Casual Male Stands Tall

Higher inflation could soon start taking a toll on the U.S. consumer, and that means high-end retailers such as Coach (COH Quote) and Nordstrom (JWN Quote) could see a chill in luxury sales. So we scoured the under-$10 universe for a way to play a more budget-conscious consumer, and came up with retailer Casual Male Retail Group (CMRG Quote).

The company appeared on our radar screen as a low-dollar way to play a slowdown in consumer spending on high-end clothing. Casual Male group has been publicly traded for 15 years and sells casual and formal attire for big-and-tall men through its 500 stores in the U.S. and Europe.

Industry experts say the big-and-tall market is currently $5.5 billion to $6 billion, and research firm Thompson Davis reports that 49 states now classify 15% or more of their population as obese, vs. just four states in 1991, giving Casual Male an expanding customer base. ...