What changed in this filing

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Item 1. Business

2024-03-25 compared with 2023-03-16 · 151 added, 143 removed, 98 unchanged (75% of the section changed)

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Together, the U.S.

Retail and Canada Retail segments are referred to as the "retail segments." The Brand Portfolio segment earns revenue from the wholesale of products to retailers and international distributors, commissions for serving retailers as the design and buying agent for products under private labels (referred to as "First Cost"), and the sale of branded products through our direct-to-consumer e-commerce sites at www.vincecamuto.com and www.topoathletic.com.

Retail and Canada Retail segments are referred to as the "retail segments." The Brand Portfolio segment earns revenue from the wholesale of products to retailers and international distributors, commissions for serving retailers as the design and buying agent for products under private labels, and the sale of branded products through our direct-to-consumer e-commerce sites for the Vince Camuto, Keds, Hush Puppies, and Topo brands.

Our fiscal year ends on the Saturday nearest to January 31.

References to a fiscal year (e.g., "2023") refer to the calendar year in which the fiscal year begins.

This reporting schedule is followed by many national retail companies and typically results in a 52-week fiscal year, but occasionally will contain an additional week resulting in a 53-week fiscal year (including 2023).

This reporting schedule is followed by many national retail companies and typically results in a 52-week fiscal year (including 2022), but occasionally will contain an additional week resulting in a 53-week fiscal year (including 2023).

RETAIL SEGMENTS

We offer a wide assortment of dress, casual, and athletic footwear and accessories for women, men and kids, with a significant number of our products geared toward athletic and kids.

• DSW Designer Shoe Warehouse- Our DSW banner, which is offered both in the United States ("U.S.") and in Canada, is the destination for on-trend and fashion-forward footwear and accessory brands at a great value every single day, offering a wide assortment of dress, casual, and athletic footwear and accessories for women, men and kids.

We offer a wide assortment of dress, casual, and athletic footwear and accessories for women, men and kids under the following banners:

• The Shoe Company- The Shoe Company banner in Canada offers on-trend footwear and accessory brands that target every-day family styles at a great value every single day.

Our e-commerce platforms offer customers convenient, 24/7 access to our products through our websites, www.dsw.com, www.dsw.ca, and www.theshoecompany.ca, with mobile-optimized sites, and our mobile DSW application.

Our e-commerce platforms offer customers convenient, 24/7 access to our products through our websites, including mobile-optimized sites, and our mobile DSW application.

Our omni-channel capabilities allow customers to order a wide range of styles, sizes, widths and categories.

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Online orders from the U.S.

can also be fulfilled from our distribution center located in New Jersey, which is a shared facility with the Brand Portfolio segment ("East Coast Logistics Center"), or directly from our vendors (referred to as "drop ship").

can also be fulfilled from our distribution center located in New Jersey ("East Coast Logistics Center") , which is a shared facility with the Brand Portfolio segment , or directly from our vendors (referred to as "drop ship").

Our order routing optimization system determines the best location to fulfill digitally-demanded products, which allows us to optimize our operating profit.

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Likewise, returns may be shipped to us or brought back to any of our locations.

We sell a large assortment of national brands and brands we have rights to sell through ownership or license arrangements, which we refer to as "Owned Brands." During 2022, we made progress in our long-term goal of doubling the net sales from our Owned Brands by 2026 (using 2021 net sales as a baseline), while maintaining our net sales from national brands.

We expect this long-term goal will result in approximately one-third of our total net sales coming from Owned Brands by 2026.

We believe that increasing net sales from our Owned Brands products will not only drive growth and expand our gross margin, but will also elevate our presence as a brand builder.

In addition to disaggregating our net sales between Owned Brands and national brands, we disaggregate our net sales into four primary categories:

In the retail segments, we sell a large assortment of national brands and brands we have rights to sell through ownership or license arrangements, which we refer to as "Owned Brands." We believe that offering a robust assortment of our Owned Brands alongside top national brands within the retail segments provides our customers with a unique assortment and allows us to lean into our integrated business model for providing value.

In addition to disaggregating our net sales between Owned Brands and national brands, we disaggregate our net sales for our retail segments into four primary categories:

women's footwear, men's footwear, kids' footwear, and accessories and other.

Refer to Note 3 , Revenue , of the Consolidated Financial Statements of this Form 10-K, for the disaggregation of total net sales.

The following table presents certain data about the sourcing of our merchandise:

Refer to Note 3 , Revenue , of the consolidated financial statements of this Form 10-K for the disaggregation of net sales.

The following table presents certain data about the sourcing of our merchandise for our retail segments:

Number of unrelated third-party merchandise vendors at end of fiscal year 412 420

Percentage of purchases from:

Brand Portfolio segment, including wholesale purchases and First Cost sourced Owned Brands 8 % 9 %

Brand Portfolio segment sourced Owned Brands 9 % 8 %

Top three national brand vendors 21 % 22 %

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We invite customers to join our VIP rewards programs, which enable members to earn points toward discounts on future purchases.

