DSW wants to get to $300 per square foot, and expects to get there through smaller, more productive stores and smarter real estate decisions. Last year's sales per square foot was $218.
Speaking at the Wedbush Morgan investor conference, Doug Probst, DSW's EVP, CFO and treasurer, said half the chain averages $300 a foot, so much of the improvement will be fine-tuning real estate selection. “We have to pick better real estate, get rid of those stores that are being unproductive, and reach towards this goal,” said Probst.
But DSW is now looking to open 15,000 to 17,000 square foot stores over its traditional 25,000 square foot ones. The stores will continue to hold the same average of 30,000 pairs and 2,000 styles as the larger stores through more efficient use of space. Among the ways DSW has reduced space has been by establishing a register bar over grocery-type register setup, shrinking front office space and moving it to the back of the store, and foregoing a front window in order to pile product against the front wall.
“The big difference there is that we're opening stores that still have the same amount of inventory, but in a much more productive use of the space, which enables us to decrease our size, increase our sales productivity, and increase the margins because we're turning the inventory faster,” said Probst.
DSW currently has 255 stores with a goal of reaching 400, but the smaller formats may enable DSW to open stores well above that number.
