37 TH Annual William Blair Growth Stock Conference June 6, 2019 104 1
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 Any statements in this presentation that are not historical facts, including the statements regarding our fiscal 2021 goals and fiscal 2019 outlook, are forward-looking statements and are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by the use of forward-looking words such as "outlook," "believes," "expects," "potential," "continues," "may," "will," "should," "would," "seeks," "approximately," "predicts," "intends," "plans," "estimates," "anticipates," or the negative version of those words or other comparable words. These statements are based on the Company's current views and expectations and involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These factors include, but are not limited to: our success in growing our store base and digital demand; risks related to our acquisitions of Camuto Group and TSL, including the possibility that the anticipated benefits of the acquisitions are not realized when expected or at all; our ability to protect our reputation and to maintain the brands we license; maintaining strong relationships with our vendors, manufacturers and wholesale customers; our ability to anticipate and respond to fashion trends, consumer preferences and changing customer expectations; risks related to the loss or disruption of our distribution and/or fulfillment operations; continuation of agreements with and our reliance on the financial condition of Stein Mart; our ability to execute our strategies; fluctuation of our comparable sales and quarterly financial performance; risks related to the loss or disruption of our information systems and data; our ability to prevent or mitigate breaches of our information security and the compromise of sensitive and confidential data; failure to retain our key executives or attract qualified new personnel; our reliance on our loyalty program and marketing to drive traffic, sales and customer loyalty; risks related to leases of our properties; our competitiveness with respect to style, price, brand availability and customer service; our reliance on foreign sources for merchandise and risks inherent to international trade, including escalating trade tensions between the U.S. and other countries, as well as U.S. laws affecting the importation of goods, such as recent tariffs imposed on Chinese goods imported to the U.S.; uncertainty related to future legislation, regulatory reform, policy changes, or interpretive guidance on existing legislation, including the impact of the Tax Cuts and Jobs Act; uncertain general economic conditions; risks related to holdings of cash and investments and access to liquidity; and fluctuations in foreign currency exchange rates. Risks and other factors that could cause our actual results to differ materially from our forward-looking statements are described in the Company's latest Annual Report on Form 10-K or other reports filed with the Securities and Exchange Commission. All forward-looking statements speak only as of the time when made. The Company undertakes no obligation to update or revise the forward-looking statements included in this presentation to reflect any future events or circumstances. 2 2
WHO IS DBI? 3
UNIQUE BUSINESS MODEL WORLD-CLASS RETAILER POWERFUL WORLD-CLASS DESIGN AND LAST-MILE SOLUTION SOURCING CAPABILITIES UNLOCKING SUBSTANTIAL SHAREHOLDER VALUE BY LEVERAGING OUR STRENGTHS 4
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DESTINATION FOR BRAND NAME & DESINGER FOOTWEAR 27 CONSECUTIVE YEARS OF SALES GROWTH 500+ WAREHOUSES WITHIN 20 MINUTES OF 70% OF POPULATION AWARD WINNING LOYALTY WITH 27M MEMBERS LEADER IN DIGTAL AND OMNI-CHANNEL EXPERIENCE 6 6
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ACQUIRED IN Q2 2018 #1 WOMEN’S FOOTWEAR RETAILER IN CANADA DOMINATE KIDS CATEGORY 112 SMALL DOOR LOCATIONS IN CANADA IMMATURE DIGITAL & LOYALTY EXPERIENCES 8
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DESIGN, SOURCE & WHOLESALE LEADER IN PRIVATE BRAND FOOTWEAR, DESIGN & SOURCING IMMATURE DTC CAPABILITY 10
HOW WE WIN WORLD-CLASS RETAILER POWERFUL WORLD-CLASS DESIGN AND LAST-MILE SOLUTION SOURCING CAPABILITIES UNLOCKING SUBSTANTIAL SHAREHOLDER VALUE BY LEVERAGING OUR STRENGTHS 11