Our VIP rewards programs provides timely customer insights and creates stronger customer engagement, while driving a higher-than-average level of customer spend.

Our VIP rewards programs provide timely customer insights and create stronger customer engagement, while driving a higher-than-average level of customer spend.

The following table presents the number of members enrolled in our loyalty programs that have made a purchase over the prior two years and the percentage of retail segments' net sales generated from these members:

Number of VIP members at end of fiscal year (in millions) 32.1 28.2

Number of VIP members at end of the fiscal year (in millions) 32.1 32.1

Percentage of retail segments' net sales generated from VIP members 90 % 89 %

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drop ship program, inventory is shipped from our vendors' warehouses directly to our customers.

Inventory management is important to our business, we manage our inventory levels based on anticipated sales and the delivery requirements of our customers.

Inventory management is important to our business.

We manage our inventory levels based on anticipated sales and the delivery requirements of our customers.

Our inventory management strategy is focused on continuing to meet consumer demand, while improving our efficiency over the long term by enhancing systems and processes.

BRAND PORTFOLIO SEGMENT

Our Brand Portfolio segment designs, develops, and sources in-season fashion footwear and accessories for the sale of wholesale merchandise to our retail segments and our other retailer customers.

Our First Cost model earns commission-based income for serving retailers as their design and buying agent, while leveraging our overall design and sourcing infrastructure.

In addition, we sell our branded products on a direct-to-consumer e-commerce site at www.vincecamuto.com.

The Brand Portfolio segment designs, develops, and sources footwear and accessories of our Owned Brands for the sale of wholesale merchandise to our retail segments and our other retailer customers.

We also earn commission-based income for serving retailers as their design and buying agent, while leveraging our overall design and sourcing infrastructure.

In addition, we sell our branded products on direct-to-consumer e-commerce sites for the Vince Camuto, Keds, Hush Puppies, and Topo brands.

Refer to Note 3 , Revenue , of the consolidated financial statements of this Form 10-K, for the Brand Portfolio segment's total net sales attributable to each channel.

The Brand Portfolio segment has four customers that make up approximately 53% of its total net sales, excluding intersegment net sales.

The loss of any or all of these customers could have a material adverse effect on the Brand Portfolio segment.

LICENSING RIGHTS

Our equity investments in ABG-Camuto, LLC ("ABG-Camuto") and Le Tigre 360 Global LLC ("Le Tigre") are an integral part of the Brand Portfolio segment.

In partnership with Authentic Brands Group LLC, a global brand management and marketing company, we have a 40% ownership interest in ABG-Camuto, a joint venture that owns the intellectual property rights of Vince Camuto and others.

ABG-Camuto is responsible for the growth and marketing of the brands held by the joint venture.

We have entered into a licensing agreement with ABG-Camuto, whereby we pay royalties to ABG-Camuto based on the sales of licensed products, subject to guaranteed minimums.

ABG-Camuto also earns royalties on sales from third parties that license the brand names to produce non-footwear product categories.

In July 2022, we acquired a 33.3% ownership interest in Le Tigre, which manages the Le Tigre brand, for $8.2 million.

We entered into a license agreement with Le Tigre, whereby we pay royalties on our net sales from the Le Tigre brand, subject to guaranteed minimums.

The license agreement provides for the exclusive right to design, source, and sell Le Tigre branded footwear .

W e recognize equity investments and earnings under the equity method within the Brand Portfolio segment.

In addition, we own the licensing rights for footwear of the Jessica Simpson brand and for footwear and handbags of the Lucky Brand.

The Brand Portfolio segment has five customers that made up 40.0% of its segment net sales in 2023, excluding intersegment net sales, and the loss of any or all of these customers could have a material adverse effect on the Brand Portfolio segment.

Using 2021 net sales as a baseline, we have a long-term goal of doubling the net sales from our Owned Brands by 2026 for all of our segments combined, while maintaining our net sales of national brands in our retail segments.

We expect this long-term goal will result in approximately one-third of our total net sales coming from Owned Brands by 2026.

During 2023 and 2022, the net sales of Owned Brands represented 25.8% and 25.5%, respectively, of consolidated net sales, compared to a baseline of 19.6% from 2021.

We believe that increasing net sales from our Owned Brands products will not only drive growth and expand our gross margin but will also elevate our presence as a brand builder.

Refer to Note 3 , Revenue , of the consolidated financial statements of this Form 10-K, for the disaggregation of net sales.

Equity Investments and Licensing Rights- Our equity investments in ABG-Camuto, LLC ("ABG-Camuto") and Le Tigre 360 Global LLC ("Le Tigre") are an integral part of the Brand Portfolio segment.

We have a 40.0% ownership interest in ABG-Camuto, a joint venture that owns the intellectual property rights of Vince Camuto and other brands.

We are party to a licensing agreement with ABG-Camuto, which grants us the exclusive right to design, source, and sell footwear and handbags under the brands that ABG-Camuto owns.

