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Destination XL (DXLG)

Participants
Nitza McKee ICR
Harvey Kanter President and Chief Executive Officer
Peter Stratton Chief Financial Officer
Eric Beder SCC Research
Alex Silverman AWM Investments
Call transcript
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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Second Quarter 2020 Destination XL Group, Incorporated Earnings Call. At this time, all participants are in a listen-only mode. [Operator Instructions] I would now like to hand the conference over to your speaker Nitza McKee at ICR. Please go ahead.

Nitza McKee

Thank you and good morning, everyone. us call. XL joining fiscal second for earnings XXXX you on Group's Destination quarter Thank call is Peter our and On today our Harvey Executive Chief Kanter; Officer, Financial Officer, Stratton. President and Chief

website forward-looking certain COVID-XX contains concerning also discuss business discussion explanation is pandemic, Today's measures. During today's mentioned efforts is with due with to restructure the in and information our and the shopping such company. now its risk Information company's to ability are differ including uncertainties call over company's would was uncertainties the for our of and XXXX affect turn available Harvey of liquidity cause working our to to materially about Exchange meet customers filed withstand the and its pandemic to a Harvey? non-GAAP statements to actual assumptions that months. from market regarding forward-looking and to to manage and Relations that fiscal CEO, XX today encourage of to factors filings Commission. and sufficient maintain Kanter. performance. risks refer the the release, provide on the its through reduce like useful Securities the I results detailed online Please to and some its variety at financial inventory, to to now various next Such earnings call, our results needs and capital to an could costs, in-store those the subject impact statements investors metrics this in on manage reconciliation investor.dxl.com will for we which morning Investor and

Harvey Kanter

times call hope to us healthy, Thank for everyone are morning challenging all. These well. on good all you, are today. very Nitza, I the safe, and you and

retired Kyees, for today's from our for unparalleled Ward to John their team, COVID-XX to Earlier Before for business, Chair, our also like wellness. All directors most some quarter wish would I pandemic for support personal success like to These to I long are is three and and Board past this our to out a different month, and a Holtzman of We level I with a heartfelt and of focus shout to start results, three today's appreciated. and I comments acknowledgement. who life, fiercely on the want former best support during operate who at brief with you an these standing and these to same of our battle the call extend our to have folks second the Seymour continue folks share in want on gone times associates board. are difficult in big times. their during taking during perseverance, challenges. recent in quick them Mooney all all Their else business nothing the us service greatly continued but directors ways, our our the give passion forever. and everything that over the the are are contributed years. their thank unprecedented

the me of These culture the at team one our DC that here to not more is so keep we of corporate created teams are have at proud the the up office there night, stores We them. we call incredibly DXL. and and and that things are have center from days, but

topics. two people other future optimism to important who of are great open with DXL. the our of have We Also backbone want continued the for

addressing call brand. program months, issues, normalizing last has efforts heightened our further across the a and part our XXXX, the which council to team these In implemented but First, social DXL and awareness part this In few unrest of in to we we conversation, committed regard ongoing to the the new racial challenges to of remain us own form solution. combat a continued just and led of not reimbursed training be unconscious divide. our the a bias organization address in our the

heard to unique low joined have larger who led DXL shift to at contribute at Time turnout them process lift in business we to commitment a our we the time democratic the traditionally representation. to This participation time have companies voter consortium to by between led the elections. on paid push every are their of voting. those we choose vote by to work are not needed off to voice a Workers to and making vote. nation's vote voter our a country's polls is get scheduled they [indiscernible] their will options. to vote using and a if have movement business increase supporting associate non-partisan in Second, American community paycheck to is in to to earning encouraging DXL and give shouldn't cultural elect We're mail are the

address we of last today's for we've balancing a three has the and the discuss been days intend will act. call, well have to I what we in defined done finally, review thoughtful executed of as what topics: cover year. the first, I as over imperatives business, the industry; second, the as pragmatic fall the have Now, days; season critical into our as state state main Everything to and accomplished XX past the to next XX win and over current

regimented. disciplines retail Our well are operational

to foundation also a executed we viability retail discipline. long-term outcomes, this believe against company. of been have a We we the made this current solid our driven and Every and decision we have protecting have developed built while on anchored plan driving has

relentless. Our cash been has focus on

team, to are we the ability. ensure to managing and details breathing are cash, and our incredible attention smallest management to living liquidity, we the a our with of As our our best credit

it As February, action order the to know, cash. work inventory in down took swift work to you to throughout second cancel late inventory and on to we quarter existing convert

the the quarter cash our value our focus to with reality high promotionally, greater customer liquidity. even country, base unemployment cold started for the at be management need the primary a we and to Uber continuing to Given across enhance of

extended our leasing receipts with with to community, strengthen transparent payment suppliers. and successfully also challenges merchandise securing communicative extremely community. We've been our communicate vendor landlord within partnerships our for been the our have with our vendor and terms active very We

