DSW changes name to Designer Brands; sets three-year strategic goals to turn business around

Columbus, Ohio-based footwear and accessories company DSW Inc. announced on Tuesday that it has changed its name to Designer Brands effective today in order to reflect the evolution of its identity and business strategy. The retailer also laid out a series of targets and strategic priorities that will determine the group’s operations into fiscal 2021.


DSW has changed its name to Designer Brands to reflect its new strategic priorities and corporate identity - Photo: DSW
 
The company, which will change its ticker symbol from “DSW” to “DBI” in line with its new corporate name starting in April, stated that it aims to achieve approximately 5.5% revenue CAGR over the next three years and post adjusted earnings per share between $2.65 and $2.75 in 2021.
 
The newly rechristened Designer Brands will also be striving to maintain consistent low single-digit comparable store sales during this period and improve gross profit by 240 basis points compared to 2018.
 
The company, which bought brand development company Camuto at the end of last year as part of a strategic shift towards transformative acquisitions, is shooting for operating income growth of $26 million for its new purchase by 2021, while it is hoped that its DSW and The Shoe Factory brands will see operating income CAGR of 13% and 19%, respectively.
 
In order to achieve these goals, the company’s strategic priorities for the coming years are structured around three principal points of focus, namely, offering differentiated products and experiences, growing market share, and leveraging the company’s scale to drive operational efficiency and optimize inventory management.
 
Designer Brands will notably be seeking to create a stand-out offering by improving loyalty programs across its portfolio, exploring product customization and using Camuto Group’s design and sourcing capabilities to develop exclusive brands and products for DSW and the Shoe Factory.
 
As it looks to increase its market share over the next three years, the company will be exploring new direct-to-consumer opportunities, as well as new partnerships, while also expanding its kids business at DSW.
 
“The long-term plan we announced today represents a new chapter for our Company as we take greater control of our destiny in today's changing retail landscape,” said Designer Brands CEO Roger Rawlins in a release.
 
“Over the next three years and beyond, we will leverage our integrated enterprise to continue delivering differentiated products and experiences while significantly expanding our gross margin by bringing the production of our private brands in-house through our industry-leading Camuto Group and increasing the sales penetration of all of our produced brands across our retail channels," he added.
 
On Tuesday, the company also announced its fourth-quarter and full-year 2018 financial results, disappointing Wall Street analysts with a surprise Q4 loss.
 
For the fourth quarter ended February 2, 2019, total company revenue was up 16.4% to $843.37 million, compared to $724.68 million in the prior-year period, while comparable sales increased 5.4%.
 
Nonetheless, the company posted a loss of $45.73 million, or $0.58 per share, compared to net income of $11.95 million, or $0.15 per share, in Q4 2017.
 
Designer Brands’ full-year revenue increased 13.3% to $3.18 billion, compared to $2.81 billion in the previous year. Comparable sales rose 6.1%.
 
Annual net loss was $20.47 million, or $0.26 per share, compared to income of $67.45 million, or $0.84 per share, in 2017.

Looking to 2019, Designer Brands expects to see low double-digit revenue growth in its revenues. Adjusted earnings are predicted to increase in the range of 5% to 11%, totaling between $1.80 and $1.90 per share. 

Copyright © 2019 FashionNetwork.com All rights reserved.

Fashion - AccessoriesFashion - FootwearBusiness
NEWSLETTER SUBSCRIPTION