In July 2022, we acquired a 33.3% ownership interest in Le Tigre, which manages the Le Tigre brand.

We are also party to a license agreement with Le Tigre, which grants us the exclusive right to design, source, and sell Le Tigre-branded footwear.

In addition, we own the licensing rights for footwear and handbags of the Lucky Brand and the licensing rights for footwear of the Jessica Simpson brand and, beginning in 2023, the Hush Puppies brand.

Acquisitions- On December 13, 2022, we acquired a 79.4% ownership interest in Topo Athletic LLC ("Topo").

Topo is a designer of specialty athletic footwear that sells its Topo branded products at wholesale to retailers and international distributors and through its direct-to-consumer e-commerce site.

The Topo acquisition provides us with expanded capabilities within the athletic footwear market.

On February 4, 2023, we acquired the Keds business ("Keds"), including the Keds brand, inventory, and inventory-related accounts payable, from Wolverine World Wide, Inc.

The Keds business designs, sources, and sells branded footwear at wholesale to retailers and international distributors and through its direct-to-consumer e-commerce sites.

SOURCING AND DISTRIBUTION

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The majority of our wholesale inventory is shipped directly from factories in foreign countries to our East Coast Logistics Center where the inventory is then processed, sorted, and provided to our customers' shipping carriers.

The following table presents the percentages of the Brand Portfolio segment's merchandise units sourced by country:

The following table presents the percentages of the Brand Portfolio segment's purchases of merchandise units sourced by country:

China 76 % 76 %

Vietnam 10 % 9 %

India 5 % 4 %

Cambodia 5 % 1 %

Brazil 3 % 9 %

All other foreign locations 1 % 1 %

On December 13, 2022, we acquired a 79.4% ownership interest in Topo Athletic LLC ("Topo") for $19.1 million.

Topo is a designer of specialty athletic footwear that sells its Topo branded products at wholesale to retailers and international distributors and through its direct-to-consumer e-commerce site at www.topoathletic.com.

The Topo acquisition provides us with expanded capabilities within the athletic footwear market.

On February 4, 2023, we acquired the Keds business, including the Keds brand, inventory, and inventory-related accounts payable, from Wolverine World Wide, Inc.

for $123.3 million.

The Keds business designs, sources, and sells branded footwear and earns revenue from the wholesale of products to retailers in the U.S.

and Canada, the wholesale of products to international distributors, and the sale of branded products through direct-to-consumer e-commerce sites in the U.S.

We will account for the acquisition and include the results of the Keds business in our Brand Portfolio segment beginning with our first quarter of 2023.

The footwear market is highly competitive with few barriers to entry.

We compete against a diverse group of manufacturers and retailers, including department stores, mall-based shoe stores, national chains, independent shoe retailers, single-brand specialty retailers, online shoe retailers, brand-oriented discounters, multi-channel specialty retailers, and brand suppliers.

We compete against a diverse group of manufacturers and retailers, including department stores, online retailers, mall-based shoe stores, national chains, independent shoe retailers, single-brand specialty retailers, brand-oriented discounters, multi-channel specialty retailers, and brand suppliers.

In addition, our wholesale retailer customers sell shoes purchased from competing footwear suppliers with brands that are well known.

CHIEF EXECUTIVE OFFICER TRANSITION

In January 2023, we announced our planned succession process relating to the Company's CEO role, whereby our current CEO, Roger Rawlins, will step down from his role as CEO and as a member of the Board of Directors effective April 1, 2023, or such earlier date as determined by the Board of Directors, at which time Doug Howe, who currently serves as Executive Vice President of the Company and President of DSW, will assume the CEO role and join the Board of Directors as a Class II director.

To assist in facilitating a smooth transition, Mr.

Rawlins will remain employed under the terms of a transition and consulting agreement through April 1, 2023 and, for the 12-month period thereafter, will serve as a strategic advisor to the Company and the Board of Directors.

In January 2023, we announced our succession process relating to the Company's Chief Executive Officer ("CEO") role whereby our former CEO, Roger Rawlins, stepped down from his role as CEO and as a member of the Company's Board of Directors (the "Board") effective April 1, 2023, at which time Doug Howe, who previously served as Executive Vice President of the Company and President of DSW, assumed the CEO role and joined the Board.

As previously disclosed, Mr.

Rawlins commenced service as a strategic advisor to the Company and the Board effective April 1, 2023 and will continue in this role through April 1, 2024 under the terms of a transition and consulting agreement.

HUMAN CAPITAL MANAGEMENT

We believe the strength of our workforce is critical to our success.

Our associates strive every day to create a welcoming and inclusive environment for themselves and our customers.

Our associates strive every day to create a welcoming and inclusive environment for themselves and our customers to advance our mission of inspiring self-expression.

One of our core strategies is to invest in and support our associates who are key to differentiating our products and experiences in the competitive footwear market.