our aligned and We have both first we're as you grateful have with to people to reduction employer are to lower It response XXX easier than made to difficult second they the flow. challenges of primarily us corporate struggle come for the praise that our no short-term future. in action quarter and which our we're most the them experiencing very extend we associates. addition the to difficulties to of accommodations for pandemic. that foreseeable in the the right and all we of the In in have stores. initiate want levels to decision This the the is landlords to approximately a and employees, are continue to The I important day. store or landlords. traffic our expect listening of every traffic, completed and heartfelt through a choice related an and which open for was primarily make cash force want sizing company rosters is for assist by managing to and quarter, been In regards, to COVID-XX with work thank us been presented levels we utmost a to all of This reduction the current to we we lower for vendors is have in been in willing

viability. the trade-offs. do be of everything company doing can to It is are culture to sometimes would place until irrefutable best our that many our in which are are circumstances and control long-term we a we thing. to difficult We as right we are do furlough can not proud. these me staff our we at we forced path to employees very knew building to lightly decisions to make do our could any not and take our the on We they important result associates it Unfortunately, initially protect decisions and longer. We achieve

serves omni-channel tall retailer the customers and We are big only who comprehensively.

we great both offer direct-to-consumer do that but e-commerce our robust clear available brick-and-mortar shift is both and of site private is only consumer’s designer leveraged brands footprint. merchandise, and a Not we offer to our digital and something have shopping on label Our throughout him assortment online the immeasurably. platform

our more of customers leaned have venture are some reluctant e-commerce from and into BOPUS. As even BOPAC stores, we shopping to contact now free to into

so with us. We [fight every that we to chooses difficult decisions will for] wherever shop his to customer he can continue expectations exceed make continue to these and

current an as where for state Now on well as in are of the business, we the the industry. update

grew dxl.com important most our quarter. our the anchored current moment, Let me rapidly of by channel, and start digital, direct most throughout with at second sales the all business

in website quarter. e-commerce the Our XX% grew second

sales fulfilled includes online from only universe traffic but marketplaces that and our to technology. Lack online not via of prior channel well universe dxl.com, sales you store sales drove not the also stores the particular below direct extensions trained on initiatives product in Our that that levels. may available as offer year available to as sales associates recall originate likely Universe in-store our website. that are be are in-store

traffic, Today, a area in contrast, to that during terms higher functionality momentum BOPAC, have buy second XXX be continue is user to hard. curb experience. hit fulfillment the and and locations. BOPUS continue pick of both our been by in-store we and offer In universe sales BOPAC this up an materially Given stores online and drivers in the remains BOPUS store and decline quarter. direct we develop will

to as months to customer look over increased penetration approach look optimize and elevate experience, will we a these loyalty. coming shopper the and experiences driving test while We learn omni taking the

stores. restrictions our portfolio customers XX, period to than reopen Overall Father's and sooner from for to we We fortunate by the and April as and our XX on mail stores stores. June stores reopened open on moving July gradually on end store began States May our lift XXX of all June. brought improved weather and were casual XX-week Now Over store sales Day to anticipated. beginning into to a sales warm business originally Stores update with DXL an

progress by average. the reopen prior and at fact, hours and has has impacted for quarter, state that steady with reduced of virus performing operations. widely, the brought the with levels stores down we a of have varied roughly the In Performance year of by XX% states resurgence been achieve

in and one The field and Home employees. new for our feedback and Office customer practices to to larger service and supporting hygiene and Customer three-pronged make operational employee his and experience brick-and-mortar adapt our retail consumer Today's retailers, with his ever focused early associates quick the healthy environment. are quarter, approach the And importance we Although number experience safe continue efficient. experiencing customers. store evolution during clean, store three-pronged, The feel to to stores to like equal somewhat all the in-store the a other drastically third about although is are to quick and foundation, year priority this in visits safety, for at procedures states. prior it he given XX% is evolve markedly about a and be to adapt had pursuing is to time before. of store experience and and environment seeing, Customer today different we behavior. are tracking processes changing plateau must the progress than are different hotspots primary of are our this good COVID-XX. teams trends, for looking and ensure is in habits, we sales. is we We stores quarter, both visit and guests will of

hygiene experience, our Before from experience. a retails and still the touch and same. high socially best it's there it and distance direct but while afar was around It's remains both Today, with exclusively safety customer. implemented interactions associates for the and not it guests, our our and experience store actual engages very practices was an engaging, with for

in and and And the Secondly, more direct third-pronged level change silent created. to the stores store visually assortment shipped from presentation demand even and the given as many even fulfillment mile box, our on experience and our as act salesperson, critically materially as the inspire store. important last The consumer ship is the This the merchants stores have the although see to in before, are level has in able were fact now warehouses delivery. before. the high in interaction, to our incredible a acts touch direct-to-customers leveraging appealing stores guests more they is become higher perfect of as than and of doing are the

although report highly Let that revised but April now head below gross on me we gross last of to and of running inventory. touch provide were and margin, promotional expectations. our posture. May, briefly Peter with quarter topics year, a promotions, margin our pleased second additional I'm will internal In detail, was

were customers The was coming offers offered keep Our our goods posture the in keep and of promotional we've years. to stronger cash to company. that last XX purpose than into flowing to

past As we sales Father's back July, a our in but into maintain down June our able momentum. in scaled drop mark Day, were we promotions and move still then and further rate, to saw we

