Designer Brands Has More Work to Do

Often, companies that are going through major transformations change their names to give themselves identities that match up more accurately with their new strategic directions. That was the case for Designer Brands (NYSE:DBI), which formerly carried the name of its DSW Shoe Warehouse unit, but which has made significant acquisitions in order to expand its market and pursue new opportunities in the footwear and accessories space.

Coming into Designer Brands’ fiscal first-quarter report, shareholders had hoped for signs that the company’s recent moves were beginning to bear fruit, and signal that the business was headed toward a full recovery. The retailer did indeed generate some enthusiasm with its report, but a closer look at the numbers shows that it has a long way to go before it can claim complete success in its restructuring efforts.

How Designer Brands started off 2019

Designer Brands’ Q1 results clearly reflected the impact of the acquisitions on the company’s overall business. The retailer posted revenue of $870 million, up 22.5% from year-ago levels. Adjusted net income of $33.6 million was up a more modest 7% over the same period, and adjusted earnings of $0.43 per share were in line with the consensus forecast among analysts following the stock.

Mosaic-designed wall with Vince Camuto sign on it.

THE VINCE CAMUTO CONCEPT IS NEW TO DESIGNER BRANDS. IMAGE SOURCE: DESIGNER BRANDS.

Overall, Designer Brands had some good things to say about its performance. Comparable sales rose 3%, and although that wasn’t as strong a gain as it reported three months ago, it was also being measured against a solid year-ago quarter. Meanwhile, its new Canada retail and brand portfolio segments contributed roughly $91 million in sales to external customers — a small, but meaningful, portion of Designer Brands’ total revenue.

The footwear and accessories retailer delivered a more mixed message on the fundamental front. On one hand, gross margin climbed by half a percentage point to 29.4% as it improved its U.S. retail unit’s efficiency. That was a nice rebound from last quarter’s gross margin decline. However, costs associated with Designer Brands’ acquisitions significantly weighed on operating profit, causing operating margin to drop to just about 5%.

CEO Roger Rawlins said he was happy with all three of Designer Brands’ key businesses. “Our DSW banner, the Shoe Company banner, and Camuto Group all performed at or above our expectations,” he said, “with the U.S. retail and [Affiliated Business Group] segments delivering positive comparable sales.” The CEO also pointed to good progress in Canada and the recent Camuto Group acquisition as encouraging signs for further growth.

Looking ahead

Designer Brands has high hopes for the future. In Rawlins’ words, “The infrastructure we have created, combined with the talent of our teams, has elevated our operating model, giving us the platform to accelerate market share growth in North America.”

The retailer let that optimism work its way into its earnings guidance: It boosted its full-year projections to a new EPS range of $1.87 to $1.97, which was $0.07 higher than its previous forecast. Elsewhere, the company didn’t make any major changes to guidance, keeping its projections for low double-digit percentage growth in revenue and low single-digit comparable sales gains.

Investors were initially quite pleased with the report, sending the stock sharply higher on Thursday following the announcement. Yet by Friday, shares had settled back down toward their recent lows. The market seemed gratified to see some progress, but at the same time, investors want more concrete signs of Designer Brands’ ability to produce lasting growth from Camuto and its Canadian operations, as well as good results domestically.

[“source=fool”]

What Does A Broadway Costume Designer Actually Do?

Ethan Hawke and Paul Dano as warring brothers in ‘True West’JOAN MARCUS

In his script for his 1980 play “True West,” Sam Shepard goes to considerable pains to describe how his central characters, two ostensibly very different brothers, are dressed.

Austin, the timid screenwriter, is wearing a light blue sports shirt, light tan cardigan sweater, clean blue jeans and white tennis shoes.

Lee, the older brother, wears a filthy white T-shirt; tattered brown overcoat covered with dust; dark blue baggy suit pants (from the Salvation Army); pink suede belt; scuffed, pointed, black forties dress shoes with holes in the soles; no socks; no hat. That’s not to mention the apparent need for long, pronounced sideburns, Gene Vincent hairdo, beard (two days’ growth) and bad teeth.

Kaye Voyce, the costume designer for the new Roundabout Theatreproduction of “True West,” starring Paul Dano as Austin and Ethan Hawke as Lee, didn’t feel at all limited by Shepard’s seeming specificity. For starters, she has Lee wearing a shiny maroon dress shirt under his tattered coat, at least at first, and gives Austin a pair of glasses.

“I don’t feel like the details he gives are prescriptive,” she says, of Shepard. “To me, they are beautiful clues to the characters and the world, and a great starting place. And those clues will mean different things to each team of designers, directors and actors. The clues helped to remind me to push for the extremes in these humans.”

“If an actor is uncomfortable it’s hard to believe it as a costume”JOAN MARCUS

Voyce describes the art of costume design, in collaboration with the director, actors and other designers, as a kind of “active collage process.” “With more contemporary clothes, it’s all about hunting down the right pieces, being open to surprise and how things are put together,” she says.

“And often, something just feels right or really wrong on someone’s body. If an actor doesn’t feel comfortable in a garment it’s really hard to believe it as a costume. Sometimes you want something to be ill-fit or a little strange—but the actor has to make the connection physically.”

Sometimes, the effect of costume design might be illuminating in a subliminal way. Asked if there was an aspect of her work on “True West” she found personally satisfying, she mentioned an aspect that, first and foremost, served the actors in their performances.

“In our conversations, we realized how central the absence of the father is in the play,” explained Voyce. “There are elements of Lee and Austin’s costumes that relate to their ideas of this man. Nobody should know it, but it means something to me and the actors.”

[“source=forbes”]