DSW Sees Strong Back-To-School Start, Improvement in Women’s Dress Shoes

A couple of green shoots could be sprouting for Designer Brands Inc.
The shoe retailer’s CEO Doug Howe told analysts during a conference call Tuesday after posting second-quarter results that the company saw “dramatic improvement” in women’s dress, which posted a 900-basis-point improvement in the quarter. He also said that the company has been leaning into its back-to-school marketing to reinforce its position as a destination store, adding that the strategy has been resonating with customers as positive momentum has continued through August. That has resulted in “further sequential improvement in comps,” Howe noted.
The CEO also said that the largest number of sign-ups for its Designer Shoe Warehouse (DSW) VIP rewards program occurs in stores, adding that the quarter saw sequential improvement in store traffic as the three-month period progressed. “So as store traffic improves, it should have a positive impact on the program whose members drive over 90 percent of our transactions,” he explained. “Store conversion was up 1 percent versus las year as our strong assortment and improved in-stock levels resonated with customers.”
The company also improved its in-stock levels of regular-priced products to 70 percent, an initiative that Howe said been validated by DSW store customers who are driving the positive conversion comps. “We continue to optimize our digital fulfillment through our distribution center, which is operationally more efficient than fulfilling from stores, while also protecting store inventory to ensure the shoe she wants is in the store when she visits,” he explained.
Howe also said the company has “successfully” launched its partnership with DoorDash, which could be a source of new customer acquisition. “While it’s early in this relationship, we’re encouraged that approximately 85 percent of our transactions from the DoorDash marketplace so far represent customers that are new to DSW,” he said.
Looking ahead, Howe said the company will continue to drive growth by scaling its private label lines and building a more profitable wholesale model. Designer Brands will also continue to invest in its strategic growth brands, such as Topo and Keds. It is also seeing positive signs for regular price boots heading into the fall season.
The company is also repositioning the brand with “Let Us Surprise You” as its new tagline. And it has a new reimagined DSW store in Framingham, Mass. The new concept format includes immersive elements designed to drive deeper customer engagement and discovery within the banner’s curated assortment, the CEO said. Those elements include a number of services such as Fit Finder technology, shoe protection services and a customization station allowing for personalization of purchases through embroidery, engraving and digital printing.
DSW president Laura Davis told Footwear News last week that its merchant team over the last 18 months has been onboarding new brands to its assortment mix that include Blundstone, Bombas, Frye & Co. and Goodr.