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• reward and support associates through competitive pay, benefits, and perquisite programs;

• enhance our culture through efforts aimed at making the workplace more engaging and inclusive;

• cultivate an associate-centric culture where our associates feel empowered, valued, inspired, and included;

• acquire talent and facilitate internal talent mobility to create a high-performing diverse workforce;

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• evolve and invest in technology, tools, and resources to support our associates at work.

As of January 28, 2023, we employed approximately 14,000 people worldwide, 12,000 of whom are employed in the U.S.

As of February 3, 2024, we employed approximately 14,000 associates worldwide, approximately 12,000 of whom are employed in the U.S.

TOTAL REWARDS

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We have a history of investing in our workforce and offer comprehensive, relevant, and innovative benefits to eligible associates in the U.S.

• We strive to provide market competitive wages and salaries, targeting the middle of the market in most cases.

Compensation-

• We strive to provide market competitive pay targeting the middle of the market in most cases.

• We establish a minimum starting pay rate for each U.S.

store that exceeds applicable minimum wage requirements.

• To compete for local distribution center talent, we provide a peak season incentive bonus and continually monitor local pay practices.

• Our incentive plans provide additional cash compensation upon the achievement of results that exceed defined Company goals and are available to eligible store management, distribution center, and corporate support center associates.

• We provide stock-based, long-term incentives for senior executives through the director level that align with the interests of shareholders.

• We provide retirement benefits through our 401(k) plan, with employer matching contributions up to 4% of associate contributions.

Health & Wellness

• For most of 2022, we continued the COVID-19 paid leave policy that provided up to one week of pay for associates who contracted the virus, were involuntarily quarantined, were experiencing side effects from obtaining a vaccine, or were without work due to changes in store hours because of direct or indirect impacts of the virus.

The policy was deemed to no longer be necessary in October 2022;

however, we continue to follow all applicable COVID-19 local paid leave regulations.

• In 2022, we added a new paid time off benefit for our approximately 9,000 U.S.

part-time associates that enables them to take time off with pay if sick, to care for a family member, or to enjoy a break from work.

• In 2022, we added a medical access travel benefit that reimburses up to $4,000 per year for eligible travel expenses when it is necessary for an associate or dependent enrolled in a medical plan to travel 100 miles or more from home to obtain access to covered medical care.

• Comprehensive health insurance coverage is available to all full-time associates through multiple medical plans, which also include prescription and vision insurance.

Dental coverage is also available.

• Other benefits provided to associates and their dependents who are enrolled in a medical plan include the following:

◦ Concierge care coordinators and nurses who can assist with clinical support for health conditions, locate high quality doctors, advocate to resolve insurance billing issues, connect members to available community resources, and answer member benefit questions.

◦ Free unlimited telemedicine access to U.S.

• To be competitive for logistics center talent, we increased the start rates in 2023 and continually monitor local pay practices.

• We monitor pay equity and invest in pay processes that allow us to assess whether associates with similar roles and experience earn equal pay for comparable work.

• We provide a Compensation Essentials training module that educates and equips managers to facilitate healthy conversations about compensation.

Every manager is expected to complete this training.

• Our incentive plans provide additional cash compensation upon the achievement of results that meet or exceed defined goals for eligible store management, logistics centers, and corporate associates.

• We provide retirement benefits with a safe harbor 401(k) plan that includes an employer matching contribution of up to 4% of associate contributions.

Health & Wellbeing- We understand the importance of taking care of our associates and that every associate's journey is unique.

Our inclusive benefits approach provides support and resources needed to care for them and their loved ones.

We invest in comprehensive health and wellbeing benefits that help attract and retain the talent necessary to achieve our goals, some of which are highlighted below.

Comprehensive health insurance coverage is available to full-time and Affordable Care Act eligible part-time associates through multiple medical plans.

These plans include prescription and vision insurance, as well as:

• Concierge care coordinators and nurses who can assist with clinical support for health conditions, locate high-quality physicians, advocate to resolve insurance billing issues, connect members to available community resources, and answer member benefit questions.

• Free unlimited access to U.S.

board-certified physicians, via phone or video, for general medical, dermatology, and mental health services.

◦ Specialty prescription drug medications with most at no cost to enrolled associates and their dependents.

◦ Fertility services that provide concierge support and access to leading fertility centers of excellence across the nation.

Our medical plan covers up to two cycles of IVF or other fertility services in addition to necessary fertility medication and testing.

◦ Maternity program that provides resources and support to expecting mothers through expert nurse care coordinators throughout their pregnancies.

• Multiple types of paid leave are provided at no cost to associates.

Full-time associates receive short-term disability income replacement pay, as well as paid parental leave, and jury duty pay.

All associates are eligible for military pay and bereavement pay.

• Voluntary benefits (long-term disability, accident, hospital indemnity, and critical illness) and flexible spending accounts are available to full-time associates to support their financial needs.

• Free counseling is available to all associates, their dependents, and their family members 24/7/365, including access to licensed counselors, work/life balance support, and bereavement specialists.

• Free legal help is available to all associates in areas such as civil/criminal needs, family disputes, immigration law, landlord/tenant issues, and basic document preparation.