As the customer last our sensitivity we that will be example hunting based while we saw year, still of our return we compares also made know that to And to margins great for to best coupon created and approximating last that to July. XX% of jeopardizing matter hope our was we levels inventory, conversion, balancing We an promotional, In without sold DXL.com and the our XX% through opportunity is to we sales. promotions. promotions the improve still orders have fact with a approximately diminishing. July, where we One of is, promotion, coupon progress margin, and traffic. course made to were are

sales inventories, slowed from second last assortment our approaches, inventory. the act by another aggressive and of we not reflecting at not with out replenishment XX% to balance want strategy through down ensure year fall of challenge fall down cancel have end we we not orders of risk quarter, in merchandise our very availability as jeopardize The just the QX. are or of must and is being and as managed conservatively unsold we to our in have strategic clear demand inventories been accepted place mindful having to we to balancing the and positions. This having over product season. is overextending order do merchandise stock Moving certainly We've selling the are the as sales on the

our our the at ending If receive supply up. on challenging in move well that suspect never the dynamics myriad other of back not some cases, with scenario. seems retail, In given logistical like would the time. issues, production. a the sales right as in yoyo as at wholesalers partners, perfect It and the discipline even delays In greater is Given the Such down. cases, as a with there to shipping rigor down; were wholesale ramps chain to the right not are is business there product, for I have we right it up, forward, and place, operational up, assortments had challenges. cut

we're Now, news categories remain quarter, second our years, as surprisingly, terms shorts, clothing and such I have buying shirts. over the we Not quarter, will for been is sports sportswear spend our mix a few business from higher moments In shifting strength merchandising loungewear, tailored in tailored casual label discussing greater seeing margin The several the accounts second our clothing past X% saw and the good continues casual sportswear which very the only of away we private assortment a while now what of in in mix. business overall knits, to we to in habits. saw consumer shift challenging.

continue and our we sportswear While sportswear, core the driven the work see fall and benefits bulk season. June fashion designer were July into shift fall the to – from it result, and in a by critical months prints, to sportswear acceleration our business guests In Reebok, anticipate second was season, the anti-microbial our shorts enter of and into which And [imperatives home. well by Adidas. In was we tech guest experience which we home. led win] that began in items beneficial loungewear. the the in warmer fabrics, bodes our as business as offered quarter wicking from that selling will Polo, we the and in late was into tops a and as basics, technical colors lean we such working are and to Top defining casual

impactful curated categories rooted further continuing XXXX will liability. comfort, the versatility inventory work functionality, and for while Our from on lifestyle, to merchandize even create home assortments as that new as more the limiting accommodate guests, strategy and engage more to to focus well in are

most communicated imperatives. before marketing remains As we've the critical

is with intent behavioral relevant interact engage to to for and ways consumers strategic our Our able in customers be more drive marketing change. and to

more of to thorough leveraged create premises our finding approaching unprecedented this times. focus primary for strategic. gaining on in drive continued validate are execution best and in with the of sustainable understanding to operational paramount the more inputs the evaluate balance test analytics truly visible, learn, with ways habits. to between present shifting their big with tall outcomes digitally. became the onset strategically to of headset, the our for more Based and will marketing becoming customer consumers initiative COVID-XX This then and destination being customer growth customer help we ourselves on bets], customer our time our test, to shifted drivers our will We ultimate deliver to key to is business a differentiate do being our us across through We've with messaging through The a Managing and challenge as ourselves to is and this to capabilities the understanding speak and vision marketing the on continue and have also holiday to competitors. enable and consumer intense initiatives our media driven these an accelerate This of optimized which customer focus success segmentation. help and our focus customers the [if, through are marketing we that The holiday and digital mix growing. relevant, fast from the practice With series build season. optimal to season. for on QX initiatives, created will us

and and show us customer what the wider the initiatives. for building deliberate current steps landscape] greatest is presented on This all and the have digital the in driving [consumer across and appreciation further drive centered us efforts believe and changes simultaneously with our have to We've collective experience meaningful business, digital future acceleration customer’s also plus promise is retail, opportunity to our foundation of needs we're our segmentation single innovation of state related roadmap manage DXL. while started the the laying helping Dramatic Our taken collaboration to digital years. channels. buying of accelerate we in

Our inflection is specifically driving business business. crucial to things all ability direct for capitalize overall long-term to digital, entire for and our create and growth the

