Retail giant contemplates shuttering 65 DSW stores nationwide
In a move to adapt to changing consumer preferences, Designer Brands, the owner of DSW and other specialty footwear and accessory brands, has announced several strategic changes.
The company has eliminated 1,000 positions over the summer, including around 380 corporate staff and 700 store roles, as part of a reorganization. However, the reorganization also required more warehouse roles, indicating a shift towards e-commerce and inventory management.
Designer Brands is focusing its business strategy on the athletics market, with a renewed effort on three categories: athleisure, kids, and seasonal product. This shift is in line with the broader athletic footwear and athleisure markets, which have experienced significant growth due to the blurring of lines between sports and lifestyle, the influence of social media and celebrity endorsements, and sustained demand for comfortable, versatile clothing during and after the pandemic.
In an attempt to capitalize on this growth, Designer Brands plans to sell more Camuto Group brands through DSW and grow those brands in its stores. The company is also consolidating its business with fewer vendors and focusing on its top 50 footwear brands.
One of the key brands that Designer Brands is looking to relaunch is Vince Camuto, its largest brand, in the fall of this year. The retailer is also planning to soon relaunch its J.Lo line with new products.
However, it's important to note that there is no public evidence from current industry analyses or news coverage that Designer Brands has specifically repositioned its business towards the athleisure market in response to the pandemic.
The company reported a net loss of $134 million for the fourth quarter and a net loss of $488.7 million for the full year, with net sales decreasing 36% to $2.2 billion for the full year. The Camuto segment of the company, focused on fashion footwear, is currently challenged, with athleisure footwear penetration being 55% compared to Designer Brands' penetration of 30%, according to NPD Group data from fiscal 2019.
In addition, Designer Brands plans to close nearly 65 stores over the next four years as leases expire, with 24 locations to be closed in 2021.
While the strategic moves of Designer Brands towards the athleisure market are not yet fully evident, it is clear that the company is adapting to the changing market dynamics.
[1] [Source 1] [2] [Source 2] [3] [Source 3] [4] [Source 4]
- The shift towards the athleisure market by Designer Brands, as evident in their focus on three categories: athleisure, kids, and seasonal product, could be a response to the growing demand for comfortable, versatile clothing during and after the pandemic. [Source 1]
- Designer Brands' business strategy is not only limited to the athletics market; they also aim to capitalize on the sustained demand for their Camuto Group brands by selling more through DSW and growing those brands in their stores. [Source 1]
- In an industry where e-commerce and inventory management are becoming increasingly important, Designer Brands' reorganization has resulted in an increase in warehouse roles, indicating a shift towards these areas. [Source 2]
- Despite the challenges faced by the Camuto segment of Designer Brands, focused on fashion footwear, and the substantial net losses reported, the company is adapting to the changing retail landscape by closing underperforming stores and consolidating with fewer vendors, focusing on their top 50 footwear brands. [Source 3 & 4]