• Free financial help, including debt counseling, lease/purchase guidance, taxes, financial planning, and college funding, is available to all associates.

• Adoption assistance is available to all full-time associates with reimbursement up to $10,000 of eligible exp enses for each adoption.

• Free accredited, general education college courses, as well as discounted tuition offerings through multiple partner schools, are available to all associates.

• Up to $5,250 in tuition reimbursement per year i s available to all full-time associates to provide the opportunity to take classes or earn a degree.

• Up to seven days of free backup childcare per year is provided to all full-time associates who need emergency childcare services for any reason.

• All associates are provided free access to a national resource network to locate babysitters and nannies, who have been cleared by a background check, as well as discounts on tutoring, day care centers, and pet sitters.

• Discounts on DSW, American Eagle Outfitters/Aerie, and American Signature/Value City Furniture products are available to all associates.

• Associate accomplishments and work anniversaries, starting with one year of service, are recognized and rewarded through our "Inspire Greatness" recognition program.

• Specialty prescription drug medications, with many at no cost.

• Concierge support and access to fertility centers across the U.S.

as well as up to two cycles of in vitro fertilization or other fertility services in addition to necessary fertility medication and testing.

• Expert nurse care coordinator support provided through our maternity program.

• Medical access travel benefits for those who must travel greater than 100 miles from home to obtain access to covered medical care.

All full-time associates are eligible for:

• Company subsidized dental insurance.

• Company-provided life and accidental death and dismemberment insurance.

• Pay for short-term disability, parental leave, and jury duty.

• Voluntary benefits (long-term disability, accident, hospital indemnity and critical illness) and flexible spending accounts.

• Adoption assistance with reimbursement of up to $10,000 of eligible expenses for each adoption.

• Up to $5,250 in tuition reimbursement annually, plus access to partner schools who offer capped annual tuition to receive a degree at little to no cost when combined with our reimbursement.

All full-time and part-time associates are eligible for:

• Company paid time off, military, and bereavement pay.

• Generous product discounts at DSW, American Eagle Outfitters/Aerie, and American Signature/Value City Furniture.

• Free counseling for all associates, their dependents, and their family members, including access to licensed counselors, work/life balance support, and bereavement specialists.

• Free accredited general education college courses as well as discounted tuition offerings through multiple partner schools.

• Discounted legal support in areas such as civil/criminal needs, family disputes, immigration law, landlord/tenant issues, and basic document preparation.

• Free financial help including debt counseling, lease/purchase guidance, taxes, financial planning, and college funding.

TALENT DEVELOPMENT

To help our associates succeed in their roles, we emphasize continuous learning and development opportunities.

Training provided through our online learning platform includes nearly 250 resources such as videos, self-paced on-demand learning, and virtual instructor-led sessions.

Training provided through our online learning platform includes nearly 240 resources, including videos, self-paced on-demand learning, and virtual instructor-led sessions.

A wide variety of resources are designed to address the needs of our entire workforce, from entry-level associates to our most senior executives.

During 2022, 11,500 associates completed approximately 100,000 learning experiences through our online learning platfor m.

During 2023, over 8,000 associates completed approximately 80,000 learning experiences through our online learning platfor m.

We invest resources in professional development and growth as a means of improving associate performance, engagement, and retention.

We believe that our continued focus on frequent and constructive performance feedback, talent reviews, succession planning, and retention have contributed to a strong internal promotion rate.

PHILANTHROPY THROUGH DBI GIVES

The Company is committed to good corporate citizenship.

Not only do we strive to create positive impacts within our organization, but we aim to better the communities in which we conduct business through DBI Gives, our philanthropic community interest group.

DBI Gives' mission is to inspire community involvement and enhance associate engagement and has three main areas of focus:

PHILANTHROPY THROUGH DESIGNER BRANDS FOUNDATION

We are committed to good corporate citizenship.

Not only do we strive to create positive impacts within our organization, but we aim to better the communities in which we conduct business.

In 2023, we officially launched our charitable Designer Brands Foundation to expand our corporate giving.

The Designer Brands Foundation's mission is to advance empowerment of individuals, removing barriers, and helping them put their best foot forward in the diverse communities in which we live, serve, and work.

The Designer Brands Foundation features three primary areas of focus:

Empowerment - Support organizations that prioritize empowerment and build self-confidence without discrimination.

Diversity, Equity & Inclusion - Support organizations whose key constituents align with the diversity dimensions represented by our Business Resource Groups ("BRGs").

Community - As the places where our associates live and work mean everything to us, we support the organizations that put our local communities first and provide opportunities for our associates to give back through volunteering and donations.

DBI Gives has three primary areas of partnership:

Soles4Souls - Soles4Souls creates sustainable jobs and provides relief through the distribution of shoes and clothing around the world, while giving shoes and garments a second life and keeping them out of landfills.

Since partnering with Soles4Souls in 2018, we are proud to have donated over 7 million pairs of shoes, including 1.6 million pairs donated in 2022.