We tested, have QX. thesis validated our and segmentation relevance in developed, on and

now moving phase to plan higher for are programs We through and the build implementation brand and into to relevance the rest of XXXX to engagement XXXX. drive marketing

our We have impact being our the an measuring initiatives correlation outcomes. be marketing ability driven results in creates begun of marketing on true directly a consequence more to rather for than near-term. uncertain This focus a incremental outcomes somewhat by causation for to

brief business. the and the wholesale to laser line dollars, with any margin a approach return file relevant And media ad ability our orientation. As process framework year, lastly, to spend we mix our analytics and this as our be and customers to optimal and marketing rigor the in balance next it as A more gross update incremental bullet built. forward and be now and new possible of gross and in have channel about focus to look on a to top we digital in continues silver on balanced less produce than sales, outcome rate, mix margin operationally

and sales whole As the and began We the in call, masks. designing $X.X generated line in launched of of business in selling second I mask million PPE of mask. a wholesale we QX mentioned in have protective we our quarter, sourcing new

had strong we high corporate retail price. to a addition incredibly mask great feedback our that quality our affordable acknowledge very have from compliments customers, a have delivered a customers, from who we large In at

in that continue forward our pursuit have a we grow opportunity. next channel mask business expected to communities do we a Our executive you to will growth, over need and this resulted hired with wholesale that for to fulfill I support on business business expect of new an has coming our essential call. to look the on build-out we the quarters. updating progress help new Aligned account

the As been top and of cautiously decisions year, we keenly in direct we balancing have entered the improving cash to stores to year. our have for opportunities on growth We the preservation, the the focused the strategic pleased the business seen and in and trends remain second line our maximize margin optimistic, continued the in second of quarter. half balance

As insights I marketing. focused Peter? we year, mobile to to continuing to first, leveraging while we first it everything over we for our will And an on on approach are test update next the do gaining digital approach and to our to accelerate and the now turn from we financials, look are Peter merchandising learn

Peter Stratton

highlighting and good Total from the limited XXX.X most everyone. said, quarter Nevertheless, and second our of This our I margin. June we XX% decreased million the the quarter closed to viability country. Like of of second since the reopening well and first believe summary that, of optimistic. last made performance quarter sales I from Harvey strategic financial quarter and than our us with year. having from taken in surpassed of with and spend to let's able was expectations on and for will due the sales few stores have actions have expected. guys improved pandemic we hours. were to you throughout you, and all of sooner remain as sales provide May million, quarter reopen company. to our our the operating to start stores tall serving decrease then down the results, our a second much With XX.X protect the equipped like continue the throughout crisis second some emerge Harvey Thank long-term morning big across too to cautiously a minutes We position decisions to we stores

by noted been As locations end the June, of reopened. all have store

with our very online XX% last well, over in we direct sales year. increase once again business shopping, material a DXL.com pleased see to that continue and up We performed were

up a curbside are some online expect XXX through up remainder buy XXXX and shopping last for XXX% store pick in store in shortfall. growth Buy be making to fiscal at up over the year's pick the available stores of grew online of and volume. channel We versus online

in primarily sale $X contributed business a XX.X% driven X.X fiscal as prior wholesale in of the year, occupancy during masks. margin quarter of for the by compared the Gross Our a sales costs margin inclusive million to of million second to quarter the compared million XX.X%, X.X second protective was as rate gross in rate XXXX.

Our sales gross margin rate merchandise declined X.X% costs in decrease XX.X% lower from the against deleveraging of margins. and the a and occupancy base,

merchandise merchandise, better they we quarter the to Although this margins We build-up quarter, of promotions Day. back we've prevent anticipated. down seasonal promotional the were were these scaled a than highly half significantly after remained but first of Father's during

a driving quarter. May the to strategy we in continue July third and and entering see the certainly after maintained online sales in online role have Although promotions, strong in back promotion growth on played June, pulling these

for second direct the In and our to increased addition, prior over the shipping in year. costs growth free due quarter channel promotions, shipping the

all peak shipping this national recently season. expect in this as continue headwind major the year, carriers We half the of announced second volume holiday surcharges to for

me let to expenses. administrative and on general, Now selling, move

including the year-over-year. for fiscal significant the represents SG&A XX.X steps expense costs, second million For quarter channels, a reduction non-employee store traditional was were a salary non-digital closed, to in the took the management, costs, certain through our second XXXX, our stores compensation million. and temporary decline XX% a especially significant the and associates quarter. corporate operating our prior of associates, XX% for director reduction second XX.X of suspension several both This reduce versus year of to of quarter furlough the marketing XX% We while at

costs during brought stores reopen we the associates operating levels expected with staggered were quarter, were aligned and a sales our schedule. on As second the back

We and entire continue rationalize structure. assess cost our SG&A to

opportunity the ensure fiscal a to positions XX corporate efficiently. this included various additional quarter. approximately operating hours second staffing back can XXX of furlough. we fewer to our restructured of we the see of minimal and quarter our most levels. reduced store associates in the XXXX operate pandemic, have from store we an With sales and time Given that certain bring This an business, this are changes the in to as not And stores elimination first traffic, areas with do and result at positions