HOW HOW WE WIN WE WIN 13% OPERATING • Grow Camuto produced brands, kids INCOME CAGR and seasonal OVER NEXT • Deliver differentiated experiences 3 YEARS through loyalty, innovation • Drive conversion 12
GROW CAM GROW CAMUTO UTO PRODUCED PRODUCED BRA BRANDS NDS CAMUTO Leverage Camuto Group expertise to drive PRODUCED increased penetration BRANDS CAMUTO PRODUCED BRAND GROWTH $ 725M 725M SALES TO REACH ~$725M IN 2021 0 2021 2021 2018 2018 13 13
EXPAND KIDS EXPAND KIDS Fastest growing retailer in category with significant runway KIDS FOOTWEAR | $ IN MILLIONS KIDS 150 SALES TO 115 REACH ~$300M 66 IN 2021 30 2016 2017 2018 2019 (est.) 14
LEVERA LEVERAGING GING SEASONAL SEASONAL PRODUCT PRODUCT Focus on seasonal as “best at” category Placing more receipts into sandals and boots Integrating with key items strategies 15
AWARD-WINNIN AWAR WINNING G LOYALTY PR LOYALTY PROGRAM OGRAM Growing members, retaining at higher rate, increasing average spend 27M Re-launched DSW VIP loyalty • Loyalty Members – program in 2018 Represent 90% of Customer Base Simplified while increasing non- • transactional ways to earn and use points #1 Offered opportunity to give back • Innovative Customer to communities via Soles4Souls Loyalty Program (Shopify & Loyalty360) 16
DRIV DRIVE INNOVATION E INNOVATION Delivering differentiated experiences to enhance engagement and conversion Creating connections with consumers as a destination W Nail Bar Orthotics Shoe Repair Continue rolling out services to engage customers and increase traffic Shoe Concierge Subscription Models New store designs replicating Innovation Lab 17
OPTIMIZE OPTIMIZE INVENTORY INVENTORY MA MANAGEM NAGEMENT ENT Increase focus on key items Improved in-stock delivers conversion Fulfillment optimization drives savings and improves in-stocks 18
HOW WE WIN WORLD-CLASS RETAILER POWERFUL WORLD-CLASS DESIGN AND LAST-MILE SOLUTION SOURCING CAPABILITIES UNLOCKING SUBSTANTIAL SHAREHOLDER VALUE BY LEVERAGING OUR STRENGTHS 19
HOW HOW WE WIN WE WIN 19% OPERATING INCOME CAGR • Differentiated experiences OVER THE • Leverage scale NEXT 3 • Drive growth through increased digital YEARS penetration and new stores 20
LAUNCH LAUNCH BANNER BANNER SPECIFIC SPECIFIC LOYALTY LOYALTY PROGR PROGRAM AMS PHASE 1 PHASE 2 Launch DSW VIP i n Create and launch Canada in Q2 2019 banner specific loyalty program by end of year 21
LEVERA LEVERAGING GING SCALE SCALE Optimizing cross-banner inventory Increasing buying power with vendors Leveraging shared services 22
INCREASE DIGITAL INCREASE DIGITAL PENETRATION PENETRATION ATG Platform driving e-commerce growth DESKTOP MOBILE CANADIAN DIGITAL DEMAND 2021 CONVERSION CONVERSION +38% 6 6 CAGR DIGITAL 5 5 DEMAND 4 4 >2x 2018 3 3 2 2 1 1 0 0 2016 2017 2018 2019F 2020F 2021F Canadian DSW Canadian DSW Sites Sites 23
EXPAND EXPAND IN IN CANA CANADA DA # # British Columbia Alberta 28 22 Manitoba 22 Newfoundland 4 2 8 3 50+ NEW 6 1 1 1 1 Ontario LOCATIONS Saskatchewan Quebec 42 Prince Edward Island 1 14 IN CANADA 3 2 Nova Scotia 1 New Brunswick 24
HOW WE WIN WORLD-CLASS RETAILER POWERFUL WORLD-CLASS DESIGN AND LAST-MILE SOLUTION SOURCING CAPABILITIES UNLOCKING SUBSTANTIAL SHAREHOLDER VALUE BY LEVERAGING OUR STRENGTHS 25
HOW HOW WE WIN WE WIN GROW OPERATING INCOME BY • Grow DSW Private Brand $26M IN THE • Grow DTC NEXT 3 • Increase speed to market YEARS 26
LEADER LEADER IN IN PRIVA PRIVATE BR TE BRAND AND $ 1 Billion 12 Million TOTAL RETAIL SALES TOTAL PAIRS PRODUCED 27
WE WILL GROW PRIVATE BRANDS TOTAL PAIRS PRODUCED BY CAMUTO GROUP 33M ~32M 40+M ~28M ~23M 33M 28M 23M PEAK 2019 2020 2021 DSW PRIVATE BRAND 28
DIRECT TO CONSUMER OPPORTUNITY Increase VinceCamuto.com digital penetration DESKTOP MOBILE CONVERSION CONVERSION Enhanced loyalty 6 6 program 10 10-15% 15% 5 5 Increased assortment 4 4 Total Brand Penetration 3 3 Leverage DSW #1 omni-channel 2 2 1 1 Increased drop ship 0 0 Camuto DSW Camuto DSW 29
TEST TEST AT AT Prototyped Product In Brazil Sketch 2-3 weeks DSW DSW Sold at DSW + Nordstrom, Macys, Mass Test at And Dillards Production DSW 30
RESULTS
2021 FINANCIAL GOALS • Consistent positive comps in retail segment • Meaningful accretion in gross profit • Achieve $2.65 to $2.75 Adjusted EPS • 17% CAGR Cash Flow 32
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