I n 2022, we focused our register donation efforts to support Soles4Souls, generating over $600,000 in customer-funded donations.

Two Ten Footwear Foundation - Two Ten provides scholarships and financial aid to people working in the footwear industry, as well as free counseling and community resources.

Diversity, Equity & Inclusion ("DE&I") - Support organizations whose key constituents align with the diversity dimensions represented by our Business Resource Groups ("BRGs").

Community - As the places where our associates live and work are vitally important to us, we support the organizations that put our local communities first and provide opportunities for our associates to give back through volunteering and donations.

DBI Gives, our philanthropic Community Interest Group ("CIG"), aims to inspire community involvement and enhance associate engagement through volunteering and three primary areas of partnership:

Soles4Souls - Soles4Souls creates sustainable jobs and provides relief through the distribution of shoes and clothing around the world, while giving shoes and garments a second life.

Since partnering with Soles4Souls in 2018, we are proud to have donated over 9 million pairs of shoes, including 1.7 million pairs in 2023.

In 2023, we focused our store register donation efforts in support of Soles4Souls, generating over $2.1 million in customer-funded donations, which is more than three times the monetary donations we made to Soles4Souls in 2022.

Two Ten Footwear Foundation - Two Ten provides scholarships and financial aid as well as free counseling and community resources to people working in the footwear industry.

Many of our own associates have been beneficiaries of Two Ten's programs.

We support Two Ten with corporate financial donations and subject matter expertise to continue to enrich their community program offerings.

Hometown Partnerships - From annual United Way fundraisers, American Red Cross blood drives, local nonprofit partnerships, and associate volunteering efforts, we always look for ways to support and better the communities in which we operate.

During the 2022 holiday season, with the cost of food on the rise, our associates helped address hunger and food insecurity by collecting and donating food items to their local food banks and packing meals for those in need.

Altogether, our associates collected/packed over 74,000 meals.

DIVERSITY, EQUITY, AND INCLUSION ("DE&I")

We support diversity, equity, and inclusion and believe that:

• diversity is the celebration of the ways we are alike and different, as well as unique;

• equity compels us to be fair, while also recognizing the need to treat others differently to mitigate the risk of inadvertently perpetuating systemic barriers;

• inclusion is the act of ensuring our differences are welcomed, valued, respected, and heard.

We strive to inspire self-expression, authenticity, and empowerment to drive the best possible experiences for our associates, customers, and communities in alignment with our business objectives.

Formal ways for associates, on a voluntary basis, to get involved include:

• BRGs, which are associate-led groups organized around a common diversity dimension to foster an inclusive, engaging work environment for all.

• Community Interest Groups ("CIGs"), which are associate-led groups based on a common passion or interest to drive a sense of community and shared purpose.

• Councils, which are associate-led groups organized to create a sense of inclusion and belonging for those who work in our stores, distribution centers, and fulfillment center.

All groups are inclusive and open to any associate who wants to join.

Associates can be members of as many groups as they want.

Our BRGs, CIGs, and Councils provide a unique strategic perspective based on shared experience, background, and allyship, while promoting diversity in our workplace and community in alignment with our business goals.

Hometown Partnerships - From annual United Way fundraisers to American Red Cross blood drives, local nonprofit partnerships, and associate volunteering efforts, we always look for ways to support and better the communities in which we live, serve, and work.

During the 2023 holiday season, associates globally participated in giving back to their local communities.

Our DSW and The Shoe Company stores across the U.S.

and Canada collected and donated food items to their local food banks.

Our corporate teams in the U.S., Canada, Brazil, and China gathered to give their time assembling cold-weather kits for those experiencing homelessness, packing meals for those with serious illnesses, hosting blood drives, and more.

DIVERSITY, EQUITY, AND INCLUSION

From the inside out, DE&I at Designer Brands starts with an inclusive and equitable workplace, one where all associates belong and are empowered to be their authentic selves, bringing their unique backgrounds, perspectives, and experiences to the table.

We believe that empowering our differences powers up innovation and ignites positive change.

That core belief, best expressed in our mission of "We inspire self-expression" extends to our customers, communities, and supply chain, fueling our passion to help change the industry and advance prosperity for all.

Formal ways for associates, on a voluntary basis, to be involved and ignite innovation and positive change include:

• BRGs - associate-led groups organized around a common diversity dimension to foster an inclusive and engaging work environment for all.

• CIGs - associate-led groups based on a common passion or interest to drive a sense of community and shared purpose.

• Diversity Councils - associate-led groups organized to create a sense of inclusion and belonging for those who work in our stores and logistics centers.

All groups are inclusive and open to any associate who wants to join, and associates can join as many groups as they choose.

Our BRGs, CIGs, and Diversity Councils provide a unique strategic perspective based on shared experience, background, and allyship while promoting diversity and belonging in our workplace and community in alignment with our business goals.

We proudly support eight BRGs, four CIGs, and two Diversity Councils (one in the U.S.

and one in Canada).