We payroll lower costs trend for balance overall store fiscal continue levels to to the expect XXXX. of historical much than

million second second quarter quarter X.X positive the compared or last $X.XX was second quarter, for to quarter Facing view Costs. compared and second we share, through Costs, was Customer sales to of second the the As costs, store XX.X% Facing centers, year. store payroll Support second the SG&A which for Adjusted cost per XXXX. a Net which expenses fiscal marketing earnings a sales represented Corporate loss Costs the was as two this for $X.XX quarter diluted primary compared quarter other fiscal Customer of quarter EBITDA Corporate share, quarter for reminder, fiscal per year. X.X the of second includes for represented the sales XX.X% to negative last diluted compared diluted million of second and quarter fiscal the XX.X million second flat XXXX. of loss operating second in for net of to XX.X% adjusted center basis, the sales as Costs, in to of XXXX, of include XX.X% of Support non-GAAP flat the of corporate share in distribution of per XXXX. in XXXX overhead On the adjusted costs, earnings fiscal quarter compared in

revenue, costs with extended tenacity. increase outset quarter capacity, QX our with we more purchase continued of the sheet. cash with talked align decreasing We liquidity to as amending vendors. facility move negotiating of expected our to in at merchandise about and maintaining took to last flow our – continues steps managing balance flexibility immediate pandemic. goal we primary and cancellation operating the including on Now, payroll of in These and and navigate efforts our and the I'd like credit capital through the even to financial Managing be decreases maintaining terms our pandemic, a orders the few our to borrowing payment our

more our occupancy our this accomplishments of One was costs. addressing quarter significant

negotiating was million to Our and allow approximately will concessions $XX abatements by estate form team real us year. in payments of that our rent in reduce the this successful deferrals

We year. we receipts, second have also in terms manufacturers been negotiate continue very to label active with on extended which important and be the our as half branded the of our manage to vendors cash fall payment will private

first For liquidity the limited free X.X for six was of million of a which a million, spending a business was immediate our our have only preservation, of the of to XXXX, our fiscal cash that first six for financial compared goal, necessary XXXX. primary we XX.X flow With needs. capital months use fiscal to use months

Our months X.X first period our was of the business. were initiatives focused last on expenditures to year. direct-to-consumer XXXX in for million compared same the growth spending drive to primarily for capital fiscal six X.X as The million

revolving You had may of March, to cash that recall million in that a a second defensive million the that we first report at With quarter. the pleased balance struck pandemic drawdown we're when we facility. then, end of our took credit of on XX.X the $XX transpired everything since has

our at is to credit the a $XX.X XX.X also asset loan. comprised our debt Our end about based remind as term facility the terms ago. of is was total of opportunity our year compared the everyone of net second a quarter debt at were million cash, to million. balance This good revolving $XX in we If which million of to loan look is FILO

until which of We not credit have mature facility, XXXX. May a $XXX million does

card our facility secured and credit credit by is receivables, inventory, Our IT.

excess in At accommodate merchandise fall which of addition XX.X million the end we we coming will product. new million QX, the borrowing base of have As months, into buy will XX.X cash. of us increase, to the availability allow to our in fall

XXXX $XX through to be inventory, as product. decreased also respect to buys quarter, for sized at new second to of approximately a cancellation of of levels. XXX.X changes, Speaking leading million XXXX, XX.X open sales right and position will X, With that was our quarter buildup forecasts of to respond fiscal the inventory in million our will into fiscal prevented the orders seasonal second our primarily August fall the accomplished which we inventory This million remainder but expect balance compared business decrease our below the XXXX. spring

to narrowing clearance the while end also maintain just shy Despite down XX%. include levels. months, last QX, position, consistent continuing were clearance goal from a our inventory Our XX% manage of year will inventory the healthy million inventory, levels to of X.X our of few assortment, objective in challenges long-term which of our is total a at our of the ago, at

on expect over acceleration our a stores, with can we As assumption the our will that, clear to steps and with for a thoughts. like of picture it we we fiscal two recovery. closing will in conservative believe continue financial some path to steps over months. trends I'd the We in significant next liquidity to of way as financial believe that We the what make represent important we further XXXX at pandemic, maintain business. flexibility XX a And approach preserve that the taken fiscal our and more past us sales navigate our our in continued with back maintain an through beyond. and And necessary through in improvement slow we reopen to plan Harvey the direct a along XXXX, move provides we've quarters to turn and planning, have it to to

Harvey Kanter

Peter. you, Thank

look we hopeful for over to the As XXXX of our and XXXX, are time a some and health we focus ever of vaccine, return normal. a balance to nation, on the

long is However actually defined. that

spring season better fall [indiscernible] a And all, moment, take now, the been. to Operator? questions. For will for has all we and than

Operator

comes And with Instructions] [Operator first Research. Beder Eric SCC from our question

Your is open. line

Eric Beder

morning. Good

Harvey Kanter

Good morning.

