After a disappointing 2015, shoe retailer DSW is moving forward with plans to add children’s shoes to its product mix and to use its brick-and-mortar stores to fulfill online orders more efficiently, CEO Roger Rawlins told investors on a fourth-quarter earnings call.
Same-store sales grew by 0.7 percent in the fourth quarter, down from 7.6 percent in the same period in 2014. Total sales increased by 5 percent year on year to $2.6 billion in 2015. The retailer expects 2016 total revenue to grow in the 8 percent to 10 percent range, including a comparable sales increase of 1 percent to 2 percent and the opening of 32 net new stores. “We will expand deliberately into new markets, with the right banners and store format,” Rawlins said.
Online sales growth was a bright spot in 2015, Rawlins said. Digitally demanded sales grew by 22 percent in 2015, with a more than 35 percent increase in the fourth quarter. During the fourth quarter, DSW launched “buy online, pick-up in store” and “buy online, ship to store” services, helping drive the digital sales growth. “Importantly, with 70 percent of the U.S. population within 20 miles of a DSW location, we have a tremendous opportunity to leverage our brick-and-mortar network in fulfilling digital orders and providing customers with the flexibility they want,” Rawlins said.
During the fourth quarter, stores fulfilled almost 30 percent of total digital orders. “In order to take full advantage of this, we're motivating our field and building tools to maximize these omni-channel capabilities when they engage with the customer,” he said. “Stores are a huge asset to us. We have now 470 fulfillment centers that we open the door to every single day. We want to use our stores as a weapon, both in how we compete in the brick-and-mortar space, but also and more importantly, in the digital space.”
DSW is mixing up its merchandise as well, adding a children’s shoe department to 200 stores in time for back-to-school season, Rawlins said. “Our research points to a meaningful opportunity to grow DSW's presence in kids."