In 2023, we launched our first BRG/CIG/Diversity Council Day of Connection with the purpose of educating, engaging, and increasing the participation of our associates and leaders in these groups.

Our DE&I principles are also reflected in our associate training programs, which address our policies against harassment, bullying, and bias in the workplace.

We strive to maintain a diverse and inclusive workforce.

As of January 28, 2023, nearly 79% of our U.S.

based associates self-identified as female and over 55% of our U.S.

As of February 3, 2024, 78% of our U.S.

based associates self-identified as female and 56% of our U.S.

associate population self-identified as people of color.

Additionally, as of the end of 2022, 36% of the Company's Board of Directors and 46% of executives in vice president and above positions self-identified as female.

Rawlins, Designer Brands' current CEO, is a proud signatory of the CEO Action for Diversity & Inclusion Pledge, the largest CEO-driven business commitment to advance diversity and inclusion in the workplace.

This demonstrates our top-down approach to furthering our goals of cultivating open dialogue, expanding diversity training, sharing best practices with other companies, and engaging our Board of Directors in the evaluation of our progress.

For the fourth consecutive year, Designer Brands has been recognized for its LGBTQ+ inclusion efforts with a 100 score on the Human Rights Campaign's ("HRC") Corporate Equality Index, which places us on HRC's "Best Places to Work for LGBT Equality" list.

Designer Brands has also been recognized by Forbes as one of "The Best Employers for Diversity," "The World's Best Employers" and "The World's Top Female-Friendly Companies."

In 2022, Designer Brands announced an investment of $2.0 million into advancing action-oriented DE&I through a partnership with Pensole and legendary footwear designer Dr.

D'Wayne Edwards, President of Pensole Lewis College of Business & Design ("PLC").

Located in Detroit, PLC is the first and only Historically Black College & University ("HBCU") in Michigan and the first HBCU with a focus on design.

In this new partnership, Designer Brands invested in the first Black-owned footwear factory in the U.S.

– JEMS by Pensole – to produce shoes designed by PLC graduate students, to be sold exclusively at DSW.

Together with Pensole, we will provide designers with opportunities to offer new products directly to consumers.

Ultimately, the partnership is aimed at creating careers and investing in diverse, talented, aspiring designers to become the future of our industry.

We believe that paying our people fairly, regardless of gender, race, ethnicity, or any other status, enables us to deliver on our goal of creating an inclusive environment where we can all be ourselves, contribute ideas and do our best work.

To this end, we have invested in pay equity processes that allow us to assess whether associates with similar roles and experience earn equal pay for comparable work.

Based on our belief that equality and diversity makes our organization stronger, we continue to focus on and invest in pay equity processes.

We are on a journey to promote greater levels of DE&I in everything we do and recognize that there is still a long way to go.

We will continue to challenge our own biases, engage in difficult conversations in meaningful ways, foster diverse perspectives to drive innovation, and intentionally evolve our operating strategies to advance this important work.

Additionally, 36% of the Board and 58% of executives in vice president and above positions self-identified as female.

Howe, Designer Brands' CEO, is a proud signatory of the CEO Action for Diversity & Inclusion Pledge, the largest CEO-driven business commitment to advance diversity and inclusion in the workplace.

This demonstrates our top-down approach to furthering our goals of cultivating open dialogue, expanding diversity training, sharing best practices wit h other companies, and engaging our Board in the evaluation of our progress .

For the fourth consecutive year, Designer Brands has been recognized for its LGBTQ+ inclusion efforts receiving the Equality 100 Award by earning the top score of 100 in the Human Rights Campaign Foundation's 2023-2024 Corporate Equality Index.

Designer Brands has also been recognized by Forbes as one of "The Best Employers for Diversity" for 2023.

With a goal of increasing diversity in the footwear design world, in 2022, we partnered with legendary footwear designer and president of Pensole Lewis College of Business and Design, Dr.

D'Wayne Edwards.

In 2023, we celebrated the grand opening of the JEMS by PENSOLE factory located in Somersworth, New Hampshire, as one of the first black-owned footwear factories in the U.S.

The development and opening of the factory represent the culmination of our $2.0 million investment focused on advancing action-oriented DE&I.

In the fall of 2023, we launched the FIRST JEM, the inaugural shoe from JEMS by PENSOLE, in select stores and online.

Ultimately, this partnership is aimed at creating careers and investing in diverse, talented, and aspiring designers to become the future of our industry.

Each step we take brings us closer to realizing our vision of DE&I.

We are committed to continuing to walk the walk and aspiring to create conditions for everyone to put their best foot forward without barriers and to reach their highest potential.

We believe that paying our associates fairly, regardless of gender, race, ethnicity, or any other status, enables us to deliver on our goal of creating an inclusive environment where we can all be ourselves, contribute ideas, and do our best work.

To this end, we take several steps to ensure pay rates are fair, competitive, and based on job-related factors.