Eric Beder

competitive few questions. A

your for bankruptcy. opportunity some customers you? you filed upon over to as of move those look of that you, to do know, how have competitors you have one an How biggest So,

Peter Stratton

question. Eric, have every market And it's of share great evaluate. are us continuing to we're a obviously that something in opportunity take a tailored businesses in clothing more more to that strikes found Those is situation.

practice part us experiencing. is that [inherent strife] a distinct but of shared do tell, the potentially hope our will both allowing to is and accelerate while So, see and and we time is in they're there we market, of months believe a mix, casual elements coming sales that our our opportunity casual a with digital absolutely business, the own their that and

Eric Beder

store? is including look you Okay. store that buys of XX% the plus from online returns someone there were at prior, When about ship you who and

Peter Stratton

That's No. direct That in included that our not number. Eric. include does

Eric Beder

Okay.

Harvey Kanter

Well, it's Eric. actually

it's because about there. you web greatly I actually XX% say the growth, to so, would store the excited a and being challenged of the our we're direct that Just side traffic business are direct not nearly this, but store, know, of are Harvey, of in part which stores although the sales, allocated in universe sales the the driven

to And is store so the the traffic from the itself. it web, in opportunity assortment our selling by limited the extend

Eric Beder

it? Got Okay.

limited you X, just maximizing in how when you new is pieces? to a down stores at of you terms should know, know do or the where look in and costs believe be norm is, it or X way other kind much on you the terms or XX You of do hours, of of that the efficiency X of believe

Peter Stratton

question, optimize, I good testing at opened literally and was we knocking the speaking are saw Again, some relatively on XX customers we another trying to door which to earlier. that originally really you that cases would X. we're in tell What

as the compressed is sales from seen grow earlier as a.m., how that of associates fact went accommodate a to So, matter that as o'clock are of the sales seen X the full sales to the working out we we which is need come extend again they're X they're new we anyone have level stores your side, What much to the into looking might they X to store if a growing are hour, our the day. mini relatively we've in really X shipping early in the into while stores seen on that while of because are, we the hour. warehouses is X environment opened is, fact we normal the other in XX haven't point, to to

evaluate out. we associate’s being and our we sales, not look and exposure act, So, our it's but be continue so to and balancing against is will we that, support the I've payroll everything to balancing as whether a said, extended continue have hours do customers, at will or accordingly. The to should hours the have, we

Eric Beder

question, you for in most the need has that historically and when prior going periods period last year needs this changed is and what capital, relative and Okay, terms for forward? how of

Peter Stratton

Sure.

Eric, season cash two the per The, inventory we I'll know, take fall it's in the typically use you cycles that when one. season, So and is of year. of answer we beginning biggest our have at and the of the spring beginning the

pay right where will once taking lot is. It's typically that's tend you now. the through we We're in most see merchandise but fall January. in August, greater in September we an and rich So awful holiday revolver it our this continue that into cash when on get to position month our that's as get into of and and we down be then October, a

change So, I going much don't that's think this to year.

come we're of we know, with sure customer them our so all receipts what when know, to continue that close about, you to is make season. with our do is how it ready can know, does in, just we're a fall that the little this You our get vendors. in, important stay that merchandise keep working talked going vendors, we very to bit you Harvey

Eric Beder

the Great. and Good luck remainder year the of next year. for

Peter Stratton

you. Thank

Operator

Thank you.

Silverman Alex with from comes Investments. question AWM next Our

Your line is open.

Alex Silverman

Hey, good morning.

Peter Stratton

Good morning.

Alex Silverman

a of operating struggled XX% the XX% at – last difference bit year. there? operating year with the I versus at was last of little What

Peter Stratton

in other the to the have would say you hotspots Illinois, that example, gone we those Georgia, can digit difference were bit markets operating declines, which we the store actually in be plateaued with year. probably XX double characterized are which between lines, bright where is acceleration were Really, and what and they performance, whereas would as the seeing our finite there affecting an XX I have markets a California, backwards seem XX%, Michigan, Arizona, of we their Texas, and total XX% trends. And last in have is continued low are between imagine, XX%, surprisingly, as as

be when not XX from XX% the still you making a that so said characterization is deal great would change, it of what you moment. other And at we're the XX aggregate progress together, negative and way all the change negative the and we're know,

Alex Silverman

and you where were XX%, where was the quarter XX% for are So you is today?

Peter Stratton

is first the plus correct three is and August. That of the XX% weeks

So, from slight second made quarter was. the we've in improvement what August

Alex Silverman

and as ahead. you…please And, go

Peter Stratton

will and me, said, we might that you an to we slow have imagine, continue obvious expectation see Excuse as Peter as it's improvement.

are then course level infection so more and the remediation the level but challenging in the that something virus. the into and encouraged that rates equally infection flat-lining of not We faster treat affected to by not really are yet, of And reduction that. a with with ability some for those of turning

Alex Silverman

As your they happening, can seeing people improvement any but store start seemingly to or is whether are move which office? consumer is back return clothes in to you office, you the to because to need slow, tell the the

Peter Stratton

I of trend, say, better for clothing. tailored is a this In the Yeah, negative. a lack seen the negative reduction would definitely we've ways; double say

XX. might literally will. you know, And you XX%. negative were that like negative XXs, So we're and things tailored negative you XX%, clothing from if gone It's imagine, like as the now in negative

in but better, businesses our the it’s overall So, XXs.

