DSW’s strong third-quarter sales recovery was made possible by past steps to increase emphasis on its top-50 footwear brands.

“Over the last three years we have reduced the number of labels we offer and have focused on the brands we know our customers want,” Roger Rawlins, CEO of DSW’s parent, Designer Brands, said Tuesday on its quarterly call.

With the shift, DSW reduced the labels it carries by 25 percent over a three-year period. At DSW’s U.S. operations, the top-50 brands now represent 77 percent of sales, up from 65 percent in 2019.

“We believe that our strategy to go narrower and deeper with our inventory investments has been game-changing for Designer Brands,” said Mr. Rawlins.

He cited four benefits:

  1. Higher conversion: DSW is in stock with sizes more frequently, thereby improving conversion.
  2. Product access: DSW becomes more relevant to its key brands, providing opportunities for priority access to exclusive items and ensuring it is “placed at the top of the food chain when supply chain issues occur.” The company credited early, aggressive pre-orders and strengthening vendor relationships with improving Designer Brand’s retail inventories from down 19 percent at the beginning of the third quarter to flat at the close. 
  3. Uniform marketing: DSW can now “consistently tell marketing stories” about its brands with a more similar mix across its fleet.
  4. Full-price selling: With “fewer fringe items and sizes going into clearance,” full-price selling improves. Pre-pandemic, DSW had “500 plus labels and had to heavily market our portfolio of labels.”

“It’s retail 101,” Mr. Rawlins summed up. “You’re better in-stocks, drives conversion, drives more regular price selling, and that has worked and will continue to work as we move forward into 2022.”

Other off-pricers, including Shoe Carnival, Famous Footwear, Ross Stores and TJX Cos., also saw encouraging quarterly rebounds.

Ernie Herrman, TJX’s CEO, credited his company’s ability to navigate supply chain issues this holiday season in part to its extensive vendor reach. He told analysts, “Our vast vendor universe is by far the largest in off-price and, as always, allowed us to have quality branded merchandise for our shoppers.”


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