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Wake up, babe. A new DSW store just dropped.
Over the weekend, the company opened a new concept store in Houston called “Warehouse Reimagined.” And there’s a lot going on.
House of brands
The store is smaller than a typical DSW (15,000 square feet vs. 20,000+ square feet), and—in addition to featuring names like Adidas, Birkenstock, and New Balance in dedicated spaces—it’s a chance for parent company Designer Brands to showcase its own brands, like Vince Camuto and Lucky Brand.
- The owned and national brands have displays that function like a shop-in-shop concept.
- Warehouse Reimagined also has spots for pickups and returns, as well as mobile product displays.
“We continue to see the evolution of how [customers] want to be engaged, where they want to be engaged, and ultimately how they want to shop,” Jared Poff, EVP and CFO at Designer Brands, told Retail Brew. “This is just us following that evolution and really marrying up what continues to be a combination of wanting a completely seamless, immersive experience that crosses the digital platform, as well as the physical platform.”
- Poff mentioned the company is eyeing adding capabilities that let customers check out with their phones.
Name game: The name was a shoe-in. The “warehouse” component refers to how the company has used its stores over the past four years, and this concept will be no different. Last year, Designer Brands’s digital sales crossed the $1 billion threshold for the first time. Of that, 60% of orders were shipped from a local store in a customer’s neighborhood.
- It helps that 70% of the US population is within 20 minutes of a DSW location, Poff noted.
“Even if it’s a dropship order—something that they’re buying from a national brand that we don’t carry the inventory in—we just make the product available digitally for them to see it,” he said. “They can still have that delivered to a store if they want to do a buy online, pick up in store. For those reasons, we continue to say they aren’t just a showroom; they are a warehouse.”
Looking ahead…Warehouse Reimagined could play a crucial role in Designer Brands’s long-term growth strategy. In 2021, the company’s owned brands accounted for 19% of $4 billion in total revenue. DB wants to double that to nearly a third by 2026.
- Designer Brands also wants to reduce its occupancy costs by 14% over the next five years, Poff noted. So, if Warehouse Reimagined proves to be successful, the company could reduce the footprint of some of its 700+ stores and introduce elements of the concept, like those mobile product displays.
“Increasingly, DTC shipping is a headwind that we have to overcome,” Poff said. “The way we get to that is not closing a bunch of stores. It’s optimizing and reducing square footage in some of our larger, oversized stores.”