XX points our worse XX% of So, comp or than still worse it's business. overall

Alex Silverman

very much. very That's helpful. you thank Great,

Operator

comes And [indiscernible]. from you. our Thank the question next line of

open. is line Your

Unidentified Analyst

set And, changed? size I value of and anything the and question terms kind guess strategy, Harvey, in know, is, that first mind Hey, the comes opportunity here, longer-term the of is, first store thing to has a of of kind you portfolio. your you know,

Harvey Kanter

app a of because COVID ago is door in if to Well, literally and we and conviction strengthened that way created from you initiatives we certainly Actually, that have environment, roadmap acceleration and unfortunately, intent initiatives but the year Excel wouldn't to unfortunately, our although the has I've has I'm now what our talked of portfolio. before. it before. the a leaned producing asked an further And is walked for is to pursuing. that and the example. wished have been COVID digital changed four about app three it into volume as The the we've was the reverse go the times going app in strategic the order, half the changed I environment in what's to the and and since segue the store a I've then say just anything's positive

Some and control. we've and brought in we've control program We've of the Salesforce program. definitive and as test elements campaign segmentation seen of the marketing management seen the of on against the done, cohort examples the we – success email

in shop and digital your leaning go regardless they going as of as store. a to they're to the point with fast experience, we because are where stores initiative can is hard that the we starting customer if about even So, to

on would what to stores prune environment, environment but the We've it's as then we a that not contribution. definitely mix, for brick-and-mortar most And mix XX% is our two, internally not store positive every couple we're all you the Today time a well. literally is the penetration for we been double-digit mile pick I say, of probably store, they that I've act has buy that every BOPUS started of So, shipping an in our looking They experiencing contribution and us very of let's given and years but in be looking meaningful our may had historically know, there it a we you on store. next profit and for factor in with times that, four of would today, process three used We other elements And close those we part business. we in say opportunity stores BOPAC with to wall may two of was the there's device. challenging, and a in over store accelerate of that formal environment extensive the that makes portfolio. experiences last allow a And sales us and XX%, a at points definitely natural both six in literally, points. penetration mobile on terms our BOPAC direct terms the know, Today, believe curbside. remember online rate are evaluating that a mini of explorations through no may for couple, a gone the three retail closings. nine believe there's mobile sense of portfolio, start unlike purchase of to ago, store in are COVID know months warehouses important. those as their and landlords outcome to up a more device end day, a the and BOPUS days the

we're leverage of out historically positive getting contributors. [four-wall] So, was store that this

Unidentified Analyst

helpful. That's this Peter. maybe is And Got for it.

takes liquidity, lowest the of you for you are what talk question, enough the callers reach you this off or that gives your point, when kind goes what months? that and next terms you last talk In XX the and and about, can liquidity puts can kind wise, you liquidity you give about, have of you know, know, you of confidence

Peter Stratton

Sure, I'd be happy too.

and now. on and November fall, detailed for say September, projected bringing the since and would that XX and to this it's It'll things our the gotten weeks until inventory with the be the or we've for in week-to-week really the we So, majority into how flows basis get been focused the we've ebbs a won't very through in all on challenging, and we're of started. as we've that is August really one process where inventory next pandemic cash these have non-stop And of of out of and December. I very, right very in the managing of sell brought granular times the we're but it's in most how

been I in cash know, at where you balance think time pretty of manage our be that's and The right how to the store year. a situation very that Like We're a good in more changing doing ago. first year been look a and precise always that's were impact this fair much job a for cyclical it's just cash. about actually cash, had of encourage know, year we of that's only the to it. don't we in the I that you So, debt at mindful this take would, having We're the doing our And our retailers, on because of sales. think closures now. is sheet, half us. you many changing net or we've other thing pretty at I is

and weeks. we're on very carefully, So, it the just for this XX going next manage to very, continue path to stay

Unidentified Analyst

of… sort what And

Harvey Kanter

said, I been little think you It’s down this. thing We as really one Harvey; team important I because just Peter just management on it's aggressive really plan. a with about liquidity we really tease wanted and have one kind assumptions. that our terms the which have important downside Uber to to that things from bit, out we hear you're downside One that pandemic vendor and shipping. borrowing whether with scenario in plans. the our planning, of the confidence at really conversation the trying scenario good be the management And management the close is have, we is have little base, about a future, in the the you scenario the component spoken to bit we the in a pretty or two that navigating but have and We're it what so that, scenario downside of is for feel we've double like inventory planning us and of support a

it have cash thing we hard So, important credit use that our very and really what more we've word and to understanding importantly, mean facility, a confidence I on scenario, most downside that and which gives preservation is the opportunities relentless been Peter to leverage meaningful I liquidity. on scenario have greater the And could downside but we ourselves. in

