The American shoe retailer reported strong sales for its fourth fiscal quarter, but its shares tumbled by almost 25 percent as it posted a surprising loss and issued a weak outlook. The management unveiled a new strategy to support the company in the long term, and decided to change its name.
DSW, which is now called Designer Brands, said it will add more of its own products on store shelves, moving away from solely selling branded and other designers' shoes and accessories. It will still operate retail stores under the banners Designer Shoe Warehouse (DSW), The Shoe Company and Shoe Warehouse, but will also produce items through the Camuto Group, which it bought in November in combination with the Authentic Brands Group (ABG). The new name, Designer Brands, and the new stock exchange ticker, DBI, went live on April 2.
The management said that over the next three years and beyond, it will leverage its integrated enterprise to continue delivering differentiated products and experiences, while significantly expanding its gross margin by bringing the production of its private brands in-house and increasing the sales penetration of all of its produced brands across its retail channels.
The priorities detailed in the plan include building exclusive brands and products for DSW and The Shoe Company through the Camuto Group's design and sourcing capabilities, while expanding services including DSW's partnership with the W Nail Bar, as well as custom insoles, shoe repair and shoe concierge services. The group is also looking to enhance and build upon DSW's VIP loyalty program with new features, and to launch a new loyalty program for The Shoe Company.
As with Foot Locker, which has bought several innovative start-ups, DSW's new strategy can be regarded partly as a reaction to the development of e-commerce and a trend by numerous brands, like Nike, to develop their own retail operations, particularly over the internet (more on this in Sporting Goods Intelligence Europe).