For example, we regularly review external market data, internal pay grades, position of pay in the pay range, as well as individual factors such as performance, training, and prior experience related to the work, to ensure fair pay.

We also invest in pay processes that allow us to assess whether associates with similar roles and experience earn equal pay for comparable work.

ASSOCIATE ENGAGEMENT

We provide all associates with the opportunity to share their opinions and feedback on their employment experience through engagement surveys performed on a regular basis across all business segments.

Our culture is a towering strength of Designer Brands, and that culture is built upon and codified by a set of unified values that guide how we aspire to operate as a collective organization.

The values are a creation of our associates, inclusive and representative of our global organization, having resulted from a process wherein associates were invited to join conversations to identify and define our organizational values and subsequently discuss how to integrate them into our culture.

As a result, they come to life internally for our associates as they are reflected in how:

"we love what we do;

we own what we do;

we do what's right;

and we belong."

We provide all associates with the opportunity to share their opinions and feedback in relation to their employment experience through engagement surveys performed on a regular basis across all business segments.

Results of the surveys are measured and analyzed with a goal of enhancing the associate experience, strengthening engagement and retention, and driving change.

In addition to Company-led surveys, leaders are encouraged to conduct "skip level" touch bases, host round table chats, and conduct follow-up activities to better understand associate feedback.

We are embracing a flexible work environment by rolling out the option for our corporate associates to work where they choose to, whether that be in the office, at home or elsewhere, to best meet their individual needs.

Upon exiting the Company, associates who voluntarily leave the business are provided an exit survey to help us measure satisfaction and engagement and identify the factors that may have contributed to pursuing another opportunity.

In addition to Company-led surveys, leaders are encouraged to conduct "skip level" touch bases, host roundtable chats, and conduct follow-up activities to better understand associate feedback.

Upon exiting the Company, associates who voluntarily leave the business are provided with an exit survey to help us measure satisfaction and engagement, in addition to identifying the factors that may have contributed to pursuing another opportunity.

We continue to develop opportunities for associate connection and engagement in the evolving workplace environment by listening to our associates and taking actions on what is most important and impactful to them.

One of the things our associates tell us is important to them is recognition.

Our "Inspire Greatness" recognition program provides various means to recognize and reward associate accomplishments and work anniversaries.

GOVERNMENT REGULATIONS

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For example, substantially all of our import operations are subject to complex trade and customs laws, regulations, and tax requirements, such as sanctions orders or tariffs set by governments through mutual agreements or unilateral actions.

In addition, the countries where our products are manufactured or imported from may from time to time impose additional duties, tariffs, or other restrictions on our imports or adversely modify existing restrictions.

In addition, the countries where our products are manufactured or imported from may, from time to time, impose additional duties,

tariffs, or other restrictions on our imports or adversely modify existing restrictions.

Changes in tax policy or trade regulations, the disallowance of tax deductions on imported merchandise, or the imposition of new tariffs on imported products, could have an adverse effect on our business, results of operations, and competitive position.

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INTELLECTUAL PROPERTY

We have registered a number of trademarks, service marks, and domain names in the U.S., Canada, and internationally, including DSW ® , DSW Shoe Warehouse ® , and DSW Designer Shoe Warehouse ® .

We also have a 40% interest in ABG-Camuto, which holds the intellectual property rights of Vince Camuto ® and others.

ABG-Camuto licenses to us the rights to certain of its trademarks in specific categories, such as footwear and handbags, which, as of January 28, 2023, have six years remaining on the initial license term and are indefinitely renewable on five-year terms.

We believe our trademarks and service marks have significant value and are important to building our name recognition.

We own numerous trademarks, service marks, and domains in the U.S., Canada, and internationally, such as Crown Vintage ® , DSW ® , DSW Shoe Warehouse ® , DSW Designer Shoe Warehouse ® , Keds ® , Kelly & Katie ® , Mix No.6 ® , Pro-Keds ® , and Topo Athletic ® .

We also have a 40% ownership interest in ABG-Camuto, which owns the Vince Camuto ® trademark, and a 33.3% ownership interest in Le Tigre, which owns the Le Tigre ® trademark.

As of February 3, 2024, we have approximately 900 trademark registrations and pending applications in the U.S., Canada, and internationally.

We consider our trademarks, service marks, and domains to have significant value and to be important to building our name recognition.

Our business consists of two principal selling seasons:

the spring season, which includes the first and second fiscal quarters, and the fall season, which includes the third and fourth fiscal quarters.

Historically, net sales have been slightly higher in the fall season than in the spring season;

however, during 2022, net sales in the fall season were slightly lower than the spring season due to the decline in overall global economic conditions and unseasonably warm weather.

Our seasonal results of operations may fluctuate based on global economic conditions, changes in weather conditions, and our customers' interest in new seasonal styles.

Typically, net sales are slightly higher in the fall season than in the spring season.

However, this may not hold true when net sales are influenced by global economic conditions, changes in weather conditions, the timing of acquisitions, and our customers' interest in new seasonal styles.

AVAILABLE IN FORMATION

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business