Designer Brands Inc., the parent of DSW, recently set a goal to double sales of its owned brands in response to direct-to-consumer (DTC) efforts by national brands. Its acquisition earlier this week of the Topo athletic brand furthers that effort.
The in-house brands push was marked by the 2018 acquisition of Camuto Group, which owns the Vince Camuto, Lucky Brand and Jessica Simpson footwear brands.
The shift came after management recognized the fastest footwear channel in recent years by far was brand DTC.
“While we’re investing a billion dollars in opening stores, they’re going DTC,” said Designer Brands’ CEO Roger Rawlins at an Investor Day event this past April. “Today, roughly 20 percent or one out of every five pairs of shoes are purchased direct from a brand.”
The change also reflected how online selling, mobile phones and social media are supporting a brand-direct approach. Owned brands also promise higher margins.
Owned brands also include Crown Vintage, Mix No. 6, Lucky Brand and Kelly & Katie. The brands continue to pursue third-party distribution while partnering closer with DSW. Also as part of the push to offer more exclusive product, DSW has secured North American rights to Hush Puppies and an agreement guaranteeing differentiated colors and styles exclusives with Reebok.
The Topo acquisition adds a road and trail running shoe to DSW’s mix. The retailer will also soon launch Le Tigre athletic sneakers and slides as an exclusive. The athletic deals come as Nike recently stopped selling to DSW.
In the third quarter, owned brand sales grew 25 percent, increasing share to 27 percent of Designer Brands’ revenue, versus 22 percent the prior year. The goal is to reach one-third by 2026.
DSW expects to maintain its sales in national brands. In recent years, a shift that narrowed DSW’s focus to its top 50 brands has helped strengthen relationships with key brands.
Mr. Rawlins said at Investor Day, “We are brand builders. We own and control brands that we can take DTC. We also have the top 40-or-50 brands in the world that we’re able to offer to consumers, and we have built differentiated experiences to ensure they don’t want to pick up their ball and go play with someone else.”
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