fiscal
2013 Financial Guidance
CANTON, Mass., Jan. 31, 2014
CANTON, Mass., Jan. 31, 2014 /PRNewswire/ -- Destination XL Group, Inc.
(NASDAQ: DXLG), the largest multi-channel specialty retailer of big & tall
men's apparel and accessories, today announced the resignation of its
Executive Vice President, Chief Operating and Chief Financial Officer, Dennis
Hernreich, and the appointment of Board Member John E. Kyees as Interim Chief
Financial Officer. In addition, the Company announced that it has elected Will
Mesdag, 60, to its Board of Directors. Destination XL also provided updated
guidance for the fiscal year ending February 1, 2014 ("fiscal 2013").
"We would like to thank Dennis for his many contributions to the Company
during his 13 years of service, and we wish him well in his future endeavors,"
said Destination XL President and CEO David Levin. Hernreich stated, "I have
valued my long tenure at the Company and my executive role in successfully
implementing Destination XL's new-concept branding strategy. With the
transformation well under way, I now desire to pursue new challenges and
opportunities. I wish the Company continued success."
Kyees, who has served on the Destination XL Board of Directors since 2010, was
CFO of Urban Outfitters from 2003 until his retirement in 2010, and has served
as a senior financial executive at several other prominent retailers. The
Company is conducting a search for a permanent CFO.
Will Mesdag Elected to Board of Directors
Will Mesdag's election to the Destination XL Board of Directors expands the
size of the Board to 10 members. Mesdag will serve as a director until the
Company's next annual meeting of stockholders, at which time he will stand for
re-election. Mesdag is currently the Managing Partner of Red Mountain Capital
Partners LLC, a Los Angeles, California-based investment advisory firm. Red
Mountain is Destination XL Group's largest shareholder and owns approximately
9.5% of shares outstanding.
"We are delighted to welcome Will to our Board and look forward to his
contributions and insight as a representative of our largest shareholder,"
said Seymour Holtzman, Chairman of the Board of Directors. "Since becoming a
shareholder, Will has been a strong supporter of our efforts to roll out the
DXL concept. His deep experience in the capital markets and strong financial
acumen, as well as his wealth of experience serving as a director for several
public companies, will be valuable assets to the Company as we execute on our
strategy to profitably grow the business and enhance shareholder value."
"I am pleased to be elected to the Board of Destination XL Group, Inc.," said
Mesdag. "I have had the opportunity to meet all of the other directors and I
am impressed with their relevant experience, as well as their vision and
dedication. I am looking forward to working with the Board as the Company
rolls out its new DXL concept. I have complete confidence in David Levin to
execute the Company's strategy, and am delighted that John Kyees will step
into the role of Interim Chief Financial Officer."
Mesdag is the Managing Partner of Red Mountain Capital Partners LLC, the
investment adviser for Red Mountain Partners, L.P. The Los Angeles-based fund
invests in small cap public companies, and adds value through its constructive
engagement with management teams and boards.
Prior to founding Red Mountain in 2005, Mesdag spent 21 years with Goldman
Sachs. He became a general partner of the firm in 1990 and worked in New
York, London, Frankfurt and Los Angeles in the fixed income and investment
banking divisions. Prior to Goldman Sachs, he was a securities lawyer with
Ballard, Spahr, Andrews & Ingersoll in Philadelphia. He received his B.A.
from Northwestern University in 1974 and his J.D. from the Cornell Law School
Mesdag serves on the boards of Encore Capital Group and Nature's Sunshine
Products. He has previously served on the boards of Cost Plus, 3i Group plc,
and Skandia Group AB.
