While you don't have to watch out for trees in this jungle, you may want to watch your back. DSW (short for Designer Shoe Warehouse) sells discounted brand-name footwear for style-conscious men, women, and kids through about 375 stores in some 40 US states, as well as online at dsw.com. In addition to more than 24,000 pair of dress, casual, and athletic shoes, DSW stores offer a complementary array of handbags, hosiery, and accessories. The shoe store operator also operates about 345 leased departments inside stores operated by other retailers. DSW was founded in 1969 and merged with its majority shareholder, Retail Ventures, in 2011.
Change in Company Type
In May 2011 DSW bought out its majority shareholder, Retail Ventures, in an all-stock deal valued at about $773 million. Retail Ventures, whose only operating business was its 62% stake in DSW, became a subsidiary of DSW following the tax-free exchange of shares. The deal allowed Retail Ventures shareholders to become shareholders in DSW and eliminated the expenses associated maintaining Retail Venture's listing on the New York Stock Exchange.
Fast-growing DSW operates shoe stores in 41 US states. Its two largest markets are California and Texas, home to about 20% of its stores.
In addition to its historically-fast-growing retail operation, DSW operates leased departments inside more than 260 stores operated by Stein Mart, 74 Gordmans stores, and one Frugal Fannie's Fashion Warehouse store. Leased departments accounted for 8% of DSW's fiscal 2012 (ends January) sales.
DSW's fiscal 2012 (ends January) sales topped $2 billion, an 11% increase vs. the prior year. Net income rose by about 62% over the same period. Sales growth at its shoe stores outpaced growth from leased departments, 11% vs. nearly 8%, respectively. Sales at DSW stores open for at least one year increased more than 8%, with all merchandise categories performing well. Sales also got a boost from the addition of 17 new stores in fiscal 2012.
The historically fast-growing company is returning to a more aggressive growth strategy after a hiatus during the deep recession and its aftermath.(DSW was a relatively-strong performer throughout the recession, which left many other retailers struggling with falling sales.) In fiscal 2013 the chain plans to open 35 to 40 new stores, and as many as 20 shops in each of the following three to five years. The new locations will be in both new and existing markets. To grow its online business the shoe seller will offer styles, sizes, and widths not available in local stores. DSW is also looking for new partner retailers for its leased department business. The company targets fashion-focused men and women from wide-ranging socioeconomic and demographic backgrounds. It looks to capture these shoppers by offering a broad selection of in-season styles at prices that rival the sales deals found in department stores.
DSW chairman Jay Schottenstein owns nearly 73% of the combined voting power of all classes of DSW's common stock.