DSW looking at smaller stores as it continues expansion

Courtesy DSW

Aug 28, 2013, 2:53pm EDT UPDATED: Aug 28, 2013, 4:16pm EDT Dan Eaton Staff reporter -Business First

DSW Inc. may get bigger by being smaller.

The Columbus-based shoe retailer this fall plans to test a store format that is roughly half the size of the DSW you’re used to shopping. The test stores will be around 10,000 square feet; the average DSW is 22,000 square feet.

“If successful, these small-format stores will create a new growth vehicle for DSW, which could significantly expand our store count potential,” CEO Mike McDonald told securities analysts this week.

He didn’t quantify that potential, but the test comes at a time when DSW (NYSE:DSW) is back in growth mode. The company expects to open 30 stores in 2013, including the two small shops, a year after it opened 39 stores – the most openings in a calendar year since 2008.

The small stores will cover all the footwear categories but hold a smaller selection.

“We will tailor these assortments to meet the needs of the local market,” McDonald said.

Sites for the test stores weren’t disclosed.

The chain runs 377 stores across the U.S. and manages the shoe departments for 351 department stores, specialty stores and boutiques, including the 39-store Loehmann’s Inc. chain, which it signed this summer.

DSW reported its second-quarter earnings Tuesday.