DSW parent company Designer Brands, Inc. (DBI) is the latest retailer to turn up the volume on its private label business in hopes of driving long-term growth, saying that it wants to transform from a “retailer to a brand builder.”
The company — which operates 650 locations under the DSW Designer Shoe Warehouse and The Shoe Company banners —announced plans to nearly double sales of its owned brands, from 19% of the business to one-third by fiscal 2026 (the fiscal year ending January 30, 2027). The focus on private label is part of long-term growth plan that also includes leveraging data analytics to enhance the customer experience and evolving the company’s relationships with its national brand partners, which “utilize our leading omnichannel capabilities in their own DTC efforts in ways unique to DBI,” said Roger Rawlins, CEO of DBI in a statement.
The goal is to hit $4 billion in revenue with an operating margin of 9% (which would be an improvement of over 200 basis points) by the end of fiscal 2026. DBI expects the margin increases to be driven primarily by its renewed focus on private label sales, most of which happen in its own DTC channels.
“At Designer Brands, we have truly taken control of our destiny as we have transformed into a brand builder, marrying our world-class design and sourcing capabilities to our industry leading direct-to-consumer infrastructure,” said Rawlins. “We know our customers like our best friends, and utilize the data, feedback and insights gleaned from our nearly 30 million loyalty members to efficiently design top quality product suited specifically for them, and engaging with them in innovative ways across any and all mediums they desire.”
Rawlins also cited the retailer’s ” updated and differentiated assortment” and the ways its sourcing and supply chain capabilities resulted in “quicker speed to market with new designs and faster delivery times.”
DBI joins a growing swath of major retailers looking to the higher margins from private label to support growth as supply chain snags and rising inflation put pressure on businesses:
- Bed Bath & Beyond debuted eight new owned brands in fiscal 2021 and announced it is now planning new private label offerings under the buybuy BABY banner as well;
- Petco continues to expand its private label brand Reddy, most recently with a concept flagship in NYC’s SoHo;
- JCPenney expanded its owned brand Stylus to include men’s apparel and accessories;
- DICK’S Sporting Goods expanded into athleisure via the private label men’s brand VRST; and
- We can’t forget Target, which now has a whopping 47 private label brands, 10 of which generate more than $1 billion annually each.