Dive Brief:
- Designer Brands CEO Doug Howe announced the acquisition of 28 Rubino stores in Q1, in a move to “expand our reach and grow our market share,” he said on an earnings call Tuesday.
- The company on Monday named Sarah Crockett to chief marketing officer of DSW where she will oversee planning, development and implementation of all marketing and advertising initiatives for DSW’s nearly 500 U.S. stores and its e-commerce operation.
- The announcements came amid the company’s Q1 earnings, where net sales were nearly flat at $746.6 million compared to $741.1 million in the year-ago period. The company maintained its full-year guidance for 2024.
Dive Insight:
While Designer Brands has seen its share of changes and financial woes over the past year, including shifts in leadership and a company layoff in March 2023, Howe said Q1’s results indicate the company is gaining momentum. Comparable sales for the quarter fell by 2.5%, while net income fell 92% year over year. Gross profit increased 3.1% to $245.1 million from $237.7 million a year earlier. Gross margin was up slightly to 32.8% from 32% a year earlier.
The Rubino acquisition gives Designer Brands a presence for the first time in Quebec, which is home to nearly a quarter of Canada’s population, Howe said during an earnings call. The Canadian company offers “nearly identical atmospheres and assortments to that of our own shoe company stores,” Howe said. Designer Brands expects the acquisition to be immediately accretive.
“Rubino’s customers are loyal to the brand and we intend to continue operating these storefronts under the Rubino banner,” Howe said.
Howe said Tuesday its go-forward strategy includes strengthening its assortment at DSW, and enhancing marketing investments and omnichannel experiences. Howe said leaning into athletic and casual styles, bringing on a new marketing chief with experience in customer acquisition and loyalty, and the move to refresh stores with new flooring and lights while also enhancing digital experiences, is also part of the path to drive company growth.
DSW sales grew by over 460 basis points year over year and the company has seen “positive reception” to the store refreshes, he said.
“We are confident that we have the right people and processes in place and believe that 2024 will continue to be a time of transition for Designer Brands as our refreshed leadership team implements thoughtful, strategic and operational improvements,” Howe said on the call.
Designer Brands ended the quarter with 675 stores in the U.S. and Canada. The retailer also has stores under The Shoe Company banner in Canada. In addition to DSW, the company’s portfolio includes Hush Puppies, Jessica Simpson, Keds, and Topo Athletic.
