In an effort to rightsize its store footprint, Designer Brands on Tuesday said in an earnings call to analysts that the company expects to close nearly 65 stores over the next four years as leases expire. The retailer said that number includes 24 locations it will look to close in 2021.
The company, which owns Designer Shoe Warehouse and Shoe Warehouse among other brands, reported that fourth quarter net sales decreased 26.6% year over year to $609.4 million. For the full year, net sales decreased 36% to $2.2 billion.
For the quarter, the retailer reported a net loss of $134 million, and for the full year, the company reported a net loss of $488.7 million.
Designer Brands is running toward the athletics market.
Over the summer, the shoe retailer announced that it was going to consolidate its business with drastically fewer vendors and focus on its top 50 footwear brands. That strategy is still in focus, as the company renews efforts on three categories — athleisure, kids and seasonal product.
In the company's earnings call, CEO Roger Rawlins cited NPD Group data from fiscal 2019 that the overall market penetration of athleisure footwear was 55%, compared to the retailer's penetration of 30%. Designer Brands "began to undertake a critical pivot even before the onset of the pandemic," in the category, according to Rawlins, and athleisure grew to represent 46% of sales by the fall of 2020.
It's a change that matches the current consumer trend of reaching for more casual apparel during the pandemic. With more people working from home, combined with a rise in consumers getting outside and running, hiking and cycling due to gym closures, many retailers are prioritizing efforts on the athlesiurewear market.
Designer Brands has made several decisions over the past year to transform its operations. The retailer eliminated 1,000 positions over the summer, including around 380 corporate staff and 700 store roles. At that time the company announced a reorganization that would require more warehouse roles and fewer sales floor positions.
On Tuesday, the company also said that it reduced its overall headcount at its Camuto brand by 25%. That segment of the company, which is focused on fashion footwear, "remains challenged" according to Rawlins. "Given the casualization of America throughout the pandemic, we have seen dramatically reduced demand for dress brands and footwear," Rawlins said. In response, the company plans to sell more Camuto Group brands through DSW and grow those brands in its stores.
Additionally, the company is planning to relaunch Vince Camuto, the retailer's largest brand, in the fall of this year. The retailer also stated that it will soon relaunch its J.Lo line, one of its "key owned brands" with new products.