Dive Brief:

• Designer Brands on Thursday announced that the company will eliminate over 1,000 positions, including about 380 corporate staff and 700 store roles, according to a message from CEO Roger Rawlins. 
• Designer Brands, which owns companies including Designer Shoe Warehouse (DSW) and Camuto Group, said that many of the positions that are being eliminated were vacant. However, around 250 corporate and 100 store associates are exiting the company, while 550 store associates are being given the option of a different role or they may choose to leave. 
• The retailer also announced a reorganization that will require more warehouse rolls and fewer sales floor positions. Designer Brands is moving to further integrate the Camuto Group into the larger organization, and will close its Sole Society brand. 

Dive Insight:

When the pandemic hit the United States and it began to divide retail into companies that were essential versus nonessential, Designer Brands said it would lean into e-commerce. 

In late March, the retailer planned to push further into its digital channels by continuing to operate its distribution and IT centers. "We are an e-commerce retailer with the reach of 700 fulfillment points and multiple websites to serve our customers across North America," Rawlins said at the time. 

Even then a large swath of its workforce was left vulnerable, as the company instituted a temporary leave of absence for over 80% of its workforce, where employees did not receive pay. Those employees who weren't furloughed had their pay reduced, including a 20% base salary cut for executives.

But the prolonged closures of its brick-and-mortar locations combined with a public that is still wary about nonessential spending, pushed the company to take dramatic steps. "While online orders were strong during the closures, e-commerce/digital sales cannot make up for in-store sales," Rawlins said, adding that shopping habits have not yet returned in full. "The reality is we are now living in a new normal. It's a new day and we must operate in a new way." 

The company in June said that it would consolidate its business with drastically fewer vendors, with a focus on its top 50 footwear brands. "We're going to invest our inventory dollars, meaning owned inventory, into these top 50-ish brands that are the ones that the consumer demands," Rawlins said at the time on an earnings call with analysts.

Other current go-forward measures include postponing new store openings and cutting operating expenditures.