Fiscal 2013 Guidance Update
"In line with much of the retail industry, which faced challenges in the
fourth quarter, particularly in the holiday selling season, our December sales
results fell below our expectations," said David Levin, President and Chief
Executive Officer. "During the key selling weeks between Black Friday and
Christmas, store traffic was down approximately 4% from the prior year as a
result of weather in some geographies, as well as continued sluggish consumer
buying behavior. This decrease in traffic, disproportionately impacted by the
fact that the 2013 holiday season was shorter by six days compared with 2012,
negatively affected Q4 sales causing us to reduce earnings expectations for
The Company expects earnings per share for fiscal 2013 to be a net loss in the
range of $(0.11) to $(0.13) per share compared with previous guidance of a net
loss of $(0.05) per share. The guidance excludes severance and
post-employment benefits charges. Sales for fiscal 2013 are expected to
approximate $388.0 million, compared with the Company's previous guidance of
For the fourth quarter and fiscal year 2013, comparable sales for the Company
are expected to increase approximately 3.9% and 2.9%, respectively, from the
prior-year period. The increase in comparable sales for fiscal 2013 was
previously expected to be approximately 5.0%. Sales for the Company's 95
comparable Destination XL ("DXL") stores are expected to increase 15.2% for
the fourth quarter and 19.1% for fiscal year 2013. For the 48 DXL stores
opened greater than a year, comparable sales are expected to increase 13.9%
and 12.4% for the fourth quarter and fiscal year 2013, respectively. The
positive DXL comps are driven by an approximate 18.5% and 19.2% increase in
dollars per transaction for the fourth quarter and fiscal year 2013,
respectively. While the Company's fall marketing campaign did increase
traffic by nearly 10% during the seven week campaign, this level of traffic
did not continue into the holiday selling season as it did with the spring
marketing campaign. The Direct business demonstrated improvement from the
fourth quarter of fiscal 2012 and sequential third quarter of fiscal 2013,
primarily driven by Internet sales. Sales from the direct business are
expected to increase 1.2% for the fourth quarter of fiscal 2013, with an
approximate decrease of 4.4% for fiscal 2013.
The Company plans to report its fourth quarter and fiscal 2013 financial
results on March 14, 2014. Management also will conduct its quarterly
conference call to discuss its results for fiscal 2013, as well as its fiscal
2014 outlook, that morning at 9:00 a.m. ET. During the conference call, the
Company may discuss and answer questions concerning business and financial
developments and trends. The Company's responses to questions, as well as
other matters discussed during the conference call, may contain or constitute
information that has not been disclosed previously.
To listen to the live webcast, visit the "Investor Relations" section of the
Company's website. The live call also can be accessed by dialing: (888)
505-4369. Please reference conference ID: 5302522. An archived version of the
webcast will be available on the "Events" section of the Company's website for
up to one year.
About Destination XL Group, Inc.
Destination XL Group, Inc. is the largest multi-channel specialty retailer of
big & tall men's apparel with operations throughout the United States, Canada
and in London, England. The retailer operates under six brands: Destination
XL®, Casual Male XL, Rochester Clothing, B&T Factory Direct, ShoesXL and
LivingXL. Several e-commerce sites, including www.destinationxl.com, and
brand mailers make up the Company's direct-to-consumer business. With more
than 2,000 private label and name-brand styles to choose from, customers are
provided with a unique blend of wardrobe solutions not available at
traditional retailers. The Company is headquartered in Canton, Massachusetts.
For more information, please visit the Company's investor relations website:
Certain information contained in this press release, including sales, earnings
and other financial expectations for fiscal 2013, constitute forward-looking
statements under the federal securities laws. The discussion of
forward-looking information requires management of the Company to make certain
estimates and assumptions regarding the Company's strategic direction and the
effect of such plans on the Company's financial results. The Company's actual
results and the implementation of its plans and operations may differ
materially from forward-looking statements made by the Company. The Company
encourages readers of forward-looking information concerning the Company to
refer to its prior filings with the Securities and Exchange Commission,
including without limitation, its Annual Report on Form 10-K filed on March
15, 2013, that set forth certain risks and uncertainties that may have an
impact on future results and direction of the Company.
Forward-looking statements contained in this press release speak only as of
the date of this release. Subsequent events or circumstances occurring after
such date may render these statements incomplete or out of date. The Company
undertakes no obligation and expressly disclaims any duty to update such
SOURCE Destination XL Group, Inc.
Contact: Jeff Unger, Vice President Investor Relations, (561) 482-9715
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