Question-and-Answer Session
Operator
Thank you. (Operator Instructions) Your first question comes from [Evelyn Greenwald].
Thomas Filandro
It’s actually Tom Filandro. The question here is a broad question. First is what percentage of your customers shop both brands? Do you know the answer to that?
David A. Levin
Yes, we’ve been looking at that because of the hybrid situation. Approximately 25% of our Rochester customers shop Casual Male.
Thomas Filandro
Okay David, so here’s my question, was the convergence of the luxury spender clearly trading down, which we know that may represent a secular trend, why not simply converge both of your brands into one, seeing as the customer base is similar although the percentages aren’t that great? But they are clearly a similar customer base. I would expect that the savings would be significant if you were to do that and that would also provide maybe a more potent marketing message or marketing point of view. And just my simple view is here is that Rochester brand has greater brand equity, so you could just simply offer value priced Casual Male product in those stores where Rochester customer or that luxury customer still exists to some degree, as opposed to just this sort of testing of the hybrid strategy which seems like a baby step, where I think more drastic measures need to be taken in this environment.
David A. Levin
I think it’s a good point but that’s, again, you know, baby steps in this environment, we don’t want to do something that could seriously fail on us. So I think we’re going to get a good read off these five stores to see exactly what happens and transfers and we’re going to be monitoring it, and then making the next move from there. I’m not saying that what you’re saying may not end up to be the end game, but there’s a lot involved in this and we want to do things prudently and make sure we’re – that this is going to work for us. We have a high degree of confidence on this conversion on these hybrids, and we’ll see where we go from there, but your point’s well taken. It’s something that we will – we may be looking to down the road.
Dennis R. Hernreich
Another point to add to that, Tom, is our highest volume and most profitable stores are Rochester stores. So we do have a fair amount of assets to protect as we make these steps.
- To read the full transcript on Seeking Alpha, click here »
