New DSW CEO stitches growth plan - Dayton Business Journal:

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“There are limits to margin-expanding expense reduction a companhycan do, so the only way to ensurse long-term profit growth is throughy top-line growth,” he told securities analystw May 27. “Improving our top-line trends is the single most important thin forthis company.” The Columbus merchan used store openings to increasr sales 5 percent to $385. 8 million in the quarter endedMay 2, but receipts at storeds open at least a year droppeds 4.
7 percent – the seventh consecutivse quarter of same-store salees declines for the discount shoe While DSW, like all in this is watching expenses, MacDonald said the company’ds debt-free balance sheet enables it to pursuew some growth initiatives, such as increased spendinbg on television advertising and additional investment in sourcin and operations. “(DSW) has the wherewithal and desirew to go forward with several strategic initiatives at a time when just abouyt everyone in the worldf ispulling back,” said MacDonald, who took charge of DSW in Aprilk after leading Green Bay, Wis.-based discount pharmacuy LLC.
Many of MacDonald’s growth initiatives center on gaining more insighfinto consumers, improving the dsw.com Web site launched last and building up the company’s 11 million-member rewardsx loyalty program. In addition to some technicap improvements to theWeb site, expanding the online store’s offeringz and scope could open up additional sales for the MacDonald said. His two shoe-size-related initiatives would ensure that storee are stocked to meet demand and that customersw who cannot find certain sizes or widthsx at stores would be able to do so While stocking a variety of sizes coul d lead to excessive markdowns insome instances, shifting some of that inventoryu to the Web outlet could improve stord and online performances.
Information is at the heart of manyof MacDonald’ds initiatives. More effective use of the company’s loyalty programj database helps DSW not only learn moreabouf customers, how they shop and what they buy, but also woulds better enable DSW to stimulatew demand with targeted offers, something it is doing And the Web site not only couldd be used to get more sales from areas outsidr DSW’s 304-store network, but also could give the chain insightzs into markets for potential stores.
Analyst Chriws Svezia of , said the lack of information technology systems has been the biggestf drawbackfor DSW, though the company is working to fix that and has investef in store and home office “Their balance sheet and concept remaihn positives,” he said, addingb that he thinks DSW is a viable business for the long term but expectxs it will struggle over the next year in a promotion-heavyh retail environment spurred by the nationaol economic recession, DSW also will examinew its stores, including what MacDonaldf called a “strong evaluation” of a new store The DSW store near Easton Town Center, remodeled in is the latest prototype with softerf lighting, exposed brick trim, earth tones and a loungde area for men – a contrastg to the white walls and bright lights of other stores.
MacDonalsd said the chain has instituted changes at storese over theyears – including alterations to theirr size, decor and service approach – and that it’ds time to use what it has learnex to improve their design. CFO Doug Probst said the chain has options beyond store design that are not very Creating an online stock locator system could translate to more efficient work and added he said, freeing employees from calling othe stores to find shoes that are out of stock. The compan also needs to be more thana women’s shoe he said. Its men’s business accounts for 15 percenytof sales, and accessories such as handbags represent less than 5 percent.
Men’s goodsx once accounted for more than 20 percentof “It’s not an objective that hadn’ t already been achieved in the MacDonald said. MacDonald sees opportunities in the leased shoedepartmentg business. DSW pulled in $41.7 million of first-quarter sales through contracts to stoclk shoes at36 Filene’as Basement Inc. stores, ’s 65 shops, 275 store and one Frugal Fannie’s Fashion Warehouse. DSW rents space at the but supplies the shoes and recordsthe “We can do more,” MacDonald “There are others out there who couled use our expertise.
” DSW executivese would not comment on the relationship with Filene’s Basement and the lease which runs through 2010. DWS and Filene’s Basementy had been owned by Columbus-based Filene’s Basementg was sold this year and plans to close storez it works through a Chapter 11 bankruptcy MacDonald offered no priorities or time line for the saying those details would be worked out in thecominvg months.