DSW 2013 Annual Report Download - page 8

Download and view the complete annual report

Please find page 8 of the 2013 DSW annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 121

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121

Table of Contents
while fulfillment takes place out of our suppliers' warehouse. We now have one vendor that fulfills DSW orders out of its warehouse, and we plan to increase
the number of vendors fulfilling drop ship orders in fiscal 2014.
The Value Proposition Offered to Our Customers
Through our buying organization, we are able to provide customers with high quality, in-season fashion styles at attractive prices compared to the sale prices
found at specialty retailers and department stores. We employ a consistent pricing strategy that provides customers with the same price on our merchandise
from the day it arrives in store until it enters our planned clearance rotation. Our pricing strategy differentiates us from our competitors who usually price and
promote merchandise at discounts available only for limited time periods. We find that customers appreciate shopping for value when it is most convenient for
them, rather than waiting for a sale event.
In order to provide additional value to our customers, we maintain a loyalty program, DSW Rewards, which rewards customers for shopping, both in stores
and online. DSW Rewards members earn reward certificates that offer discounts on future purchases. Reward certificates expire three months after being
issued. Members also receive promotional offers, gifts with purchase and free shipping on purchases over a certain dollar threshold on dsw.com. We employ a
variety of methods, including email, direct mail and social media, to communicate exclusive offers to our rewards customers.
As of February 1, 2014, approximately 22 million members were enrolled in our DSW Rewards program and have made at least one purchase over the course
of the last two years as compared to approximately 20 million members as of February 2, 2013. In fiscal 2013, shoppers in the loyalty program generated
approximately 90% of DSW store and dsw.com sales versus approximately 89% of DSW store and dsw.com sales in fiscal 2012.

Our growth strategy is to continue to strengthen our position as a leading branded designer footwear and accessories retailer by pursuing the following primary
strategies for growth in sales and profitability: expanding our business, driving sales through enhanced merchandising, investment in our infrastructure and
utilizing our financial strength.
Expanding Our Business
We opened 30 DSW stores in fiscal 2013, two of which were small format stores. Our small format stores average approximately 12,000 square feet and, if
successful, they could pave the way for more small format stores. We plan to open approximately 35 DSW stores in fiscal 2014, including six small format
stores, and plan to open 15 to 20 DSW stores in each of the following two to five years. We believe that we have the potential to operate 500 to 550 stores,
which excludes small format stores. Our plan is to open stores in both new and existing markets, with the primary focus on power strip centers and to
reposition existing stores as opportunities arise. Depending on the market, we also consider regional malls, lifestyle centers and urban street locations. In
general, our evaluation of potential new stores integrates information on demographics, co-tenancy, retail traffic patterns, site visibility and accessibility, store
size and configuration and lease terms. Our growth strategy includes analysis of every major metropolitan area in the country with the objective of
understanding demand for our products in each market over time and our ability to capture that demand. Our analysis also looks at current penetration levels
in markets we serve and our expected deepening of those penetration levels as we continue to grow and become the shoe retailer of choice.
4
Source: DSW Inc., 10-K, March 27, 2014 Powered by Morningstar® Document Research℠
The information contained herein may not be copied, adapted or distributed and is not warranted to be accurate, complete or timely. The user assumes all risks for any damages or losses arising from any use of this information,
except to the extent such damages or losses cannot be limited or excluded by applicable law. Past financial performance is no guarantee of future results.