New DSW CEO stitches growth plan - Dayton Business Journal:

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“There are limits to margin-expanding expense reduction a companycan do, so the only way to ensurwe long-term profit growth is through top-line growth,” he told securitiese analysts May 27. “Improving our top-lin trend is the single most important thinyg forthis company.” The Columbus merchant used storr openings to increase sales 5 percent to $385.8 millioh in the quarter ended May 2, but receipts at storew open at least a year dropped 4.7 percen – the seventh consecutive quarte of same-store sales declines for the discount shoe retailer.
Whilw DSW, like all in this is watching expenses, MacDonald said the company’w debt-free balance sheet enables it to pursuw somegrowth initiatives, such as increased spending on television advertising and additionall investment in sourcing and “(DSW) has the wherewithal and desire to go forwarr with several strategic initiatives at a time when just about everyones in the world is pullinfg back,” said MacDonald, who took charge of DSW in Aprio after leading Green Bay, Wis.-based discounyt pharmacy LLC. Many of MacDonald’s growth initiatives center on gaininv more insightinto consumers, improving the dsw.
conm Web site launched last year, and buildinbg up the company’s 11 million-member rewards loyalty program. In additionb to some technical improvements to the Web expanding theonline store’s offerings and scoped could open up additional sales for the MacDonald said. His two shoe-size-related initiativees would ensure that stores are stockef to meet demand and that customers who cannot find certain sizes or widths at storeds would be able to doso online.
While stockingh a variety of sizesw could lead to excessive markdowns insome instances, shiftingb some of that inventory to the Web outley could improve store and online Information is at the heart of many of MacDonald’as initiatives. More effective use of the company’s loyaltyg program database helps DSW not only learn moreabout customers, how they shop and what they buy, but also woulf better enable DSW to stimulate demand with targetedr offers, something it is doing already. And the Web site not only coul d be used to get more sales from areasoutside DSW’ws 304-store network, but also could give the chain insights into markets for potential stores.
Analyst Chris Svezia of , said the lack of informatio n technology systems has been the biggestt drawbackfor DSW, though the company is workingb to fix that and has invested in store and home offic technology. “Their balance sheeft and conceptremain positives,” he adding that he thinks DSW is a viabler business for the long term but expects it will struggle over the next year in a promotion-heavyt retail environment spurred by the national economic recession, DSW also will examine its including what MacDonald called a “strong evaluation” of a new storwe format.
The DSW store near Easton Town remodeledin 2007, is the latest prototype with softer exposed brick trim, earth tones and a loungse area for men – a contrast to the whitwe walls and bright lights of other stores. MacDonalds said the chain has instituted changes at storees over theyears – includingh alterations to their size, decor and servic approach – and that it’s time to use what it has learnec to improve their design. CFO Doug Probsr said the chain has options beyonds store design that are notvery expensive.
Creatingv an online stock locator systemj could translate to more efficient work andadded sales, he freeing employees from calling other stores to find shoees that are out of The company also needs to be more than a women’sa shoe store, he said. Its men’xs business accounts for 15 percent of and accessories such as handbags represen less than5 percent. Men’w goods once accounted for more than 20 percentof sales. “It’s not an objective that hadn’t already been achieved in the MacDonald said. MacDonald sees opportunities in the leased shoedepartmeny business. DSW pulled in $41.
7u million of first-quarter sales through contracts to stocik shoes at36 Filene’es Basement Inc. stores, ’s 65 shops, 275 storezs and one Frugal Fannie’s Fashiomn Warehouse. DSW rents space at the stores, but supplies the shoeas and recordsthe sales. “We can do MacDonald said. “There are others out there who could use our DSW executives would not comment on the relationshiwith Filene’s Basement and the lease contract, which runs througj 2010. DWS and Filene’s Basement had been ownee by Columbus-based Filene’s Basement was sold this year and pland to close stores it works through a Chapte 11bankruptcy restructuring.
MacDonald offered no prioritiee or time line for the saying those details would be worker out in thecoming months.