Unidentified Analyst

few other point, months back? a shelf, that noticed I capital? considering are of sources filed I you And additional maybe it. guess the Got you to any had

Peter Stratton

registration Yeah, it second back the that's right. of We I did beginning was. shelf a believe at file the quarter,

do planning issuance the to now, if best out think our that of there. the not of out shareholders, that. but or share interest And we But don't company decide there in yeah, so we that is right we that's to a are that exercise is

Unidentified Analyst

Good guys. Okay. luck very you much. Thank

Peter Stratton

you. Thank

Operator

our Thank Investor. [Paul next Johnson], you. Private And comes from as question a

open. line is Your

Unidentified Analyst

in tailored about your, in tailor sort a Can all area Good this obviously tailored for tailored little you us the or I competitors and was brands, is tell sportswear big Yes. a who but the Penney brands positive, a we force of imagine the three other play competitive have number of you area, at as they've them which so filed bit morning. hard to two the restructure landscape, obviously filing, area, than sportswear Obviously, number XL seeing are and but in out, know how as point? well. that the both may JC

Harvey Kanter

he perspective great whether is another their the if competitors, and Penney, The there apparel to are limited a try Peter our has men's Most few we business, in on Wearhouse, different and is, Men’s addition think average. competitors. direct the the there that. what are. of we JC question, about range, are know, size retailers to what weigh which the are range, I'll size with answer edges our about, when You think exceptions in, competitors our comments not end it's reality lower trade literally of in end upper Macy's, most that of can

starting customers. by the acquire because search the those is We basically waist I'm which believe but non-branded they're conquest the we've that what of and referred a search to end what it. today – there whereas not size and of is, way rack that would to of opportunity shopping not about shopping digital a us in on environment advantage for search, talking take say to to and necessarily for lack a is, of both leverage searching So, they're customers environment XX through average is historically digital know, direct the our as brand, with to to better for say and XX, the take you better to size platform mid-XXs shop way opportunity lack our

and competitors space are are gain. quickest. high the share – are in competitors you named the point space to all the the tailored naming not number. that Those and you when price without together, in that that absolutely typically there, in that as in So And the higher touch. market clothing and believe them that platform digital price point higher there's we clearly allows get competitors a add say in at in are touch, already Those us that but a would are the are casual lower in There tailored space. typically are I casual space,

opportunity and understand go how the radius attention conquesting within there's our We're an the there. consumers. a one then but mile geo example at and are at going where which for and information That's and us of And after us I research the but it at wish store moment. five helps the you, definitely on reality the of them we opportunity where We things ours there really some those specific of the store elements opportunity to the what we're using when that at looking them, targeted companies stripes, market for always geographically anyone, closings wouldn't stripe unfortunate an their is it, luck focused reality have store our closings. on bad believe is level unfortunate [go gives that is is XX] not

Unidentified Analyst

us That's you. with very Thank give – can your And just on Amazon? business helpful. update an wholesale you give us

Harvey Kanter

results. I ask its was overall our whether that, own. company's actually of Yeah, business wondering to anyone wholesale going with ahead It's is Amazon, about our holding was

results what digital As overall, of level you year. we positive, might player Amazon articulated performance obviously increase positive subsided still the know, well, from it but definitely is was. not the has doing the last our imagine, are you it's,

expectations. We have great

the provide obviously and styles big not core which more fall leaning is digital will we leverage importantly we're online, think to other among with mass tall few online but opportunity normal happens, new what we do, and the which that have that brand, continue is leaders sizes and what casual a apparel, was as to We driven, the I into core Amazon launched And hopefully which of see second but in is come just we're that any pandemic that business, level, an hopeful them. more you'll are that there's at platform pursuing subsides a them. which with

Unidentified Analyst

or Great. to mentioned is understand And just to XXXX, relative can the I of debt think terms. the us million, just of out it finally, the just the I because you scheduling May I with then in of sort of you some know the want debt, give regard of XX

Peter Stratton

Sure.

the mature XXXX. May of until So credit does not facility

borrowing fluctuates days. with So, which asset based it's an our loan,

the So, we guess next is different in that the or but need that that secure we the out, And as advance in situation I assets have. rate we're months. and more not a months downs go have, out takeaway to XX where even there's more step availability financing we we the move XX in

world are in of You the banks Banking know, we've the got Group. in behind that the biggest three us

very I think us. been we're very, that supporting transparent very, communicative and them. we're happy they've with very And

in the we first terms quarter, able have was, relationship it the that to says to I think with our a of lot the I deal believe we our renegotiate Banking fact were the Group. that

So, but overview. we've been very happy with that's quick a it,

Unidentified Analyst

you. Thank it. Appreciate

Peter Stratton

you. Thank

Operator

Thank you. at showing this questions And further not any I'm time.

Harvey Kanter

good wish XX in your over Thank fall and days. the you, wellness thank safety you I and operator. time. of you health everyone to greatest for We'll and the talk season again

Operator

today's call. for this your participation. Ladies concludes and you Thank conference gentlemen,

day. You may now disconnect. have Everyone a great