DSW 2012 Annual Report Download - page 7

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email, direct mail and social media, to communicate exclusive offers to our customers.
As of February 2, 2013, approximately 20 million members were enrolled in “DSW Rewards” and have made at least one
purchase over the course of the last two years as compared to approximately 18 million members as of January 28, 2012. In
fiscal 2012, shoppers in the loyalty program generated approximately 89% of DSW store and dsw.com sales versus
approximately 88% of DSW store and dsw.com sales in fiscal 2011.
Growth Strategy
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 39 DSW stores in fiscal 2012, plan to open 25 to 30 DSW stores in fiscal 2013 and plan to open 15 to 20 DSW
stores in each of the following three to five years. We believe that we have the potential to operate 450 to 500 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. We also have started to include small markets as part of our growth strategy. 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.
As of February 2, 2013, we operated 364 DSW stores in 41 states, the District of Columbia and Puerto Rico. The following
table shows the number of our DSW stores by state and territory.
Alabama 4 Louisiana 2 Ohio 15
Arizona 7 Maine 1 Oklahoma 2
Arkansas 1 Maryland 13 Oregon 4
California 37 Massachusetts 14 Pennsylvania 18
Colorado 10 Michigan 15 Puerto Rico 1
Connecticut 6 Minnesota 9 Rhode Island 2
Delaware 1 Mississippi 1 Tennessee 5
Florida 25 Missouri 5 Texas 32
Georgia 14 Nebraska 2 Utah 2
Idaho 1 Nevada 3 Virginia 14
Illinois 20 New Hampshire 2 Washington 7
Indiana 8 North Dakota 1 District of Columbia 2
Iowa 1 New Jersey 15 Wisconsin 5
Kansas 2 New York 25
Kentucky 3 North Carolina 7 Total 364
We also serve customers through dsw.com in areas where we do not currently operate stores and offer current customers
additional styles, sizes, widths and categories not available in their local store. We continue to focus on the growth of dsw.com
by improving site navigation, testing a luxury business in fiscal 2013, offering online exclusive merchandise and reaching our
customers through social media.
In our Affiliated Business Group (formerly known as the leased business division), we continue to refine our merchandise
assortment to best meet the needs of our affiliated business customers. We changed the name to the Affiliated Business Group
to better reflect the broader range of retail capabilities and formats we can offer to potential partners. We actively pursue
opportunities for new affiliated business partners.
Driving Sales through Enhanced Merchandising
Our merchandising group constantly monitors current fashion trends as well as historical sales trends to identify popular
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