Designer Brands Inc.’s (DBI) strategy to lean into its private brands is already driving growth for footwear retailer.
The DSW parent company on Thursday reported that revenue in its owned brands category was up 68% in Q1 compared to the same quarter in 2021, and represented about 25% of overall sales for the company. These results are on top of last year’s 40% growth in owned brands compared to 2020. Owned brand revenues were up 78% in wholesale channels and up 64% in DTC channels.
Overall, the footwear retailer beat sales and earnings expectations in Q1 with a net income of $26.2 million, or diluted earnings per share of $0.34. Net sales increased 18.1% to $830.5 million.
“We delivered amazing growth in our owned brands during the quarter,” said CEO Roger Rawlins in a call with investors. Many of DBI’s owned brands are focused on categories like fashion and seasonal, which Rawlins said are currently trending in terms of sales.
“Throughout 2021, we saw customer demand increase for fashion styles as COVID restrictions were dropped, infection rates decreased and events and socializing started occurring again,” Rawlins said, acknowledging how these trends directly benefited sales of DBI’s owned brands.
These strong results come shortly after DBI announced in April a goal for brand-owned sales to double from 19% of the company’s revenue to almost one-third by 2026. In 2018, DBI acquired Camuto Group, which designs and develops the Vince Camuto brand and licenses footwear for Jessica Simpson and Lucky Brand.
According to Rawlins, the company’s progress in this realm in Q1 is actually ahead of what the company expected when it laid out this plan in April. He added that DBI is seeing 15 points or more of additional margins from its owned-brands, which has allowed the company to offset certain challenges related to recent inflationary pressures.
The company has also seen success with the relaunch of its Vince Camuto brand, which saw revenues up 80% in Q1. Rawlins cited NPD Group data, which showed that Vince Camuto dollar sales grew 8 times faster than the total fashion footwear market, placing the brand among the top 15 fashion brands in Q1.
The company said it expects most of its owned-brand sales to occur in the company’s DTC channels, including DSW, Shoe Co. in Canada and vincecamuto.com. The infrastructure for this brand-owned and DTC shift was already in place, given the DBI’s established DTC channels and database of 30 million rewards members.
To further propel the growth of these brands, DSW has rolled out a revamped store of the future “Warehouse Reimagined” model which consolidates the retailer’s 20,000 to 25,000 square foot-stores into more efficient 15,000 square-foot locations and uses digital technology to tell brand stories. The company opened the first of these store prototypes on May 7 at a store in Houston.