Will a new name and private labels give DSW a leg up on the competition?
Yesterday, DSW Inc. announced a three-year strategic plan that includes a name change for the company, a decision to add private label footwear to its current mix of brand name shoes and a further strengthening of its omnichannel operations.
The company will be known as Designer Brands and operate stores under three retail banners: DSW Designer Shoe Warehouse, Shoe Warehouse and The Shoe Company.
Last year’s acquisition of Camuto Group, a footwear designer and wholesaler, will provide Designer Brands with an in-company resource for developing private label shoes to provide a competitive point of difference from other shoe sellers while at the same time helping to lift profit margins.
The Wall Street Journal reports that exclusive brands generated $285 million for DSW last year. The company expects that number to climb to $725 million over the next three years with brands made by the Camuto Group.
In a presentation to investors, CEO Roger Rawlins said that changes brought about by technology, an increase in brands selling directly to consumers and consolidation within the manufacturing ranks prompted Designer Brands’ decision to focus more on its own labels while continuing to build on its omnichannel expertise.
Earlier this month, DSW announced that it was expanding a test of nail salons in its stores. In an interview with Ad Age, Mr. Rawlins said the salons help attract Millennial women to its locations, resulting in increased sales. The salons, he said, help the retailer offering “differentiated experiences” that cannot be matched by online sellers.
DSW posted a same-store sales increase of 5.4 percent in the recent quarter, but registered a loss due to acquisitions, higher marketing expenses and the company’s decision to shutter its Town Shoes business.
- DSW Inc. Announces 3-Year Strategic Priorities and Financial Goals; Changes Name to Designer Brands to Reflect Strategy and Unique Business Model – DSW Inc.
- DSW Inc. Investor Presentation (Slideshow) – Seeking Alpha
- DSW to Rebrand in Shift to More In-House Lines – The Wall Street Journal
- Will pairing nail salons with shoe stores be a good fit for DSW? – RetailWire
DISCUSSION QUESTIONS: What factors do you think have had the greatest impact on shoe retailing over the past five years? Do you think that Designer Brands, formerly DSW, is on the right track with the changes it is making?